Johannesburg - Transnet is to commission the first of its multibillion rand fuel pipelines and is ready to operate some of its inland pipelines in the greater Gauteng area.
The state-owned company said phase two and three of its inland pipelines would be ready for operation by mid-January, while the expected completion time for the 555 km New Multi-Product Pipeline (NMPP) line from Durban to Johannesburg is still set for the end of 2013.
Cabinet gave the go ahead to construct the pipeline which will replace the 45-year-old existing Durban-Johannesburg pipeline. Experts said it was running at full capacity and nearing the end of its design life.
Expected to cost R23 billion to build, the new pipeline will carry petrol and diesel between the two cities and is expected to have sufficient capacity to last until 2035. The initial cost for the project was estimated at just over R11 billion when it was first brought in front of government in 2008.
But Transnet Acting Chief Executive Chris Wells on Wednesday defended the increase in projected cost, saying new costs were necessitated by changes in design and realistic timeframes, escalation in steel prices and transport costs, among others.
"It should be noted that only 38 percent of the projected cost has been spent to date ... given realistic timeframes and the necessary design changes, a project of this complexity and magnitude, is fair value," Wells said.
He said the impact of the additional costs for the project will not have material impact on the pump price, so eventually consumers will not end up footing the bill.
"The NMPP is a strategic investment for South Africa to supply fuel products to the market over a long period of time and for now, all we want to do is to stick to our promise of delivering the project by 2013."
Once completed, the NMPP would ensure the security of petroleum products to the inland, Gauteng in particular.
Neville Eve, head of the project, said the portion of tankers carrying petroleum products to the inland market would be drastically reduced as soon as the NMPP started its operations. This will also have long term climate benefits and would improve South Africa's carbon footprint by reducing carbon emissions from the road transportation of petroleum products.
"We will have fewer tankers transporting fuel on our roads and we plan to also make use of rail to assist the pipeline, so it will be good news for the environment," Eve said.
The NMPP is the single biggest project to be undertaken by Transnet and is among the largest multi product pipelines in the world. It has created more than 2 000 direct jobs since 2008.
