TNPA,UAL try to cut a deal
IOL Business - Feb 13th 2012, 08:15
The Transnet National Ports Authority (TNPA) scrambled this week to repair its damaged relationship with a Dutch-based shipping company – Universal Africa Lines (UAL) – which was poised to invest hundreds of millions of rand into transforming a section of the Saldanha Bay harbour and emerging industrial development zone (IDZ) into an oil and gas servicing hub.
Renewed discussions between UAL and the TNPA in the last few days followed a campaign by the SA Oil & Gas Alliance and the Cape Chamber of Commerce and Industry. These groups expressed concern that the hub investment would be lost.
Something went wrong in the relationship which was forged about two years ago after Western Cape Finance MEC Alan Winde urged UAL to invest in Saldanha on the province’s west coast.
By September last year the TNPA declared UAL the preferred bidder for two sections of land on either side of a berthing quay under a 15-year lease. It is understood that difficulties in the relationship arose when UAL demanded that a TNPA building – on one of the parcels of land – be removed at TNPA’s cost. UAL also complained about the costs of repairing a harbour wall.
It is not clear what went wrong but Roger Jungblut, the chief executive of UAL, told Business Report that the negotiations with the Transnet subsidiary had been characterised by red tape.
In January his company wrote a letter to the TNPA chief executive, Tau Morwe, indicating that it would withdraw from the project.
Winde also complained about the sluggish approach of the TNPA in dealing with potentially massive investments by multinational companies.
DA MP Pieter van Dalen, who has served on Parliament’s public enterprises committee, had released the correspondence between UAL and Morwe’s office.
Last week, Van Dalen said the media spotlight on the withdrawal of UAL appeared to have sprung the TNPA into “unaccustomed action”.
On Monday, the TNPA approached UAL to see if the two parties would return to the negotiating table. On Tuesday, the media were called to a briefing at the Bayville headquarters of the TNPA at the Saldanha harbour.
“We will keep the spotlight on Transnet to ensure that a deal is struck,” Van Dalen said.
“I was upset when it appeared that Transnet had dropped the ball in a potentially multibillion-rand potential business for the Western Cape.”
Meanwhile, Morwe said that although UAL had wanted to change the terms of the tender – reducing the lease time from 15 to two years – and also cutting the area of land, he emphasised that the door was still open for business with UAL.
UAL shipping head in South Africa Annalize Krause reported that UAL had “a positive meeting” with TNPA representatives on Wednesday.
“We will be able to give more information once these are finalised,” she said, but on a positive note indicated that UAL would return to its original plan to development and oil and gas supply base in Saldanha Bay.
The campaign to draw international investment to Saldanha coincides with a Western Cape government-led bid to raise the status of the harbour area to an IDZ.
The provincial cabinet gave its backing to an IDZ steering committee to apply to a national Department of Trade and Industry body – the national manufacturing board – for an official IDZ designation and an operator permit.
Wesgro chief executive Nils Flaatten said the IDZ would be a ring-fenced area where investors could benefit from various tax incentives and would also be exempt from value-added tax for the first three to four years of operation.
Feasibility plans indicated that investments in the IDZ could generate more than R11 billion a year.
There was the possibility of housing zinc and titanium smelters in the area, Flaatten added.
If the committee application was approved by the board, it would be forwarded to the national cabinet.
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