DEPARTMENT: PUBLIC ENTERPRISES
REPUBLIC OF SOUTH AFRICA
NATIONAL ASSEMBLY
QUESTION FOR WRITTEN REPLY
QUESTION NO.: 1372
DATE OF PUBLICATION: 12 SEPTEMBER 2014
1372. Mr R A Lees (DA) to ask the Minister of Public Enterprises:
(1) Whether, with reference to Transnet's New Multi-Product Pipeline (NMPP) from Durban to Gauteng, the planned storage tanks in Durban have been constructed; if not, (a) why not and (b) what (i) are the relevant details of why some or all of these tanks are not being used, (ii) remedial action is required to make the tanks usable and (iii) will the cost of remedial action be; if so, are they being used to full capacity;
(2) What are the relevant details of the contractor and/or contractors who have been appointed to (a) construct these tanks or (b) carry out remedial action;
(3) What are the costs associated with the construction of these tanks as (a) contracted, (b) constructed to date and (c) an estimated final cost? NW1736E
Reply:
(1) The accumulator tanks at TM1 are still under construction and will be completed as per the original scope of the project.
(a) The first accumulator tank (A02) failed under hydro-testing in December 2012. The remainder of the accumulator and two intermix diversion tanks are currently undergoing Quality Control in preparation for completion, a process which will include hydro-testing.
(i) The probable cause determined by Fluor/Igoda Consultants is a combination of differential settlement of the foundation as well as stresses induced in the tank shell during construction. Following the failure of A02, the Contractor has declared a dispute on Tank A11 stating that he is unable to complete the construction of the tank due to foundation movement. Transnet disagrees with this view. This dispute process is underway and is at present under adjudication. It is expected that a ruling will be made by December 2014.
(ii) Transnet has appointed a Geotechnical Consultant Team as part of the remedial actions being undertaken, to conduct a further review of the tank foundations and to recommend any strengthening measures that may be required to ensure long-term stability of the tanks. Transnet and the contractor are also looking at additional constructability measures to implement in order to facilitate the completion of the tanks.
(iii) The cost of remedial action or rebuilding of Tank A02 should be covered by the NMPP project insurance. Any additional costs regarding foundation strengthening measures will be determined based on the Geotechnical review done.
(2) (a) The Contractor is a Joint Venture between Trotech and Group Five. They will undertake both the completion of the tanks as well as any remedial actions required.
(b) Joint Venture between Trotech and Group Five as stated in (2)(a) above.
(3) (a) The cost associated with the construction of these tanks as contracted and taking into account all compensation events to date is R 601 million.
(b) The expenditure to date associated with the construction of these tanks is R462 million.
(c) The present full scope contract value will be influenced by the dispute resolution process as well as any costs related to remedial actions taken.
Issued by Parliament, October 20 2014
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