DoE seeks comment on proposed revisions to fuel-price formula

DoE seeks comment on proposed revisions to fuel-price formula

5th December 2018

By: Terence Creamer
Creamer Media Editor


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The Department of Energy (DoE) is calling for comment on a discussion document it has compiled following a review the basic fuel price (BFP) structure for petrol, diesel and illuminating paraffin.

The BFP formula has been employed to calculate the prices of petroleum products produced at South African refineries since 1999. The formula is not reflective of domestic production costs, but rather what it would cost to import refined product by establishing a “deemed” import parity price.

Under the deemed pricing mechanism it is assumed that there are no domestic refineries. In reality, South Africa has four crude oil refineries and two synthetic-fuels refineries, which produce petroleum products to meet about 80% of domestic demand.

The DoE discussion document concludes that the import-parity pricing principle should be maintained for imported petroleum products, but that the BFP should be “un-deemed to reflect the actual cost of landing products at South African ports”

The document also proposes several changes to inputs used to inform the BFP formula, which is composed using the following cost elements: the free-on-board value of products in selected reference markets; freight costs; insurance; ocean leakage and evaporation; cargo dues; demurrage; stockholding costs; and financing costs.

For instance, the DoE recommends that the reference markets be adjusted from the prevailing 50/50 weighting between the Mediterranean area and the Arab Gulf area for diesel and illuminating paraffin to 70% Singapore and 30% Arab Gulf.

For petrol, which currently uses a 50/50 split between the Mediterranean area and Singapore, the document proposes a 60% weighting for Singapore and 40% for the Mediterranean area.

The proposed change is based on import data sourced from the South African Revenue Service for the period 2010 to 2016.

The document also proposes the removal of a 15% premium on the freight rate, which it says could not be justified during investigations and discussions with pricing specialists, including Platts and Argus.

The DoE is also proposing that the 0.3% provision made for ocean losses and evaporation be reduced to 0.1% and that demurrage days be reduced from three to two.  In addition, it is recommending that the coastal storage element in the formula be reduced from 25 days to between 10 and 15 days following further consultation with the oil companies.

The department has set a deadline for submissions of January 31 and indicates that it plans to implement a revised BFP formula in 2019, after an “extensive” consultation process, which will include a workshop with stakeholder



Driving safely around schools

December 4, 2018

By Eugene Herbert

With more and more schools opening in the suburbs each year it is important that drivers – particularly fleet drivers operating in those areas – be aware of the dangers associated with driving in this environment.

While it is true that the legal speed limit is 60km/h it does not imply that it is safe or prudent to drive at those speeds around schools. In fact, many drivers conduct themselves atrociously in these areas and sadly are not alone. These habits are common to other parts of the world.

In 2015, US drivers illegally passed school buses more than 13 million times. Ignoring school bus traffic regulations is not only illegal in the US, it can have tragic consequences for children and drivers alike. About eight children lose their lives every year to drivers who disregard school bus stop signs.

Here are some recommendations when driving around schools.

  • Slow down: When driving in neighbourhoods with school zones, be aware of the speed limit and follow it or drive under it. MasterDrive recommends a reduction of up to 50%, yes that means 30km/h or lower.
  • Be alert: Watch for children walking, playing or assembling near bus stops. Also, children arriving late for buses may suddenly dart out of nowhere, so it’s wise to be extra cautious.
  • Obey the rules of the road: Drivers must follow laws — regardless of which direction you are travelling. Be considerate of other road users and don’t be impatient as this could cause you to knock over a child – with tragic consequences.
  • Know the danger zones: Not all kids ride the bus so be on the lookout for children crossing unmarked intersections and roadways. In addition, pay extra attention when making right turns or at red lights — kids are small and you can’t always spot them as easily as adult pedestrians.

Watch a video from CBS News to learn more about driving safely in school zones and near school buses.

Click here to read more MasterTips


Fatigue increases accident risk

November 27, 2018

By Eugene Herbert

Accident risk increases by 8.3% when a driver is fatigued and behind the wheel for more than six hours, according to the latest safety findings from a proprietary accident risk model developed by Azuga. They are an industry provider of connected vehicle and fleet technologies in the United States.

The tool also identified accident surges linked to high-risk driving hours. Specifically, the findings suggest that accidents can increase by as much at 9.1% for every mile driven between the hours of midnight and 3 a.m.

Risky driver behaviours such as speeding, changing lanes without checking blind spots and hard braking increase the risk of an accident. Azuga’s latest model now leverages data to drill down and assess some of those issues and threats.

For example, the risk model findings indicate that one hard braking incident per every 100 miles driven increases the risk of a preventable accident by a whopping 16.9%.

Created to assess the level of threats for drivers, the latest analysis-based consultative solution from Azuga is designed to help fleets monitor driver behaviour, reduce risk and ultimately, lower costs related to driving incidents.

The new tool leverages the combined analysis of real accident data from over 6 000 vehicles with individual Driver Scores determined based on the frequency of risky driving behaviours. These include hard braking, acceleration, posted speed limit violations, distraction and fatigue.

While these are shocking it is recognised that the solution to the problem is multifaceted and confirms that a combination of actions – from policies, to examples by management to driver training – is what can support improving road safety for fleets.


Switched On Driving

November 20, 2018

By Eugene Herbert

 Understanding the ABC’s of your new car and what this can do for you

It is true that many look forward – for a variety of reasons, some of which are because of its acclaimed safety benefits – to widespread use of autonomous vehicles. It should also be noted that we already have levels of these in use already.

In a current project, researchers in Australia, on behalf of VicRoads, are engaging with a variety of vehicle manufacturers to understand and assess the driver assist features included in market-available vehicles.

“One interesting observation is that drivers are often more interested in knowing how to switch off these additional driving features than they are in understanding how to use them, or how they can benefit from them” says Danielle Berry, a Network Operations Engineer at ARRB.

So, exactly what are these features and how can they assist you?

The following list summarises some of these features and outlines how you can benefit from them:

  • Adaptive Cruise Control (ACC):
    ACC works similarly to standard cruise control, however in addition to a set speed it can be conditioned to maintain a minimum following distance to a vehicle in front. This allows your vehicle to adjust to a safe travel speed behind a vehicle ahead of you (e.g. even when they slow down), or when a vehicle merges in front of you. Similarly, if the vehicle ahead of you accelerates, the ACC will automatically bring your vehicle back up to speed accordingly. This means that the frequency of actively applying your brakes is reduced, and the cruise function can be kept engaged for longer periods in variable traffic conditions.
  • It should be noted that the refinement of these vary with some being somewhat ‘harsh’ in their deployment.
  • Lane Keep Assist (LKA):
    The LKA function acts mainly as a supporting safety feature to your driving. With this, the vehicle will identify the lane markings and can perform small steering adjustments to help stay within the lane. This can allow the driver to relax their steering to a more supervisory role, still with their hands on the wheel and ready to take back control if needed. In some vehicles the LKA may allow a brief ‘hands-free’ period (typically less than 30 seconds).
  • Keeping the hands off will, in some, show a warning and then deactivate ACC, forcing the driver to engage with the wheel.
    By assisting in manoeuvring the vehicle and keeping it within the lane, driver fatigue levels can be reduced as the LKA will take on some of the mental load from the driving task.
  • Traffic Jam Assist (TJA):
    The TJA feature typically provides an ‘auto-pilot’ style function that combines the ACC and LKA features at low speeds (e.g. when stuck in a traffic jam). The TJA acts to control the speed and movement of your vehicle within the lane so you don’t have to apply small start-stop adjustments to both your speed and steering. This means that slow-speed accidents due to losing concentration or growing fatigued in traffic jams are less likely to occur. This is because the TJA system will be supporting the safe control of the vehicle.
  • Blind Spot Warning (BSW):
    The BSW is an alert function that can present itself through audio and/or visual means. This is most often included as a small light or light-up display on a vehicle’s side-view mirrors. It may also be accompanied by an in-vehicle alert tone. The BSW provides safety assistance by lighting up when another vehicle moves into your vehicle’s blind spots on the left or right hand sides. This helps to keep you aware of any surrounding vehicles. In some vehicles, this feature may include an in-vehicle, HD display of the blind spot area on the passenger side to further enhance your awareness of the driving environment. If you then attempt to make a lateral movement (i.e. indicating to merge across lanes) while the BSW has detected an object in your blind spot, an audible warning tone will sound in your car. This tone will bring your attention to the dangerous situation, allowing you to respond and avoid a collision.
  • Road Sign Information (RSI):
    The RSI feature is present in vehicles at two different levels. The first level is provided through data taken from mapped areas, where information on speed limit signs is stored and presented to the driver through the vehicle’s display, dependent on their detected driving location. The second level is more accurately a Road Sign Recognition function where the system is able to read, interpret and display to the driver the speed limit as the car encounters the information. This second level, unlike the first, works in situations where a temporary speed limit has been introduced (e.g. road works). However, in general both levels of the RSI function are useful in supporting you to remain within the correct speed limit, especially when driving in unfamiliar areas. In cases where you may have misread, not seen, or forgotten what speed limit was displayed by signage, the RSI system can provide this information in the vehicle, available to you at any moment.
  • Collision Warnings and Active Braking:
    In driving situations where a driver’s concentration or focus may have lapsed, or a vehicle ahead brakes harshly, collision warnings and active braking can work to avoid an accident. Collision mitigation assistance features, in the forms of warnings and/or automated braking, are being run-out in new vehicles to help support a driver’s response in these situations. The sensors on new vehicles can detect the movement of vehicles around you and provide both visual and audible warnings if they detect a potential collision and you have not initiated a response. In cases where you may have failed to notice such a situation, the vehicle may, in addition to the warnings, implement active braking on your behalf to help mitigate the potential accident, or reduce the collision impact. In some cases, these vehicles may also employ collision mitigation alerts to other vehicles approaching quickly from behind by, for example, flashing the brake lights to try and alert the other driver of their dangerous approach.

In understanding these features, it is important to note that while they are already giving us an insight into the future of autonomous vehicles, they are currently supporting aids for one’s driving and not a replacement for in operating a vehicle. While diverse, these features and the many others that exist (e.g. parking assist, and autonomous lane change), all serve the same purpose of making driving easier and to make our roads safer. These features can only do this if we embrace them, take some time to learn about them, and drive with them switched on.

MasterDrive takes cognisance of all the benefits associated with this technology but finds that in many instances, most drivers are not fully familiar with the operation of the technology and therefore much of its efficacy is wasted.  All drivers are therefore encouraged to learn their vehicles thoroughly but NEVER, NEVER to rely on them alone – drivers must remain in control.

SMEC professional scoops Technologist of the Year Award

SMEC professional scoops Technologist of the Year Award

Nov 7, 2018 | Awards, News |


SMEC South Africa’s Kresen Manicum has scooped the title of Technologist of the Year at the 2018 South African Institution of Civil Engineering (SAICE) Awards held in Cape Town recently.

Manicum received the award for his leadership qualities, sustained service to the profession and innovation and enterprise among other things.

In line with his commitment to the profession, Manicum has served in senior leadership roles in the South African Roads Federation (SARF) and SAICE and has implemented key strategic initiatives to the benefit of these organisations and the professionals they serve.

Vast experience in civil engineering

His vast experience in the civil engineering field has seen him design and manage a variety of projects in urban development, geometric design and transportation planning.

Manicum has been intrinsically involved in piloting and delivering numerous successful Expanded Public Works Programmes, asset management and programme management projects, including the R1.7 billion Sanitation Phase 3 project for eThekwini Municipality.

In addition to his project responsibilities, Kresen is SMEC South Africa’s Regional Manager for KwaZulu-Natal, serves as an Executive Director on the Board of SMEC South Africa, serves on the SMEC South Africa National Executive Committee and is the Chairman of the Board of Soillab.

An incredible journey

Commenting on his award Manicum says the 18 years spent at SMEC South Africa has been an incredible journey. “It has provided me with the opportunity to be mentored in both leadership and business by some incredible people namely, our COO Dr Tom Marshall and CEO, Kostas Rontiris.”

“I think the highlight of my career to date is the opportunity to work with and lead the KwaZulu-Natal region.  Our management team are an amazing group of people who are like family. I look forward to continuing my role on the National Executive Committee as this has allowed me to work with all the regions in our firm and has given me the opportunity to get to know staff across the country,” he concludes.


Stefanutti posts R125m H1 operating profit despite order book decline, strained market

Stefanutti posts R125m H1 operating profit despite order book decline, strained market

8th November 2018

By: Marleny Arnoldi
Creamer Media Online Writer


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JSE-listed construction company Stefanutti Stocks managed to generate an operating profit of R125-million in the six months ended August 31, despite a constrained construction market, which indicates a positive turnaround from the R451-million operating loss reported for the financial year ended February 28.

This was also higher than the adjusted operating profit of R110-million reported for the six months ended August 31, 2017, which excluded the acquisition-related impairment that constituted the loss.

Stefanutti reported headline earnings a share of 60.30c, compared with 41.41c reported in the prior comparable period, but declared no dividend.

CEO Willie Meyburgh said a particularly good performance from its United Arab Emirates (UAE) business had assisted the company to increase its headline earnings a share by 46% year-on-year.

He also pointed out in a statement published on Thursday that the South African construction market remained at a historic low in the reporting period, with a continued slowdown in construction activity and an aggressive contracting environment, which exacerbated pressure on operating profit margins.

To cope in a difficult trading environment – with the company’s order book having fallen to its lowest level since August 2016, at R12.8-billion, compared with the R14.3-billion order book as reported in May – Stefanutti has managed to maintain the order book beyond South Africa’s borders at 30%.


The company’s construction and mining contract revenue increased to R2.8-billion, from R2.4-billion in the prior year, with an improved operating profit of R111-million, compared with R92-million in the prior year, at a similar operating profit margin of 3.9.

“Within this business unit, the roads and earthworks, mining services and Swaziland divisions delivered good results, with the number of tender enquiries and awards received from the mining sector increasing, while limited infrastructure work has been secured from the public sector,” said Meyburgh.

The building business unit’s contract revenue declined to R1.7-billion, compared with R2.3-billion in the prior year, with a contraction in operating profit to R6-million, compared with R22-million in the prior year. This excludes a R38-million profit generated by the equity accounted UAE operation.

“In the building business, the Mozambique and coastal divisions continued to deliver positive results. However, delayed payments from government in the social housing sector continued to negatively affect the division’s working capital,” Meyburgh pointed out.

The mechanical and electrical business unit’s turnover and operating profit increased to R581-million and R8-million, compared with R541-million and R1-million, respectively, in the prior period. The ongoing shortage of work in the traditional petrochemicals market was negatively affecting the oil and gas division’s financial performance.

This had resulted in the electrical and instrumentation division being incorporated into the mechanical division.

While the construction sector remained depressed, Meyburgh highlighted that there were short-term opportunities in the local market, which pertained to surface mining related services, selected openpit mining contracts, urban developments, petrochemicals tank farms, smaller oil and gas projects, pipelines, water and sanitation treatment plants, as well as warehouses and some design and construct opportunities within the building sector.

Stefanutti will continue to prudently consider opportunities for road and bridge construction, bulk pipelines, marine and office and commercial building projects overseas


Bitumen supplier concerned about slowdown in road construction

Bitumen supplier concerned about slowdown in road construction

2nd November 2018

By: Irma Venter
Creamer Media Senior Deputy Editor


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The rapidly increasing bitumen price is less of a concern to bitumen suppliers than the recent slowdown in South African road construction, sayscivil engineering firm Colas South Africa commercial, communication and marketing manager Herman Groenewald.

Bitumen prices have increased by more than R2 000 a ton since March this year and could possibly increase again in November, he notes.

These price increases are linked to crude oil prices and the rand-dollar exchange rate – none of which have been favouring South Africa in recent months.

“The prices are not really a problem for bitumen suppliers, as we adjust our rates every month,” explains Groenewald.

“However, for local authorities with fixed budgets, it does become a problem as they can now do less work for the same budget.

Also, there are currently no problems with bitumen availability, as was the case a few years ago. In fact, most refineries have bitumen surpluses.

The low activity in the South Africa roads construction industry is, however, a problem for bitumen suppliers.

“Even worse, this trend is expected to continue into 2019 as there are very few new government road construction projects on the horizon.”

In an environment where few new roads are being built, one important focus is on the maintenance and care of the existing roads.

Groenewald says Colas’s MSP3 rejuvenator is one of its low cost solutions whereby the life of a road can be extended. MSP3 rejuvenator is an inverted emulsion of bitumen, solvent and selected heavy oils, specifically designed to rejuvenate aged bituminous surfaces.

It conforms to SANS 4001BT5:2014 requirements.

“The product is ideally suited to rejuvenating aged chip seals that are showing early signs of cracking and chip loss. The oil fraction of the MSP3 does not evaporate upon curing of the emulsion and permanently softens the aged binder in a surfacing operation.

“Experience has shown that small hairline cracks on roads can close up under traffic, after treatment with MSP3,” explains Groenewald.

A large proportion of the Namibian national road network has, through the years, been treated with MSP3 rejuvenator.

“Experience in Namibia has shown that roads with sufficient surface texture can be treated two to three times with MSP3 rejuvenator, before a reseal is required. The effective life span of the treatment is longer than three years,” says Groenewald.

Colas South Africa in September sprayed the runway of the Millvale Private Golf Estate, near Koster, in the North West. Other application sites include a number of airfields, such as Ysterplaat, Somersveld and Upington

SANRAL 2017/18 project roll-out stalled owing to Treasury regulations

SANRAL 2017/18 project roll-out stalled owing to Treasury regulations

2nd November 2018

By: Irma Venter
Creamer Media Senior Deputy Editor


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The South African National Roads Agency Limited (Sanral) has, in the past year, issued a total of 60 new contracts to the value of R4.9-billion for road construction, it states in its 2017/18 integrated report, presented to Parliament in October.

However, this was significantly lower than in the 2016/17 financial year, because of the technical interpretation of the new National Treasury procurement regulations, which delayed the issuing of new contracts.

“These issues have now been resolved and we have already awarded more than 50 new contracts since July,” says Sanral CEO Skhumbuzo Macozoma.

“Our tender decisions have an impact on the engineering and construction sectors and have wider implications for emerging enterprises, black-owned companies and start-ups that form part of the supply chains of larger engineering companies.”

Among the new contracts that were awarded in 2017/18 are the construction of a mega bridge across the Mtentu gorge.

It is one of two mega bridges that will form part of the N2 Wild Coast Highway.

Also included were a R115-million project to extend the road network and improve road safety near Kimberley, in the Northern Cape, as well as the improvement of three intersections near Olifantshoek and Kathu on the N14.

Projects completed during the year include the widening of the R24, near Rustenburg, the realignment of the N7 near Clanwilliam, in the Western Cape, and a R567-million project to improve the N4, in Mpumalanga.

Contracts to the value of more than R3-billion were awarded for road rehabilitation and maintenance projects, of which about 60% went to small, medium and micro black-owned businesses.

Sanral manages a 22 000 km road network.

The agency’s report indicates that revenue from non-toll operations – which comprise 87% of Sanral’s business – grew by 4% during the period under review, to R9-billion.

Non-toll is funded entirely by the fiscus through allocations from the Department of Transport.

Sanral’s revenue from conventional toll roads increased by 12.4% following a tariff adjustment in line with consumer price inflation and a 6.5% growth in traffic volumes.

Revenue from the Gauteng Freeway Improvement Project (GFIP), however, decreased by 4.83% year on year.

The GFIP has been facing a public revolt in the payment of electronic toll (e-toll) fees since it inception.

During the 2017/18 financial year, Sanral received R463.5-million from government as a GFIP grant, while a further R1.9-billion was transferred from the non-toll grant to address the shortfall resulting from low e-toll payments.

Macozoma says government’s commitment to the formulation of a comprehensive national policy on tolling will provide certainty about the future of toll roads and on the future funding model for the construction and maintenance of the national road network.