The National Energy Regulator of South Africa (Nersa) is investigating the near doubling of the costs of Transnet’s new multiproduct fuel pipeline from Durban to Gauteng, in a move that could herald closer scrutiny of big cost overruns on state infrastructure projects.
Nersa has assigned an independent expert, Cresco Project Finance, to conduct a "prudency review" of the project’s first phase.
The outcome of the probe could also have implications for petroleum pipeline tariff hike requests in the future.
The new 555-km long pipeline replaces the 48-year-old version, and has a 70-year design life.
It can transport 93-grade and 95-grade unleaded petrol, low-sulphur diesel and ultra-low-sulphur diesel, as well as jet fuel.
Transnet originally budgeted ZAR12.7 billion for the project, but this soon rose to ZAR15.4 billion, and it quickly became clear that even that was conservative.
The final price tag of ZAR23.4 billion includes the cost of pump stations in Durban and Heidelberg, both of which were still under construction during August 2013. - Pmb Chamber of Business.
Nersa has assigned an independent expert, Cresco Project Finance, to conduct a "prudency review" of the project’s first phase.
The outcome of the probe could also have implications for petroleum pipeline tariff hike requests in the future.
The new 555-km long pipeline replaces the 48-year-old version, and has a 70-year design life.
It can transport 93-grade and 95-grade unleaded petrol, low-sulphur diesel and ultra-low-sulphur diesel, as well as jet fuel.
Transnet originally budgeted ZAR12.7 billion for the project, but this soon rose to ZAR15.4 billion, and it quickly became clear that even that was conservative.
The final price tag of ZAR23.4 billion includes the cost of pump stations in Durban and Heidelberg, both of which were still under construction during August 2013. - Pmb Chamber of Business.
