Recent Aviation Fuel Shortages; 2010 Readiness: Energy Department & Airports Company SA

Energy

13 October 2009
Chairperson: Ms E Thabethe & Ms N Bhengu (ANC)
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Meeting Summary

The Department of Energy updated the Committees on the reasons that had led to the shortages of jet fuel at OR Tambo International Airport (ORTIA), and explained what the DOE had done, and the progress made to date. Reasons were given why stock levels fell, the subsequent establishment of a task team, their mandate and scope as well as the role players and their duties. The DOE reported on the forums they were participating with to gain an understanding of the constraints of jet fuel supply and demand to ORTIA from the coastal pipeline and inland refinery. They looked at the fuel volumes supplied and modes of transportation, quantities of petrol and diesel supplied to ORTIA as well as the impact of World Cup 2010 on supply. Also discussed were constraints from the inland refinery, storage capacity at ORTIA, Transnet deliveries and increasing blocked trains and rail tank cars to meet fuel demands, the introduction of shift work as well as a seven-day week, and possible fuel contamination.

Recommendations included additional and temporary storage tanks at ORTIA during the World Cup, rail tank cars as storage facilities, using the coastal pipeline to meet additional demands and for emergency purposes. A clear communication plan as well as coordination was essential. Clear lines of communication and protocol needed to be put in place and a risk and contingency plan required urgent attention. Rail and pipeline needed to make sure that there was close coordination as well as coordination with the suppliers to meet the regular demand for fuel and to supply additional capacity. Planning should include all primary airports and include petrol and diesel not just jet fuel. Centralised and consolidated information needed to be available to all role players, forecasts had to be done, daily monitoring was imperative and deviations from plans had to be clearly monitored and communicated.

Airports Company South Africa discussed jet fuel supply and consumption; storage capacity and the construction of new tanks, the challenge of the guaranteed supply of jet fuel on a continuous basis at its primary airports and measures that needed to be put in place to ensure adequate stock, and refuelling options. They spoke about extended operating hours at the Port Elizabeth airport to meet the influx of visitors, private designated airports for the World Cup, logistics planning and execution, cooperation and the sharing of information amongst all role players in the aviation industry.

Members asked when the task team had held their first meeting, how much work they had completed to date and from whom information related to the presentations could be obtained. They enquired if the task team had finalised investigations because a report outlining the findings and recommendations was needed to ensure that the recommendations were clear and how parliament was informed of the work of the task team They wanted an understanding of fuel storage and a comprehensive picture of the supply problems at all the airports and what the jet fuel recovery period was at ORTIA as well as the reasons for the delay. How the tankers would access the airport and what the impact would be on the runways and whether there was undertaking and clear memorandum from Transnet to provide additional rail tank cars. Whether the refinery could meet the extra demands, adequate fuel storage at the coastal refineries, was there enough space for the tankers and where they would park without interference. Was the storage planned sufficient, and how soon would it be in operation since SA imported fuel and if road trucks had been considered as an alternative form of transportation to pipeline and rail. Was there any legislative proposals that needed to be processed and were the Unions brought on board, additional shifts, longer hours, and strikes and the handling thereof. They asked if stakeholders included the SADC countries and if they had received communication about fuel shortages and other services.

Meeting report

Chairperson Bhengu explained that a previous presentation by ACSA informed the Portfolio Committee on Transport that there was a jet fuel shortage in South Africa, and ACSA had appealed to the Committee to intervene, as there was an indication of deeper problems. The Committee then wrote a letter to the Portfolio Committee on Energy requesting a joint sitting because the problems of energy supply did not only reside with ACSA - there were a number of entities involved in the supply chain. The purpose of the meeting was to assess the fuel situation in South Africa and to begin looking at the root causes of the problem, the current situation and challenges. The Chairperson thanked the Portfolio Committee on Energy for their prompt response.

Department of Energy (DOE) on Jet Fuel Supply at OR Tambo Airport in preparation for 2010 
Ms Tshilidzi Ramuetzisi, Chief Director: Energy Planning, DOE, explained that the briefing would update the Committees on the reasons that had led to the shortages of jet fuel at OR Tambo International Airport (ORTIA), what the DOE had since done, and the progress made to date.

Early in August there were below benchmark stock levels reported at ORTIA. The stocks levels had fallen to the level of 2.1 days, whereas the international stockholding norm was 5.5 days. Between July and 10 August 2009 stock levels were sitting below 15 million litres, which was way below the norm. By 11 August there was a huge jump in supply from the coastal Durban to Johannesburg pipeline, and jet fuel stock stabilised. The reasons for the low stock levels were disruptions to the rail supply from the coastal refineries to the airport as well as problems at the inland refinery supplying ORTIA. Supply recovery resulted in normal levels, but the recovery of normal levels was very slow.

In response the Minister of Energy held a meeting with the various role players and a task team was established to investigate the reasons for the shortage at the airport, and to put in place plans to prevent disruptions during the period of the World Cup.
The task team met weekly on Mondays and was convened and coordinated by the DOE and reported to the Minister on a monthly basis. The core role players in the task team included Transnet Pipeline, Transnet Freight Rail, Transnet Ports Authority, the Airports Company of South Africa (ACSA) and peer member companies. The mandate of the task team was to investigate what had occurred at the airport during August, to put appropriate measures in place to avoid a similar occurrence in the future, and particularly during World Cup 2010. The task team’s plans had to include expanding supply, and developing and consolidating not just jet fuel, but all fuel, and assessing the availability and supply of petrol and diesel during that period.

Subsequently other stakeholders were invited to the task team and included the non-ACSA airports, the Board of Airline Representatives of SA who represented the airlines in securing fuel at the airport, the Airlines Association of SA that dealt with domestic flights and the Board of Airlines Representatives of SA who represented the international flights. Also, the Petroleum Retailers Alignment Forum, which dealt with DOE retailers for petrol and diesel. Continual engagement would take place with other stakeholders interested in fuel supply during the period. The Department of Transport (DOT) was in the process of developing various plans, which indicated what the projected passenger movements were going to be for all modes of transport during the period of the World Cup. The DOE had to engage with the DOT to understand the impact of passenger movements and the demand and projections for various liquid fuels. The Department of Trade and Industry (DTI) and the Competition Commission were also on board.

The key role players were the DOE, ACSA and Transnet. The DOE played a high level role and a non-operational role, and did the centralised coordination. ACSA assisted the DOE with the projections for demand during the World Cup, and it included the demand for fuel. The information provided by ACSA could be used for the maintenance and monitoring of actual versus tankdemand,as well as stock levels. ACSA monitored the day-to-day operations at their various airports and consolidated individual plans and volumes that were coming from their different suppliers They were responsible for notifying the relevant role players when actual volumes deviated from tank volumes as there was a need for the effective and efficient management of stock levels and deliveries. Transnet was responsible for coordinating and ensuring that rail delivered on what was planned. Coordination of the supply chain by Transnet Ports Authority was critical since there was limited refining capacity. Therefore most of the supply would be through inputs during the World Cup, Transnet Pipeline had to ensure that the pipeline fulfilled and delivered its commitments. The suppliers needed to ensure that their individual plans were received by ACSA within the agreed timeframes as well as the volume of supplies, so that the operators were able to understand the consolidated picture.

The scope of the task team included all motor fuel, jet fuel, petrol and diesel
for all host cities, and excluded liquid fuel products such as liquefied petrol and gas, and illuminating paraffin. The planning of the task team would not include Botswana, Lesotho, Namibia and Swaziland but the DOE was conscious of their supply needs during the World Cup and all agreements would be honoured so that there was no negative impact on those countries during the World Cup.

The objectives of the task team were to establish the root causes for the reduction of jet fuel at ORTIA, to develop a Fifa World Cup consolidated fuel and logistics plan for all petroleum products, to identify and put in place measures to alleviate the key constraints and risks of jet fuel and to develop a liquid value chain. A key objective in dealing with unplanned eventualities was an emergency response plan with clear responsibilities and the roles for all players, including a coordinated and transparent communication plan to ensure input into broader World Cup issues. Agreements or practices that would require exemption in terms of the relevant section in the Competition Act had to be identified to enable role players in the industry to engage on matters of national emergency or priority.

Progress to date was that the Department had assisted with bilaterals with key role players, more specifically the oil companies and the Transnet Group, to articulate some of the key issues that led to jet fuel shortages at ORTIA. The process enabled the Department to understand what each organisation identified as the areas of high risk, what the causes for those risks were and to understand the key operations of liquid fuel supply and the logistics chain, to identify areas that could cause disruptions to the supply during the World Cup.
The role of the Department was to provide a national perspective of the projections and plans shaped and put in place by role players in the industry, and to start discussing the possible actions that could be taken to alleviate disruptions going forward. After the bilaterals and inception meeting the role of various players and mechanisms of addressing some key issues and actions were discussed and included the terms of reference which defined roles and responsibilities as well as the key deliverables of the task team. The Department was responsible for consolidation and drawing up a national plan while individual companies were responsible for developing their own operational planning to ensure that the supply chain would meet the estimated demand.

The DOE would be participating with various forums, which included the Aviation Sector task team headed by the DOT regarding all aspects of aviation as well as planning for the availability of jet fuel. Also, the Airline Working Group, which represented all the airlines, to gain an understanding of the plans at various airlines, and the projections they have made for fuel demand during the World Cup. Moreover, to gain an understanding of how capacity constraints at the airport would impact on the normal demand for jet fuel, and the ability of that airport to supply the demand, which was projected.

The current supply to ORTIA came from a dedicated pipeline at the inland refinery that supplied approximately 70% of the volume. Some of the volume was supplied through the rail network from the coastal refineries. The fuel supply from the dedicated pipeline and from rail was approximately 33 million litres per week, and 133 million litres per month could be held.
The coastal pipeline from Durban to Johannesburg supplied approximately between five and 10 million litres per week. On average it rolled out about 140 million litres monthly and acted as a back up to the other two modes of transport. These figures were approximate and the average weekly demand was currently 32 million litres according to the last two months. Jet fuel during the World Cup was estimated to be around 52 million litres per week at the airport. The Dedicated Pipeline had an operating capacity of about 22 million litres however the maximum capacity was 25 million, but for operational reasons it did not necessarily operate at that.

The coastal refinery and pipeline from Durban to Johannesburg, which supplied ORTIA, also supplied petrol and diesel and delivered approximately between five and 10 million litres, and was operating at maximum capacity. To improve the throughput of fuel through the pipeline Transnet introduced a drag reducing agent into the petrol or the diesel, which allowed the fuel to move faster through the pipeline. There were implications in using that pipeline for supplying jet fuel because when jet fuel was added into the pipeline, the drag reducing agent could not be used. The implications were that petrol transported through the pipeline would be replaced with jet fuel, and the throughput time of moving that petrol and diesel from the coast to the inland market would be reduced. The coastal pipeline had a long lead-time for getting the jet fuel to the airport because the refinery moved other products as well. Once jet fuel arrived at the airport there was a chance of contamination and the fuel first had to settle before it was usable and also had to be re-certified. To avoid contamination it was imperative that storage tanks were available and empty when the jet fuel arrived

The constraint from the inland refinery was it was already supplying the bulk of the volume and could not supply any fuel, over and above what the pipeline capacity allowed. The inland refinery also produced or supplied products on behalf of other oil companies, and the bulk of the volume supplied to ORTIA was based on committed customer orders that had to be honoured, and therefore it was difficult to limit supply to the airport. Rail capacity has been identified as an area that could increase throughput to ORTIA. Currently Transnet Freight Rail had 204 rail freight cars, which were in operation as well as block trains that were essentially the same. They also had 32 rail tankers, which they offloaded twice per day at the airport, currently six days a week with average operational volumes at approximately 11 million litres.

Transnet planned to upgrade the rail tank cars to approximately 280 and were considering increasing block trains to approximately 38 or 40 for the World Cup. Should Transnet increase the number of block trains to 38 or 40 they would need an additional shift for offloading the rail tank cars because approximately 16 rail tank cars could be offloaded in one shift. This meant that a maximum volume of jet fuel to the airport could increase by approximately 16 million litres, a difference of almost 5 million litres per week. In that respect, Transnet was looking at increasing its operating days from an average of six days to seven days. To introduce additional shifts, other airport operators needed to be consulted and engaged with, and committed upon because workers from the airport operators also needed to be available to work additional shifts.

The constraints at ORTIA were storage capacity, and ACSA was in the process of constructing two storage tanks, which would be ready around March 2010. If an increased volume of fuel came from the coastal pipeline it could not be offloaded because the storage tanks had to be made available for jet fuel. The dedicated inland pipeline was running at maximum operational capacity and it was difficult to increase throughput. The long lead-time at the coastal pipeline and negative impact of jet fuel on other products had to be taken into account. Sufficient time was also required for re certification and to prevent contamination. Once stock levels dropped to a certain level it was difficult to recover because of the limited throughput infrastructure

Recommendations came about due to engaging with the various stakeholders. Consideration had to be given to additional and temporary storage tanks at ORTIA during the World Cup and ACSA was in the process of constructing two new storage tanks while Transnet Freight Rail had indicated that rail tank cars could be used as storage facilities during the World Cup. The coastal pipeline should be used to meet additional demands, which could not be met through the inland pipeline and rail, and should also be used for emergency purposes. Transnet Pipeline and Transnet Freight Rail were very critical in ensuring that optimal volumes were supplied by each mode of transport between the Durban and Johannesburg pipeline. Rail and pipeline needed to make sure that there was close coordination between the two, to ensure that the sequencing and the scheduling was optimal so that volumes arrived when they were expected, and in the quantities expected. To ensure that disruptions were alleviated forecasting was critical to enable all the stakeholders to coordinate better, and to identify when volumes were deviating from the plan.

To ensure adequate fuel volumes per mode of transport, there had to be coordination with the suppliers to meet the regular demand for fuel and to supply additional capacity. The additional demands had to be accommodated between rail and the Durban - Johannesburg Pipeline (DJP). It was the responsibility of rail to determine how many rail tank cars were needed per block train as well as the offsets by the DJP, to ensure that total volumes at ORTIA were met. To build momentum from the coastal pipeline it was proposed that the monthly fuel delivery should be 75 million litres. Weekly reserves delivered from the coastal pipeline could be approximately 10 million litres. A clear communication plan as well as coordination was essential at all levels and suppliers had to know whether fuel was moving via the coastal pipeline or rail, when the delivery was scheduled for, and how to deal with unplanned volumes, not originally planned for. Ensuring that mechanisms, processes and operations were improved progressing to World Cup 2010. Rail was the only reasonable mode of transport where throughput for jet fuel could be increased without negatively impacting on other products. Transnet Freight Rail had 280 rail tank cars (RTCs) and it was critical that all were brought into operation as planned. The additional shunt to allow 40 rail tank cars to be offloaded per week should also be on schedule, and the deliveries should take place seven days per week.

Clear lines of communication and protocol needed to be put in place and a risk and contingency plan required urgent attention. At ORTIA there was currently a crisis management plan and it had to be extended upon, to ensure that all key role players were part of the plan to cover any gaps. Planning should include all primary airports and not just ORTIA, and should include petrol and diesel not just jet fuel. Centralised and consolidated information needed to be available and all role players had to have access, to monitor daily demands. The role of the airport operators namely companies responsible for dealing with the logistics, volumes and operations of jet fuel at all the airports was critical for the consolidation and coordination of planning operations. Engagement and commitment was required from other stakeholders who were impacted upon through the introduction of additional shifts, and a seventh working day. Forecasts had to be done, daily monitoring was imperative and deviations from plans had to be clearly monitored and communicated to take corrective action during the event.

Primary airports were those identified as the hub, servicing the whole city during the World Cup whereas secondary airports would be used to alleviate congestion at the primary airports. Seven ACSA airports have been identified as primary airports for World Cup 2010 and the secondary airports were non-ACSA airports, of which three wanted to be included in the planning for the World Cup. None of the military airports would be used for additional refuelling for passenger movement.

Airports Company of South Africa (ACSA) World Cup 2010 – ACSA Aviation Fuel Requirements
Mr Bongani Maseko (Operations Director: ACSA) said the presentation would highlight risks that had been identified for World Cup 2010 and how those risks could be mitigated.

Jet fuel was received at ORTIA via three sources namely the rail tank cars (RTCs) and the Multi Product pipeline from Durban to Johannesburg as well as a dedicated pipeline that went directly into the fuel farm at ORTIA supplying 22 million litres per week. There were nine 9 tanks at ORTIA with a storage capacity of 47.1 million litres, the current daily consumption was about 4.5 million litres and storage supply was six days. Two new tanks were in the process of being constructed at ORTIA and at La Mercy tanks would also be constructed and these tanks would provide storage capacity at each airport of six million litres. The daily consumption at La Mercy in Durban was 300 000 litres per day. A table detailed the storage capacity at each of the ACSA airports, and the storage capacity at ORTIA was 47.1 million litres. A bar chart outlined the projected World Cup fuel consumption at ORTIA from 03 June to 25 July 2010 in comparison to what was typically consumed at the airport, and it indicated the estimated increase in the fuel consumption for the period.

A key challenge was the guarantee of jet fuel supply on a continuous basis and there would be sufficient capacity to store fuel at ORTIA, based on the infrastructure. The three different modes by which jet fuel was received, was absolutely imperative and there had to be no interruption of the fuel supply experienced in August, which led to problems. Moreover, fuel used on a daily basis had to be replenished. For each ACSA airport the storage capacity, the daily estimated consumption and what stock had to be replenished was mapped out. The Bloemfontein and Port Elizabeth (PE) airports had inadequate storage capacity based on the increased volumes for the World Cup. The PE airport would start experiencing problems as from 14 June. Indicated games on 13 June, 17 June and 24 June would see PE airport operating on a 24-hour basis and the storage of fuel was a key priority. Interventions were important and there were some measures that needed to be put in place to ensure adequate supply. ACSA was negotiating for the storage of jet fuel within the City of Mangaung and flights to Bloemfontein could refuel at ORTIA.

At all the airports the supply chain and three modes of transport for jet fuel had to be guaranteed during the period of the World Cup. Of the designated airports for World Cup 2010, Kruger, Mpumalanga and Lanseria Airports were privately owned. Lanseria had a storage capacity of 900 000 litres and Gateway International was owned by the Province of Limpopo. The emphasis was on logistics planning and execution during the World Cup, which was extremely vital. He stressed that the inadequate supply of jet fuel or the guaranteed supply of jet fuel at all the airports was the biggest threat to operations. Cooperation and the sharing of information amongst all role players in the aviation industry were going to be critical in anticipating problems and putting contingency plans in place to avoid the fuel problems that occurred in August at ORTIA.

Mr S Farrow (DA) stressed that it was important to get a comprehensive picture of the supply problems at all the airports since Ms Ramuetzisi mentioned that the recovery period was very slow. He said it was absolutely necessary to know what the recovery period was at ORTIA to bring the fuel situation to normal as well as the reasons for the delay. Moreover, the reports did not reflect the serious issue of leakage, shrinkage, evaporation and all other things associated with fuel storage. The millions of litres of fuel spillage at ORTIA went underground and that would have had an environmental impact, and what assurance had been given to deal with the problem. At an ACSA presentation at La Mercy getting fuel to the airport was discussed, and 25 tankers per day would go there, just to keep up with the current requirements. Based on the current transport networks he asked how the tankers would access the airport and what the impact would be on the runways and asked what initiatives were in place to address it. He asked whether there was an undertaking and clear memorandum received from Transnet to provide 76 additional RTCs. He said that without an undertaking from Transnet they should not rely on the RTCs as it could take years to import. Alternatively Transnet would have to refurbish their stock.

Mr A Vermeulen (ACSA) explained that the coastal airports had one method of supply into the airports and the process for the certification of fuel required a minimum settle in time of anything between 30 minutes and four hours, after which the fuel could be used. At ORTIA two of the tanks were isolated and the multiple pipeline supplied multi products or fuel and there was the potential to have diesel or other fuels between the jet fuels. The certification process for jet fuel took between six and nine days and a physical sample had to be checked by the refinery and re certified clean and suitable for use. The ORTIA site was a difficult site to manage because long haul flights and national carriers terminated their flights at ORTIA, and uplifted a lot of fuel on their way back to Europe and other places. At ORTIA they worked on useable stock, as there was no definitive way of determining what the absolute stock at the airport was. ORTIA was a key airport in planning for World Cup 2010 and critical in the supply logistics of jet fuel.

At Cape Town between 29 and 35 truckloads of jet fuel was road freighted from the Caltex Refinery to the airport per day. ACSA was planning a dedicated pipeline for Cape Town after the World Cup. He stressed that at this stage a pipeline was not viable for La Mercy as there was not enough volume and a certain minimum flow rate was required to ensure that the quality of the fuel stayed on spec. On a very busy day ACSA stocked approximately 280 000 litres at the site. The tanking of fuel to La Mercy and the road freighting of jet fuel to the airport in Cape Town was currently between 1.9 and 2.1 million litres per day.

Ms Ramuetzisi explained that the reasons that led to the loss of fuel was because the inland refinery was unable to supply the full amount of fuel and subsequently rail deliveries were disrupted. The recovery period of jet fuel at ORTIA was slow because the inland refinery could not supply the full replacement amount and in addition it became difficult to exceed the normal supply to ORTIA. The recovery period started at the beginning of July and ended when the volumes resumed to normality in August. The concern of additional RTCs that Transnet Freight Rail was considering for added storage during the World Cup was a recommendation that had been made. A part of the task involved understanding how additional RTCs would be off loaded and indications were that it would not impact negatively. In adding to the fleet Transnet was not importing additional rail tankers and were relining or refurbishing the current rail tank cars to ensure standards were met to store the jet fuel. If the current fleet was expanded from 240 to 280 the current rail cars should be able to deliver and the additional ones would only be used for contingency storage. The DOE was in the process of determining which route to take, and if that was the route, what volumes needed to be kept.

Mr Maqubela responded that the report of the task team established that rail operated below optimal required levels and prior to that there had been some challenges related to the pipeline. If the Committee required a report it could be produced.

Mr A Vermeulen said that all the lines and refueling pits had gone through a process of refurbishing at ORTIA and were less than eight years old. A design flaw in the physical installation probably caused the incident in August and two flanges came out, and fuel leaked into a storm water system. Tests were done on a continuous basis to ensure that the pipelines were fit for use and currently ACSA was commissioning a leak detection system that would provide certainty that the pipelines were intact.

Mr S Motau (DA) asked when the task team held their first meeting, how much work they had completed to date and from whom he could get information related to the presentations. He said that there needed to be a central point for crisis communication where solutions could be provided.

Mr A Vermeulen explained that a lot of work had been done to determine the fuel quantities and that passenger numbers drove fuel quantities. A few assumptions were made based on worse case scenarios and as passenger information became available the numbers would be adjusted.

Ms Ramuetzisi responded that the task team met on a monthly basis, the first joint meeting was held in September and regular monthly meetings had to be held. Monthly progress reports of the meetings had to be submitted to the Minister.

Mr J Schmidt (DA) enquired if the Unions had been brought on board to discuss the supply of jet fuel, additional shifts, longer hours, and strikes as well as the handling of these issues.

Mr Maseko said at forums the issue of Cosatu, stakeholders, safety, security and, proper
coordination was engaged with. These forums were not only led by ACSA but by host of other entities.

Mr Vermeulen responded that ACSA had spoken to the Department of Labour and were going to apply for Ministerial Determination and give ACSA workers the first choice of working overtime. Contract and additional staff would be considered to help with the many services, and highly qualified staff would supervise. ACSA was at the stage of putting names into schedules so that people were aware of where they would work for the duration of the World Cup.

Mr E Lucas (IFP) agreed that extra capacity at ORTIA would be the best solution but was concerned about the RTCs being stationary because the presentation indicated that it could become contaminated. He asked whether the refinery could meet the extra demands, if there was enough space for the tankers and where they would park without interference. He was concerned about the extra capacity that would be required at La Mercy and emphasised that the smaller airports should not be neglected, as they would also need additional capacity since many people would be travelling from smaller airports to the centres.

Ms Ramuetzisi explained that the discussion about stock contamination was merely to highlight the contributing factors of the long lead times when fuel was coming through the coastal pipeline. A key operational risk was that if the process was not adequately managed and jet fuel mixed with other products, there was a risk of contamination. The critical exercise of re certification was to make sure that the fuel met the quality standards.

Ms N Mathibela (ANC) enquired whether the storage that had been planned was sufficient, and how soon it would be in operation since SA imported fuel.

Mr A Vermeulen responded that additional fuel storage capacity at ORTIA would amount to approximately 56 million litres and would be more than sufficient for the World Cup. The 12 tanks being completed during mid March would take about a month and a half to fill, get the schedules into the multiple pipeline and the fuel into the airport. ACSA would not be able to fill more tanks because of the supply logistics and because it was not viable.

Ms Ramuetzisi said that the planning process highlighted the different key role players that were needed on board, as there were many dependencies, and additional information refined the process. Certain projections done by the DOT about passenger movement was used to inform some of the demands, for liquid fuel. Planning was an ongoing process and when the final draw took place and the final schedules were decided, and as more information became available plans would be refined.

Mr Maseko responded that the plans were based on a worst-case scenario. ACSA held regular meetings with the Local Organising Committee (LOC) to monitor the ticket sales and as and when ACSA knew which additional teams had qualified plans were reviewed. The next major milestone was the draw on the 04 December when it would be finally known which teams would be playing with whom, and where those games were likely to take place.
During mid December once the final draw had taken place ACSA would share its plans and work towards refining the plans for the World Cup.

Mr T Maqubela (DOE) explained that there were various interests and competition between the oil companies and role players as well as issues of control. Security of fuel supply was the responsibility of the Minister of Energy whereas Transnet may view the logistic supply of fuel as their domain. To facilitate planning the sharing of information such as airline bookings was very useful for the DOE. The logistics needed an intervention mechanism between the DOE and the Transnet Group of Companies to intervene when it was required. It was necessary to think through investing in storage since local economies would grow and had to be serviced. The task team was engaging with non-ACSA airports and a decision was taken that they had to be part of the task team and the DOE had to be allowed to direct operations.

Ms Ramuetzisi emphasised that the current refining capacity was inadequate and limited, and indications were that the additional demand during the World Cup would have to be met by imports. The Ports Authority would have an important role to play in ensuring that fuel cargo was properly scheduled at the ports and at the births because if there were congestions at the point the fuel needed to go into the pipeline, it would lead to other problems. In Bloemfontein there were plans to refurbish some of the storage capacity and at PE the DOE was engaging with all companies that supplied the airport to understand what plans were feasible and what needed be put in place to ensure a consistent supply to the airport during the period.

Chairperson Thabethe said that the question of negotiations during the period of the World Cup did not receive a clear response and it was an issue that concerned everybody, and the DOE and Committee members were involved in the engagements.

Mr Maseko responded that it was part of the contingency planning and that all stakeholders had been encouraged to enter into multi year agreements. SAA were on the verge of completing a multi year agreement with their unions and all stakeholders were encouraged to do the same to try and minimise strikes. Stakeholders were required to also have contingency plans in the event of industrial action, because it was not sufficient to only have multi year agreements in place.

Mr J Selau (ANC) said that there would be a sudden boom and benchmarking was very important in order to address other areas such as capacity, maintenance, safety, reserves, job creation beyond the World Cup and its the impact. Little was said about fuel requirements for supporters travelling from homes and residences. Were there links with bus companies, taxi organizations and trains because a lot of diesel and petrol would be needed for those people? Was a plan to engage with the behaviour of the supporters when they come into the country, their methods and modes of transport and the anticipated fuel that would be required? He asked if there were any legislative proposals that needed to be processed because there were only a few months left to the World Cup and whether Cosatu and SAPS had been engaged with. He enquired whether stakeholders included the SADC countries and asked whether they had been communicated with about possible fuel shortages as well as other services. Moreover, he asked whether Cosatu, SAPS and other stakeholders had received communication.

Mr Maseko said he was not aware of the outcome of any studies that had been done by South African Tourism on the impact of the World Cup on job creation for permanent and temporary jobs but they were looking at a study to understand what the impact would be.
The aviation sector would create some temporary employment but when that demand was gone there was very little need for the airlines and stakeholders to retain staff they did not need. A lot of coordination needed to happen in the host cities and a major concern was getting people from the airports into buses, taxis and public transport to the stadiums. Public transport also included tour operators with large tour groups that needed to be properly coordinated. The process had started and in some instances the process was far more advanced than others, and in a recent meeting with the Local Organising Committee (LOC) it was decided to fast track the process.

Mr Maqubela said the Minister had expanded the role of task team to look not only at jet fuel but all other fuels and it might be that jet fuel would not be the biggest challenge and that all tasks were a work in progress. The LOC dealt with issues of security and the Minister of Energy had signed a security agreement on protection of a nuclear installation and the process would be facilitated by the International Atomic Agency. He said no change in legislation was required and it was important that the organs of state just cooperated and did what was expected from them for World Cup 2010.He stressed that neighbouring countries had a role to play and were being engaged with. The country that had significant infrastructure was Zimbabwe and that infrastructure was currently under utilised. Zimbabwe was completing the refurbishment of their jet fuel handling facilities because they were anticipating increased traffic. Engagement was ongoing, and there were plans with other countries like Namibia and Botswana in particular, as well as Mozambique.

Mr D Kganare (Cope) asked whether road trucks had been considered as an alternative form of transportation to pipeline and rail.

Mr Maqubela said the DOE favoured only two modes of transport, pipeline and rail, and as a last resort road transport could be considered. It was also much cheaper to transport fuel via pipeline and rail.

Ms P Ngwenya-Mabila (ANC) enquired if the task team had finalised its investigation because a report outlining the findings and recommendations was needed to ensure that the recommendations were clear. If the report was not yet not finalised, when would it be done?

Mr A Ganu (DOT) emphasised that a worse case scenario was being planned for. Industry specific solutions were not outlined in the presentation but that would be dealt with after the draw on 04 December. Interim measures could be put in place if there were a crisis. If an international flight had problems flying out of the country because of a fuel supply problem it could load a certain quantity of fuel, and stop over at another country to pick up the remainder and fly out. For the World Cup 400 000 to 500 000 additional passengers were expected and the demand on the domestic legs would be increased and if a fuel problem were experienced an arrangement could be made to load fuel at the coastal regions since fuel supply was easier to achieve there.

During the World Cup the focus should not only be large commercial carriers as there was a large general aviation industry in the country with small four to six seater aircrafts. These aircraft were propeller driven and normally utilised Afgas. Many tourists would utilise these aircraft when visiting the game parks and flying from the small airports. There would be an increase in demand for Afgas and industry discussions would take place with the small and large carrier associations. The type of aircraft utilised by the airlines would determine the quantity of fuel that needed to be available, and it would impact on the fuel loaded.
A very clear indication would be available once the draw was done and once airlines started applying for slots and categorising the types of aircraft they would be flying into country. A proper picture of what quantities could be expected and required from the airports would then be clearer.

Chairperson Bhengu wanted a very clear understanding of fuel storage at coastal areas and asked whether the fuel storage at Durban international airport was currently adequate or if storage would be moved from Durban international to La Merci airport. Teams were allowed a 20km distance from the hotel to the airport to fly to wherever they were playing. The practicing and venue cities were not mentioned in the presentation and the criteria for a city to qualify. A practicing venue required a regional airport that was big enough to accommodate bigger flights. She asked if there were no problems around the practicing venues in relation to the fuel shortage as well as the movement of the flights back and forth to those areas where the games would be held.

Mr Vermeulen explained that a decision was made not to construct any further facilities at the existing Durban site and ACSA’s fuel capacity storage was very limited. At La Merci there was 6 million litres, which would provide for 17 days under normal operating conditions and four tanks of 1.5 million litres, with new state of the art facilities where you could decant or refuel the tankers very smoothly and quickly. The intention was to close down the Durban site completely and operate from the new airport at La Merci just prior to the World Cup from 01 May 2010.

Mr Maseko said the storage facilities at Durban would close, and new storage facilities were being constructed at the new airport at La Merci. There were up to 60 practicing venues for participating nations to select from and which venues would be practicing venues and base camps would be known after 04 December. After that there would be an indication of the specific problems in moving fans in and around base camps.

Chairperson Bhengu thanked all the presenters. Two issues had been identified in the meeting and it related to the current situation of the supply of fuel and energy. What came out strongly was the lack of coordination and cooperation between the Departments and also government entities particularly Transnet as a critical player in transportation. The coordination related very much to the DOE and how Transnet related to the DOE was critical, and would need a follow-up by both Portfolio Committees in coordination with the Portfolio Committee of Public Enterprises. That would facilitate an intervention that was required to ensure that cooperation was developed and there was a smooth working relationship with Transnet, DOE and DOT.

As a long term intervention there seemed to be a need for a clear strong role of the government in the fuel industry and that would also require a follow up by Parliament, initiated by the joint meeting. It was important to look at the role of the government in the fuel industry to ensure that there was strong participation by the government so that in future not just indicators were focused upon but the underlying problems had to be tackled. A follow up meeting would be held by the two Portfolio Committees to chart a way forward.

She asked how Parliament was informed of the work of the task team because it was a core structure that had another role player, and there was no Portfolio Committee that it accounted to. Since the Minister of Energy established it, the Portfolio Committee of Energy would have to take a lead to ensure there was reporting to Parliament on progress that was made as well as the impact and achievements of the work that would be done. The presentation and input had enabled the Joint Committee to have a better understanding of what the situation was and challenged them to think of how to improve the situation.

Chairperson Thabethe said she understood that the DOE was the lead Department and the DOT, DTI and Public Enterprises were stakeholder enterprises and formed part of the INT, which was answerable to the Deputy President who was leading the preparation for World Cup 2010. Certain responses would also be best tackled at the Executive level and issues that impacted on the Committees’ oversight role had to be dealt with by the Committees. The implementation and coordination appeared to be problematic in coordinating but the Confederations Cup was quite a success as well as cricket and rugby events. A lot of issues needed to be sorted out before the 2010 World Cup and some of those needed to be dealt well in advance so that the Committees were able to follow up.

Transport’s Third Term Programme and Strategic Plan: consideration and adoption
The Chairperson explained that the strategic plan would take the Committee from 2009 to 2014 and related to key priority areas, which consisted of the Role and Mandate of the Portfolio Committee on Transport, Strategic Priorities Arising from the 2009 State of the Nation Address, Key Priorities for Transport (2009-2014), Key Priority for Transport Legislation, Oversight Visits, International Study Tours as well as areas that the Committee would be focusing on during the first term of 2010 leading to the second term of 2014, which would also be the end of the Committee’s term.

The plan was not rigid in what needed to be done in each meeting and during each month.
It guided and directed what needed to be focused on for now, and over the period of five years. In between specific plans relating to day-to-day meetings would be developed and study tours at a national and international level would be conducted. The overall plan had to be adopted in the meeting and then submitted for approval.

Mr Farrow emphasised that he was concerned that the safety aspects of travel did not seemed to be identified as a key priority and it was discussed but appeared to have been omitted. The issue could not be ignored and the Committee had to address it before people started travelling to SA in 2010. The point system also had to be highlighted and included in the programme.

The Chairperson said that it may have been overlooked and would be included in the plan.

Mr Farrow responded that he did not think it was emphasised but that it could be included in the Committee’s priorities. Transnet had Operating Licences but the Committee would have to take the initiative to ensure that Operating Licences were bought because much more buses would be needed to travel across the country. The National Transport Act required that at municipal level, provincial level and national level to ensure that public transport operated efficiently prior to the World Cup. There could be a need to discuss the issue with some of the Provinces regarding their initiatives and whether they had Operating Licences. Currently the system was not working and it took 18 months to get through the process, new buses were arriving in the country and time was limited.

The Chairperson said that the issues referred to were covered in February of the strategic plan and they would be dealing with an update of operating licences.

Mr Farrow responded that he thought it should be captured as a key priority in the overview of the strategic plan as it was an initiative that had to be taken by the Committee unless it was covered in other areas of the key priorities.

The Chairperson said they would deal with the issue under Key Priorities for Transport (2009-2014): “Ensure there is an integrated transport plan and coordination model with all spheres of government”.

Ms Ngwenya-Mabila said that the issues raised by Mr Farrow would cover operational areasand particularly the state of readiness of all transport nodes.

Mr Lucas explained that an article in the newspaper referred to drastic increases of airfares in 2010 for one month and then it would come down again. He said that was ridiculous and was an impediment to businesses and those who travelled internally.

The Chairperson said that theissue raised by Mr Lucas was important and could be incorporated when dealing with issues relating to the state of readiness.

The Committee approved the strategic plan and programme.

The meeting was adjourned.
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