Tag Archive | SASDA

CEF still has its troubles

CEF subsidiary SASDA faces closure

Reporting under the Central Energy Fund label during parliamentary presentations to the portfolio committee on energy, the South African Supplier Development Agency (SASDA) admitted that in incurring a loss of over R18m during 2011/12 and a loss estimated at R14.5m for the present year, shutdown or liquidation was inevitable.

Lunga Saki, acting CEO, said the situation had become untenable.

He described SASDA as the “driving force behind the liquid fuels charter” but that SASDA, with dwindling cash reserves and with CEF “having insufficient dividend flows from subsidiaries” had put tremendous pressure on SASDA’s ability to continue its work, funding for which at present existed as loans from the central group.

Directors anxious to resolve

CEF had said that as a body it was to approach the department of energy and industry players such as SAPIA on the future of SASDA.  A possible liquidation was on the books, since the directors of SASDA did not want to enter the realm where they, knowing that SASDA had liabilities which exceeded its assets, could be accused of reckless trading and SASDA receiving qualifications from the auditor general with them at the reins.

SASDA focused on mentoring and coaching, providing technical support, skills training, facilitated access to raw materials, project management and they claimed facilitated financial support to CEF projects.

General picture

Sizwe Mncwango, CEO of CEF, in reporting to Parliament on overall group activities, excluding that of subsidiary PetroSA which in view of its size and structure reported separately, said he would focus on the work of CEF excluding this

CEF was in the process of restructuring for growth, he said. He saw the group as contributing to national security of energy supply dealing in renewables, oil and gas, strategic storage, licencing, mining development projects and supplier development issues within the energy field.

In clean energy, CEF’s project at Solar Park had a mission of developing renewable energy and low smoke fuel projects and agreements for solar water heaters had been signed in cooperation with the departments of human settlements and energy. Their second phase of this successful project was about to start. Photovoltaic (PV) manufacturing was being investigated.

Strategic stocks

On strategic stocks and storage facilities the company stored and managed third party crude oil on a commercial basis in order to fund the oil pollution prevention and control activities at the Saldanha Bay, Milnerton and Ogies facilities. There was a major project which included office refurbishment at the Milnerton Tank Farm, with tank refurbishment being undertaken with more sourcing of additional strategic stock tanks required.

A warning was given that the oil pollution sea vessels were aged and the fleet was urgently in need of refurbishment.

David Van Der Spuy, acting general manager at the Promotion Petroleum Agency South Africa (PASA), explained to parliamentarians the implication  of section 71 of the Mineral and Petroleum Resources Development Act (MPRDA) on the need to promote onshore and offshore exploration and production of petroleum, monitor and report regularly to the Minister in respect of compliance on permit, rights and licensing.

PASA faced a funding problem, he said, but the regulation of MPRDA remained an imperative and could not be threatened.

CEF coal venture

CEF also reported on its small coal mining venture at Vlakfontein, Mpumalanga, run by a subsidiary African Exploration Mining and Finance (AEMFC) which amounted to a pilot development and which was successfully mining 1.5m tons of coal, with no fatalities.

This financed a mining exploration venture known as Pan African Minerals Development Corporation (PAMDC and was driving PAMDC’s additional coal exploration programme. CEF investments shareholding in PAMDC was 33.3%, AEMFC being a 49% participant at project level but the group was searching for third party funding to hive the project off and engagement with the department of mineral resources was positive.

Sizwe Mncwango told parliamentarians that this was the main objective of CEF in building successful energy participants and letting them flourish on their own, once identified as a successful participants in the energy environment

PetroSA a separate issue

Such was the case with PetroSA, a part of CEF, who would report to Parliament in their own right, Mncwango said.

On questioning it became clear that, aside from the SASDA problem, much of the focus on the balance sheet had been in the creation of loans and funding for PetroSA. Consequently CEF, other than certain mandates such as that retained by PASA in licensing and oil spillage, was mainly involved in support programmes, skills development and sustainability of projects which involved the state’s drive to make contributions in the energy field.
Associated articles archived
http://parlyreportsa.co.za//uncategorized/central-energy-fund-slowly-gets-its-house-in-order/

 

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