January 25, 2012

Bitumen Shortage in South Africa

A shortage of bitumen  which is used to produce asphalt for road surfacing has affected about 35 SA National Roads Agency Ltd projects, in addition to other major road construction projects, including the John Ross Parkway upgrade in Richards Bay and highway construction in Durban.
The shutdown of the Sapref refinery in Durban for unexpected maintenance is set to exacerbate SA’s bitumen shortage, further delaying construction and pothole repairs.Bitumen is a by-product of oil refineries and is used to produce asphalt for road surfacing. But due to high demand, in addition to planned and unplanned shutdowns of oil refineries, the bitumen shortage has worsened. 
There have been bitumen supply constraints since the World Cup construction boom. Up to 35 SA National Roads Agency Ltd (Sanral) projects have been affected by the shortage, in addition to the John Ross Parkway upgrade in Richards Bay.
“Sapref’s shutdown is certainly going to have an impact and will make the current bitumen supply situation worse,” said Saied Solomons, chief executive of the SA Bitumen Association (Sabita).
“That’s the biggest oil refinery in the country… The Enref (Engen) refinery in Durban also only recently came back on line after the fire and maintenance shutdown late last year. However, there is very little new bitumen coming onto the market at the moment.
“The situation is dire and is significantly impacting on the industry. It is not just big construction and asphalt companies that are being affected but small companies too, which is having a ripple effect on other business sectors.”
Solomons said the association was in talks with refineries, as well as the departments of Transport and Energy, about solutions to the problem.One costlier alternative was to import bitumen, and some construction and asphalt companies had banded together to import about 4 500 tons recently.
“South Africa uses roughly 420 000 tons of bitumen annually now… It is difficult to say what the supply shortfall is at the moment. However, what I can say for sure is that the demand/supply at the moment is extremely tight,” said Solomons.
Brian Henwood, consulting engineer at Henwood and Nxumalo, which is working on the John Ross upgrade, said the situation was worrying.“The bitumen shortage has had a huge impact on business in the road-building industry, as all road projects have experienced problems because of the lack of supply.
“The bitumen shortage could start impacting on the sections of the new east-bound carriageway that are nearing completion,” he said.
Last month, in a written response to questions by the DA in Parliament, Transport Minister S’bu Ndebele said more than R1 billion worth of work would not be able to be completed by Sanral contractors in the 2011/12 financial year.
“Sanral, the Department of Transport’s roads agency that accounted for 70 percent of the road bitumen usage in South Africa during 2010, is severely affected by the shortage of bitumen… Various steps have been taken to address the short, medium and long term implications of the shortage of bitumen,” said Ndebele.
“The Department of Transport and Sanral have been actively engaging with the Department of Energy in an attempt to highlight to them the various problems related to the supply of bitumen from the existing refineries in South Africa and to find solutions for the medium to long term.
“Sanral has also been actively engaging with the road construction industry to directly import bitumen from overseas to overcome the local short-term supply constraints.

By Suren Naidoo and Marie Strachan
Source -   http://www.iol.co.za/mercury/refinery-closure-fuels-bitumen-crisis-1.1215263
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