Channel still open to UAL hub – Transnet

The Transnet National Ports Authority (TNPA) is continuing to woo big investors to Saldanha’s industrial development zone, including Universal Africa Lines (UAL), which said last month it was withdrawing from a multimillion-rand tender at a quay in the harbour. Yesterday TNPA chief executive Tau Morwe held an extraordinary briefing session at the authority’s headquarters in Saldanha, where he emphasised that the state-owned company was still ready to do business with UAL. “Transnet is not prevaricating… (We) are still prepared to go along with it.” While UAL shipping manager Annalize Krause said the company declined to comment “at this stage”, it is understood that the group may reconsider its withdrawal if certain conditions are met. UAL is a Dutch-based shipping group that is involved in servicing oil rigs.

Morwe told the briefing that difficulties with the tender – which the Transnet board had signed off last September, granting UAL preferred bidder status – arose when UAL changed certain conditions. It no longer wanted a 15-year lease on two large sections of land at the harbour. It had also quibbled about the “common use” berthing quay, which in terms of the law must be available to other business parties and not only to one firm. It was also necessary to feed that quay with an access road for other users. It emerged that UAL wanted exclusive use of the quay and it also did not want an access road for other users to feed the quay through its leased land. The shipping group also wanted to reduce the size of the land strips and required that a building owned by the TNPA be removed.

Morwe said his Transnet division could not change the specifications of the tender, including a 15-year lease, or reduce the size of the land put out to tender. However, his office was open to discussing elements of the deal, which included removal of the building. UAL had planned to build a supply hub for the oil industry. The hub in the habour area would have been devoted to loading, offloading and repair of equipment and ships used in the oil industry. Pressed on whether TNPA was pursuing UAL vigorously to win back the business, Morwe said he had attempted to have a one-on-one meeting with UAL this week but “we did not get any response”.

UAL’s chief executive, Roger Jungblut, told Business Report recently that while his company was interested in investing in South Africa, he had subsequently run into a barrage of red tape at Transnet. Western Cape Finance MEC Alan Winde also bemoaned the red tape associated with doing business at one of Transnet’s units. He noted that the business of servicing oil rigs was potentially huge. About 100 oil rigs passed South Africa each year. Only three were serviced in the country last year – one at Saldanha – which brought R100 million into the area. Warwick Blythe, the executive director at the SA Oil and Gas Alliance, had written to Morwe expressing concern that Transnet appeared to have let the deal slip.

“As the primary organisation dedicated to promoting the development of the upstream oil and gas services sector in South Africa, we are very distressed at the failure of the TNPA to conclude an agreement with UAL… that would allow them to establish a facility that we believe would have acted as a catalyst for the development of a significant regional oil and gas supply complex in Saldanha Bay.” Transnet insiders indicated that they remained committed to luring international business in the oil and liquefied petroleum gas sectors. Plans were afoot to expand the servicing hubs in both these lines of business.