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Insufficient customer commitment stalls liquid bulk terminal project

Insufficient customer commitment stalls liquid bulk terminal project


The development of the liquid bulk terminal in the Port of Ngqura, in the Eastern Cape, has been halted, says Oiltanking Grindrod Calulo (OTGC).

OTGC is a joint venture (JV) between operating partner Oiltanking, a German multinational that is one of the largest independent operators of tank terminals for oils, gases and chemicals worldwide, and local partners Grindrod, a JSE-listed freight and financial services company, Calulo Investments, a diversified empowered investor in the petrochemicals industry, and the Adopt-a-School Foundation, a nonprofit organisation which supports education in disadvantaged schools.

Transnet National Ports Authority (TNPA) in 2011 awarded OTGC preferred bidder status to develop a liquid bulk storage terminal in the Port of Ngqura, with the aim of servicing fuel importers in the Nelson Mandela Bay region. The facility was intended to replace the existing terminal in Port Elizabeth.

The terminal was also to serve as a strategic alternative to the Port of Durban, in KwaZulu-Natal, and, to some extent, Cape Town, in the Western Cape, while also relieving pressure on these ports.

Since the date of award, OTGC has been engaged in a variety of activities related to the project, including negotiating a build, own, operate and transfer agreement, executing the engineering design of the terminal, obtaining commercial commitments from customers, negotiating funding with lenders, and obtaining the required regulatory permits for the construction of the project.

Construction of the terminal started in 2019, with the earthworks already complete.

However, warns OTGC, the JV has not been able to secure sufficient customer commitment for the project.

“OTGC is, therefore, in a regrettable position that it is unable to execute on the project and is liaising with TNPA on the way forward.”

OTGC was not immediately available for comment.

 



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