Transnet ordered to pay Spill Tech R177m

Cash-strapped state-owned freight rail company Transnet will have to fork out R117-million to a Gauteng contractor after the South Gauteng high court found it reneged on a contract it had with the firm by giving work meant for it to a rival.

Before 2016, Spill Tech was the only service provider that provided services related to the containment of spillages and remedial work of polluted sites on Transnet’s vast fuel pipeline effectively from 2013.

Transnet’s liquid fuels network traverses the provinces of KwaZulu-Natal, Free State, Gauteng, North-West and Mpumalanga, handling an average of 16-billion litres of liquid fuel per annum.

Transnet, sometime in 2016, decided to go out on tender and split the contract, without appointing a panel of service providers from whom it could choose should spills occur. Following the procurement process, Spill Tech was awarded the contract to attend to spills above 50 000 litres and Drizit Spill Technologies for spills below 50 000 litres.

The issue of whether a spill was major or minor was managed in the following manner: when Spill Tech attended to a site, and it emerged that the spill was minor, it was asked to hand over the site to Drizit.

The process also worked in reverse.

However, during the course of the contract, Transnet would call Drizit to attend to spills of above 50 000, the terrain that according to the contracts, belonged to Spill Tech.

Spill Tech then sued Transnet for loss of income, with the court ruling in the company’s favour.

Spill Tech is a nationwide hazardous waste response company that specialises in providing rapid response to hazardous waste spills and discharges.

The company handles a wide range of hazardous waste materials, including but not limited to, oil, chemicals and medical waste.

According to the court papers, Transnet would provide Spill Tech with as much information as they had regarding the location of the spill. Transnet would also provide information on what type of product was involved such as diesel, intermix (a mixture of diesel and petrol), or Avtur (jet fuel). The Spill Tech operational team would then deploy to the site to contain the spill.

In the judgment, Transnet’s application for review of the arbitral award was dismissed.

Transnet’s liquid fuel pipeline has often to contend with leaks due to damage caused to the pipeline network by thieves or by wear and tear.

The lucrative pipeline has also increasingly come under siege from syndicates looking to steal oil and sell it on black market.

Transnet has reported about 465 theft and sabotage incidents of critical infrastructure since 2019 that have led to the conviction of 21 criminals.

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