Oil refinery project stalls

Rochelle de Kock

ON HOLD: President Jacob Zuma's cabinet was to have pronounced on the much anticipated Project Mthombo destined for Coega a year ago. Picture: GCIS
ON HOLD: President Jacob Zuma’s cabinet was to have pronounced on the much anticipated Project Mthombo destined for Coega a year ago. Picture: GCIS

A YEAR ago, Eastern Cape premier Noxolo Kiviet said President Jacob Zuma’s cabinet was weeks away from giving the go-ahead for the much-anticipated refinery in Coega, Project Mthombo.

It is a year later and feasibility studies are still being conducted to check if the R100-billion oil refinery project would be viable, and government is still lobbying for what would be one of the Eastern Cape’s biggest projects.

As Kiviet prepares to deliver her final state of the province address, to mark the end of her five-year term, she is expected to pronounce on some of the provincial government’s top achievements.

Progress on Project Mthombo, however, is not yet one of them.

In her speech last year, Kiviet said: “We have been asked why this project has taken so long.

“Unfortunately some people think that when a project is announced then the next day construction should start. We needed to answer the questions: does this project have capacity, sustainability?

“The important thing is the project is being looked at by cabinet and we do not see anything that says it could be turned away. We agreed it is needed.

“We expect cabinet to give the go-ahead in a few weeks.

“I’m glad our leaders from national [government] are here; these are the men and women who will carry it on their shoulders and deliver it.”

Yesterday, Economic Development, Environmental Affairs and Tourism MEC Mcebisi Jonas said studies were still being conducted and he could not pronounce on a date when parliament would consider the project.

“Project Mthombo is included in the NDP (National Development Plan) and the NDP was adopted by cabinet, but what is problematic is the date.

“The NDP talks about a date of 2017, but we must appreciate the shale gas project in Mozambique is introducing a new element to the space.

“We still think it’s a critical project and we will continue to lobby for it,” Jonas said.

It is an open-secret that PetroSA is keen to tap into the abundance of natural gases in Mozambique, but this raises questions about whether or not it would still be interested in pursuing the oil refinery in Mandela Bay – a project that would not only cost billions, but take years to get off the ground.

Meanwhile, last year Kiviet said thousands of jobs and billions of rands in investments were set to come to the Coega Industrial Development Zone.

She said: “The Coega IDZ has operational investors on site with private investment of more than R1.2-billion. In addition, secured private investments of R5.4-billion are currently being implemented, with investments of more than R8-billion in the project pipeline.

“These investments are aligned to sectors prioritised in our Provincial Industrial Strategy, including metals beneficiation, energy, automotive, chemicals and agro-industry.”

Yesterday, spokesman for the Coega Development Corporation Ayanda Vilakazi said the Coega IDZ pipeline was “incredibly promising” with an investment portfolio of R140-billion.

“Projects at [a] negotiation stage [amount] to more than R9.8-billion; projects at pre-feasibility [are] amounting to more than R2.3-billion; projects at feasibility amounting to more than R93-billion, bringing the total investment pipeline to R115.3-billion.

“This figure excludes smelters which pushes the pipeline way over the R140-billion mark,” Vilakazi said.

The CDC has surpassed its employment opportunities targets by 134% in the 2012-2013 financial year, by creating 13607 jobs against a target of 10056 jobs.

“Currently in this financial year – 2013-2014 – it has created 9498 employment opportunities thus far,” Vilakazi said.

Between February and December last year, the CDC signed lease agreements with investors, and a further seven are expected to be signed by the end of next month.

Last year, Kiviet announced the Elizabeth Donkin Psychiatric Hospital would be moved to Dora Nginza Hospital, a promise that has since been fulfilled.

Patients were moved to Dora Nginza early last year and the provincial Department of Health is forging ahead with plans to build a new psychiatric hospital.

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