City calls upon National Government to intervene in on-going bitumen shortage

Councillor Brett Herron, Mayoral Committee member for Transport, Roads and Stormwater has written to the Ministers of Energy and Transport calling upon them to intervene to secure a reliable and predictable supply of bitumen. The supply of bitumen, an essential component in the production of asphalt required for the maintenance and construction of roads in the City, has been erratic and unreliable since last year. This is impacting negatively on Council's ability to keep up with construction and maintenance programs and may continue to do so over the coming months. This could potentially result in under spend on operating and capital budgets.

Bitumen is a by-product from oil refineries and, due to factors such as breakdowns, production changes at refineries, and changes in the Middle-East supply situation, has been difficult to source for the City's road maintenance projects. The local refinery, for example, no longer produces the grade of bitumen required for the production of asphalt specified for Council's road surfacing.

We have been advised by one of our asphalt suppliers that the erratic bitumen supply situation will probably continue for the foreseeable future. This could impact negatively on road construction not only in Cape Town, but on a national scale as well.

Councillor Brett Herron, Mayoral Committee member for Transport, Roads and Stormwater says, "Everything possible is being done to ensure that the impact of the present bitumen supply situation is minimised but delays on certain projects could still occur."

Councillor Herron has called on the national Ministers of Transport and Energy to take urgent steps to ensure that South Africa's future supply of bitumen is protected as it is a resource that is essential in preserving South Africa's economic growth trajectory. "It is absurd that oil producers are continuing to export bitumen while South Africa is having to import it in order to meet national demands. Not only this, but oil companies are not co-ordinating their maintenance schedules in such a way that there is always a reliable supply."

PLEASE SEE BELOW A COPY OF THE LETTER FROM CLLR HERRON TO MINISTER J S NDEBELE MINISTRY OF TRANSPORT BELOW:

20 April 2012

 Minister J S Ndebele
Ministry of Transport
Private Bag X193
PRETORIA 0001
Fax: 012 328 3194

E-mail address: PA Ms Sibongile Mdletshe

Dear Minister Ndebele,

Over the past year the City of Cape Town, together with the rest of the country, has endured an unpredictable supply of bitumen and at times a bitumen shortage. The lack of security of supply of bitumen undermines the planning and implementation of our infrastructure projects as well as the repairs and maintenance of our vital road network.

We welcomed the Minister of Finance's commitment to infrastructure led economic growth and development and in particular to the investment of approximately R70 billion in road infrastructure across the country. 

As you are aware the City of Cape Town is also investing substantially in infrastructure. Over the coming MTREF budget period we are committing to significant improvements in our road infrastructure and a major expansion of our integrated rapid transit (IRT) service with concomitant investment in the required infrastructure. 

Our current and future infrastructure projects require a reliable bitumen supply and the lack of security of supply places our projects in jeopardy of being implemented and/or completed. This will in turn undermine our commitment to providing the infrastructure necessary for economic growth, social inclusion and universal urban mobility. 

Clearly, the various national and provincial road improvement projects the national budget has committed to are also at risk.

It is our view that our national government needs to take urgent steps to ensure a predictable and reliable supply of bitumen in order to effect our service delivery promises. I am, therefore, writing to call upon you to take the necessary steps to secure the bitumen supply required to implement the vast and important infrastructure projects we have all committed to.

These steps could include one or more of the following:

1. Declaring bitumen a strategic mineral resource which would require our refineries to maintain sufficient bitumen supply and reserves;

2. Ensuring that planned refinery maintenance is co-ordinated and staggered so that some bitumen supply continues whilst maintenance takes place; and

3. Prioritising local supply of bitumen over export.

I would welcome the opportunity to meet with you to discuss this crisis at your earliest convenience and look forward to hearing back from you urgently.

Yours faithfully,

BRETT HERRON

COUNCILLOR/RAADSLID/CEBA

MAYORAL COMMITTEE MEMBER: TRANSPORT, ROADS & STORMWATER

BURGEMEESTERSKOMITEELID: VERVOER, PAAIE & STORMWATER

ILUNGU LEKOMITI YESIGQEBA SIKASODOLOPHU: EZOTHUTHO, IINDLELA NAMANZI ESITSHI

Statement issued by Councillor Brett Herron, Mayoral Committee Member for Transport, Roads and Stormwater, City of Cape Town, April 23 2012

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