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Eskom has signed heads of agreement with Zululand Energy Terminal (ZET) with the intention of becoming the 'foundation customer' for the liquefied natural gas (LNG) terminal that ZET intends building at Berth 207 in the South Dunes precinct of the Port of Richards Bay.

ZET is a joint venture between Vopak Terminal Durban and Transnet Pipelines, and was selected in 2024 as the preferred bidder to develop, construct and operate a new LNG terminal at the KwaZulu-Natal deepwater port. Vopak Terminal Durban is owned by Royal Vopak, of the Netherlands and the Reatile Group.

Eskom is proposing to build a 3 000 MW gas-to-power (GtP) project in the Richards Bay Industrial Development Zone, with re-gasified LNG to be the primary fuel source for a power plant that is expected to operate for 25 years with a mid-merit production profile.

At a signing ceremony in Pretoria attended by Electricity and Energy Minister Dr Kgosientsho Ramokgopa, ZET director Oliver Naidu said the agreement strengthened the commercial foundation for the project, which is poised to be South Africa's first LNG terminal.

The project was in the early front-end engineering design phase and Naidu said the intention was to develop the terminal in two phases, with the first phase involving a 170 000 m3 floating storage unit and an onshore regasification plant with a yearly capacity of about 3-million tons.

This capacity would be increased to over 4-million tons under the second phase that will include an onshore LNG tank and additional regasification capacity.

The project includes a transfer hub within the industrial zone to supply both GtP and industrial consumers, and will also connect to the existing Lily pipeline between Secunda and Durban so as to extend supply to other industrial customers.

"As we move forward our focus is clear: to progress the project responsibly, meet all regulatory and environmental requirements, complete the technical and commercial work required for a final investment decision, and deliver infrastructure that supports South Africa's future gas market," Naidu said.

Eskom CEO Dan Marokane added that the agreement established the framework for a long-term strategic partnership to support South Africa's GtP ambitions, which he said was needed to complement a higher penetration of variable renewable electricity.

"The availability of dispatchable power is at the very heart of the energy transition and industry cannot operate without it as it forms the backbone for renewable energy integration into the grid."

The current edition of South Africa's Integrated Resource Plan calls for 6 000 MW of GtP by 2030, with 3 000 MW to be procured under a gas independent power producer (IPP) procurement programme and 3 000 MW to be delivered by Eskom.

The deadline is seen as ambitious, partly because there is no infrastructure yet in place to facilitate the importation of LNG, while gas from Mozambique is set to drop materially from 2028.

Eskom indicated that it planned to begin producing electricity from the Richards Bay plant from 2031, with Marokane highlighting the need to order long-lead items, such as turbines.

The turbine market is currently overheated, largely owing to strong demand in the US where GtP plants are being built to support rapid data-centre growth.

The public procurement of GtP from IPPs has also faced delays, but the IPP Office confirmed recently that four entities had submitted GtP bids by the May 29 deadline, including: the 440 MW Khanyazwe Flexpower project, in Mpumalanga; the 990 MW Pictor GtP project, in KwaZulu-Natal; the 600 MW Kelvin Redevelopment project, in Gauteng; and the 800 MW Komatipoort Power, in Mpumalanga.

The IPPs pursuing the projects have all indicated that they will be based on imported LNG and the IPP Office expects to announce preferred bidders in August, after which the projects will have more than a year to advance to financial close ahead of a 36-month construction phase.

PRIVATE SECTOR PARTICIPATION

Marokane sa...

With municipal debt to Eskom now exceeding R114-billion, government and Eskom are turning to Distribution Agency Agreements (DAAs) as a potential solution. Engineering News editor Terence Creamer discusses the rise of DAA's, as well as their potential risks and rewards.

The business formations that have formally offered to extend the Government-Business Partnership model – hitherto used to tackle national crises such as loadshedding – to the City of Johannesburg have acknowledged the "sensitive" timing of the proposal in light of upcoming local government elections.

Nevertheless, they argue that the scale of the crisis has meant that the decision, which was first mooted in September last year, could not be placed on hold pending the electoral cycle. In addition, they stress that the offer is "not partisan", as it has been addressed to all political parties.

In a joint statement, Business Unity South Africa, Business Leadership South Africa and the Business for South Africa steering committee indicated that they were prepared to deploy private sector resources into a structured programme to support Johannesburg's recovery.

The offer was conditional, however, on having a "counterparty capable of governing scrupulously, delivering for the city, and being held to account".

Asked by Engineering News what such a 'counterparty' would involve in practice, the organisations pointed to their experience with the national partnership, which they said had worked because it operated under the direct auspices and championship of President Cyril Ramaphosa, with committed counterparties who were decision makers.

"That is what we mean by a counterparty: not a nominal point of contact, but accountable leadership with the authority to act, agree a programme, and be held responsible for delivery. That is the precondition for effective partnership at the city level too."

No formal meetings had been held with the current council or Executive Mayor Dada Morero in relation to the proposal, but it was confirmed that some business leaders had engaged informally with many decision makers over time on the potential for private sector support.

"[But] today's statement represents the first formal, public articulation of what business is prepared to do — and under what conditions."

The urgency of the intervention was attributed to the scale of the crisis and the importance of the city, which was in visible decline, with capital expenditure having collapsed to 6% of the city's budget, and maintenance spending standing at 0.5% of asset value. Meanwhile, rates and service charges had increased by 124% in real terms over the past fifteen years, while service quality had deteriorated.

"Johannesburg accounts for approximately 16% of national GDP — some analyses put it closer to 18% — and the Auditor-General has formally registered doubt about the City's ability to continue as a going concern. The Minister of Finance has placed the City on notice. Eskom has indicated it may suspend supply over unpaid debt. This is not a problem that can sit on hold pending an electoral cycle."

The crisis had been worsened by corruption, criminality and maladministration, with the Auditor-General estimating annual losses of about R12-billion through unauthorised and irregular expenditure.

NOT PARTISAN

The business formations also stressed that it was not a partisan intervention, insisting that "this is not about which party governs Johannesburg, it is about how the city is governed".

"We have addressed this statement to all political parties, the current administration, the President, and the government of national unity. We believe that framing accountability publicly, ahead of the elections, is itself part of the solution as it gives voters and civil society a basis on which to assess commitments made by parties contesting the elections, and it signals to all parties that business is serious about holding governance to account, whoever wins."

No fixed timeframe for implementing the partnership had been set, however.

"[Our] readiness to engage is not conditional on the election outcome or a particular calendar date. If the right governance conditions exist in a month, we'll begin then. If it takes a year, we'll begin then. What we won't do is c...

Hino South Africa (SA) is introducing a limited number of diesel-electric hybrid models in its 300 Series range to the local market, says Hino SA VP Anton Falck.

"We are initially importing 32 units, with eight of them already in the country.

"These first eight will be operated by Namlog for their transport contract at the Toyota Africa Parts Centre in Ekurhuleni," he adds.

"Three of these trucks are in service already and a further five will be added shortly. The remaining 24 hybrids will be distributed to major fleet operators."

All of the hybrid trucks will operate on Toyota's international Kinto subscription scheme, which means that one inclusive payment a month will cover the subscription, service and maintenance fees.

Insurance cover is provided by Kinto Protect. This is optional for fleet operators, but mandatory for private individuals.

Falck says he welcomes the arrival of the fuel-saving Hino hybrids at a time of significant diesel price increases owing to the conflict in the Middle East.

The Hino 300 hybrids have recorded fuel savings of between 15% and 30%, depending on the type of operation, with the added benefit of a minimised carbon footprint.

Falck says Hino SA will this month also start testing a prototype dual-fuel truck that runs on diesel and hydrogen.

Hino Aims for 3 000-unit Sales Hino SA sold a total of 3 178 trucks in the domestic market last year, giving the local arm of the Japanese truck maker a 10.2% share in the truck market.

This is slightly down on the 3 343 units sold in 2024, at a 10.8% share of the market.

This year promises much the same results as last year, with Hino recording total sales of 930 units in the first four months of 2026, with the company confident of again exceeding the 3 000-unit mark for the year.

Hino Motors, Japan, in April merged with another Japanese truck maker, Mitsubishi Fuso, into a new company, Archion.

Despite this global development, Fuso in South Africa will remain part of Daimler Truck Southern Africa, with no changes to local operations, dealer networks or aftersales support for either Hino or Fuso.

"Sales by Hino and the other Japanese truck manufacturers are showing more resilience than their European counterparts in a global automotive industry that is in greater turmoil now than ever in its 150-year history," notes Falck.

Uncertainty about the future, changing legislation, tariff barriers, as well as rapidly rising energy prices are among the challenges that vehicle manufacturers face in these tough economic times, he notes.

As South Africa is integrated into global supply chains, it means that the country is also affected by the global unrest.

"Here, in South Africa, we have a well-established vehicle manufacturing sector which supports many component makers and employs a substantial workforce.

"However, they now face a changing situation where increasing numbers of vehicles are arriving at South African ports as built-up imports. This is another gamechanger that we, the local manufacturers, must face."

Hino trucks are assembled at a semi-knockdown facility at Toyota's Durban plant. Hino is a Toyota group company.

Falck adds that Hino SA is "very proud" of its performance in the local Datatrack quarterly customer care survey of 13 truck brands.

"We were again in first position in the first quarter of 2026 combined ranking for sales, service and parts with a total of 99.69, which is well above the national average of 95.76."

This is the twelfth consecutive quarter that Hino has occupied the number one spot.

This result comes despite a glitch in the supply of some parts.

"In partnership with Hino Motors in Japan, Hino SA made the strategic decision earlier this year to transition our parts supply directly from Japan to South Africa, moving away from the previous supply route through Hino Motors Europe," explains Falck.

"As with any major transformation project, we experienced unforeseen operational challenges during implementation.

"Unfortunately, these ...

The National Treasury has issued termination letters to 13 municipalities and is preparing to issue similar notices to 14 others in relation to their continued participation in a scheme set up in 2023 to address rising arrear debt to Eskom.

Under the so-called Municipal Debt Relief Programme, municipalities that owed the State-owned utility a collective R58.5-billion as of March 2023 became eligible to have their historical debt written off over three years, with a maximum of one-third being cancelled in each year.

To do so, however, they had to consistently meet various conditions, the most important being that of ensuring that their current accounts with Eskom were kept up to date.

Some 71 municipalities were eventually approved for participation by the National Treasury, which meant that a total of R55.3-billion in debt could theoretically be expunged.

In a presentation to a joint meeting of the portfolio committees on Electricity and Energy and Cooperative Governance and Traditional Affairs, the National Treasury's Sadesh Ramjathan reported a compliance level of only 66% and that arrear debt owing to Eskom had risen to over R111-billion by the end of March this year.

It was also confirmed that the debt backlog currently stood at over R114-billion.

Ramjathan said that, while nonperforming municipalities should be contractually removed, the National Treasury had given the first 13 letter recipients the option to enter into five-year Distrisubution Agency Agreements (DAAs) with Eskom instead. An option that would also be extended to the subsequent 14 municipalities.

Under the DAA's, the electricity business is fully ring-fenced, with billing and revenue collection conducted by Eskom on a temporary basis.

The intervention has already been implemented with mixed success in three cases, including in Maluti-a-Phofung and Emfuleni following court rulings, and in Merafong where implementation is being legally contested.

LEGALLY FRAUGHT

The DAAs are both controversial and legally fraught, because electricity reticulation is constitutionally mandated as a municipal function.

In addition, a DAA can be implemented legally only after a council resolution and if a council follows the processes outlined in Section 78 of the Municipal Systems Act.

These processes include a detailed internal assessment that takes account of the costs and benefits, as well as other impacts on a municipality.

Eskom acting group executive for distribution Agnes Mlambo told the joint meeting that ten of the 13 municipalities in receipt of National Treasury termination letters had signed council resolutions.

Two other municipalities, the National Treasury confirmed, would be exited from the programme, while one had raised a dispute that required further investigation.

Those municipalities with council resolutions were now required to complete Section 78 processes by September and enter into a DAA with Eskom so as to remain within the Municipal Debt Relief Programme.

Ramjathan confirmed that Eskom was the National Treasury's "preferred agent" to perform the function, as appointing an organ of State was simpler from a public procurement perspective and because doing so meant they could potentially still receive a debt-write off from the utility.

Those municipalities that opt-out, meanwhile, could immediately be subjected to Eskom credit control and debt management processes, which could include Eskom resuming legal proceedings to attach municipal bank accounts.

NO 'SILVER BULLET'

Electricity and Energy Minister Dr Kgosientsho Ramokgopa stressed that government did not view DAAs as a "silver bullet" to the arrear debt problem but as a practical instrument to begin addressing a crisis that posed an existential threat to Eskom's financial sustainability.

He also cautioned that it would take time to bear fruit. This was confirmed by Eskom, which indicated that while there had been relatively rapid collection progress in Emfuleni, where there were large industrial f...

Independent railways operator Traxtion has concluded an $86-million (R1.4-billion) equity capital raise, which the company says has created the financial platform for yet further investments into a South African market that is beginning to open up to competition.

The transaction involves STANLIB Infrastructure Investments and Standard Bank, which have acquired an undisclosed minority position in Traxtion, as well as Harith's InfraCo and PAIDF2 funds, consolidating Harith's long-standing shareholding in the company.

CEO James Holley tells Engineering News that the injection of fresh equity is a vote of confidence both in Traxtion's strategy and the reforms under way in South Africa's rail sector.

Following the vertical separation of Transnet Freight Rail and the launch of the Transnet Rail Infrastructure Manager, or TRIM, 11 private train operating companies (TOCs) have received slot allocations and are preparing to begin operating on a network hitherto monopolised by the State-owned freight logistics group.

Traxtion did not seek an allocation under Version 3 of TRIM's Network Statement, which guides the slot allocations and pricing, but will consider seeking allocations should the upcoming Version 4 address the risks that it perceived as undermining the bankability of TOCs under the earlier statement.

Holley says the transaction, which was facilitated by Pallidus Capital, closes the equity required for Traxtion's previously announced R3.4-billion rolling stock investment programme, and secures a further pool of capital for future investments.

"We previously said Traxtion was preparing to unlock significantly more investment into the sector; the backing of South Africa's largest financial institutions sets us up perfectly to deliver that," Holley adds.

Traxtion's current R3.4-billion rolling-stock investment includes the acquisition and refurbishment of 46 second-hand locomotives for R1.8-billion, and the purchase of 920 wagons for R1.6-billion.

The locomotives, which are being bought from KiwiRail in New Zealand, will be upgraded and refurbished at Traxtion's workshop complex in Rosslyn, in Gauteng, and the company is in advanced discussions with domestic manufacturers to supply it with wagons.

Holley says about 60% of its total spend on the refurbishment programme will be with South African suppliers, and notes that over the 20-year lifecycle of the assets Traxtion is likely to spend twice the initial budget in South Africa to maintain the fleet.

The locomotives will be delivered in four separate batches, with the first eight locomotives to arrive in Durban in August, and with the first refurbished locomotive scheduled to enter service in March 2027. Thereafter, Traxtion aims to release one refurbished locomotive every week thereafter from its Rosslyn facility until all 46 are operational.

Holley reports strong demand from TOCs to lease Traxtion's rolling stock, and confirms that it is keeping its options open with regards to applying for slot allocations should Network Statement Version 4 address its concerns. These relate to the introduction of service level commitments from the TRIM, the introduction of reciprocal and balanced penalties and legal protections, as well as the recognition of lender rights.

"For now we are looking to support the train operating companies in various ways. In some instances we're providing them with full maintenance leases, and in other instances we're looking to provide them with full maintenance leases, together with train operating crews. The only issue on which we are inflexible, of course, is regarding the maintenance of our train sets," Holley says, noting that Traxtion has built its business on extending the operational life of rail assets through refurbishments and maintenance.

The company has been active in the railways sector in other parts of Africa for 38 years, and currently has operations in ten countries. It has a 55-strong locomotive fleet outside of South Africa and a combina...

The EU, which announced a €12-billion investment package for South Africa in October, is undertaking investment roadshows in Johannesburg, Cape Town and Durban this week as part of efforts to convert the high-profile investment pledge into firm projects.

The EU and South Africa signed the Clean Trade and Investment Partnership (CTIP) in November last year, alongside a memorandum of understanding on sustainable minerals and metal value chains.

The CTIP is aligned with the bloc's Global Gateway strategy to mobilise investment for infrastructure and selected industries in developing regions, as well as the EU's €8.7-billion support for South Africa's Just Energy Transition.

The EU is also supporting the roll-out of digital infrastructure and the building of a South African pharmaceuticals value-chain through the Global Gateway strategy.

The CTIP with South Africa focuses primarily on clean industry and energy sectors, including: renewable energy and low-carbon technologies; electricity transmission infrastructure; clean fuels, including sustainable transport fuels; raw materials and mineral value chains; as well as climate mitigation an adaptation technologies.

The roadshow kicked off at the JSE in Johannesburg on June 1 and 2, with Trade, Industry and Competition Minister Parks Tau and EU Ambassador to South Africa Sandra Kramer both expressing optimism that investors would be able to conclude partnerships that could result in concrete projects.

Roadshows were scheduled for Cape Town on June 3 and 4, as well as Durban on June 5.

In his address, Tau said the CTIP arose from a joint recognition that trade between South Africa and the EU was not enough and that higher levels of investment were also needed.

"The Global Gateway Investment Package gives us the capital framework. This roadshow gives us the project pipeline," Tau said.

He added that South Africa and Europe had an opportunity to jointly develop new industries, many of which were being underpinned by decarbonisation objectives, and strengthen value chains, particularly in the area of critical minerals.

"Our objective is not to export raw materials. Our objective is beneficiation, processing and industrial development on South African soil," the Minister said, while highlighting South Africa's endowments of platinum group metals, manganese, vanadium and other strategic minerals.

Kramer said that the events in the three cities would bring together development finance institutions, other investors and European and South African companies to promote specific project opportunities in South Africa.

She reported that 200 companies would participate, alongside ten financial institutions.

The investment prospects were not identified, but closed sessions had been scheduled across all three events to allow for these to be pitched.

"It's not just talking shop," the ambassador insisted.

"We are bringing the investors to businesses across the country [and] we are demonstrating how our investment tools can concretely result in investments in priority projects that ensure scale and impact," she said.

The roadshows follow on for the inaugural EU-South Africa Energy Dialogue and Business Forum, which took place in Brussels in May, and will be followed by the first EU-South Africa government-to-government engagements on CTIP in early July.

The South African Bureau of Standards (SABS) says it has accepted the findings of a much-delayed forensic investigation confirming many of the serious governance, procurement, labour and information-technology problems initially flagged by whistleblowers in 2024.

Trade, Industry and Competition Minister Parks Tau appointed TSU Investigation Services to conduct a forensic probe into the allegations, which began in February 2025, and subsequently suspended COO Lungelo Ntobongwana and chief corporate services officer Lizo Makele in July 2025.

TSU was initially expected to finalise its investigation by May last year, but it was confirmed during a presentation to the Portfolio Committee on Trade, Industry and Competition on Friday that the final set of ten reports had been presented to the SABS board only on March 18 this year.

The investigation, it emerged, had been hampered by difficulties in accessing key information, compromised by a serious cyberattack on SABS in November 2024.

This not only disrupted the operations at the public entity, which maintains over 7 600 national standards and operates 28 testing laboratories, but also meant that the TSU eventually had to "image" 24 individual computers to secure the information it required to complete the investigation.

SABS chairperson Professor Bismark Tyobeka confirmed that the board and executive management had accepted the findings and had initiated a range of interventions to remedy the problems, including disciplinary proceedings.

The forensic report itself was not shared with the committee, but Acting CEO Blake Mosley-Lefatola provided an overview of its findings, which confirmed that there had been serious breaches of governance, recruitment and procurement processes.

These included evidence of irregular and wasteful expenditure, improper conduct by employees, the nonprocedural appointment of an executive to the role of acting CEO, undeclared conflicts of interest, duplicate payments of board fees, the appointment of an executive that failed to meet the minimum requirements for the post, a case of work experience being misrepresented during a recruitment process, inaccurate payroll capturing, the misuse of fixed-term contracts, the appointment of four new labs in a manner that breached government's procurement legislation, and fruitless and wasteful expenditure in relation to a R24-million Building Management System contract.

Mosley-Lefatola said that 14 recommendations arising from the report had been implemented and another nine, including disciplinary hearings, were ongoing. He told the committee that the intention was to finalise the disciplinary hearings by the end of July.

Quarterly progress reports on the actions being taken to implement the recommendations would also be provided to the Minister and the department, which Deputy Minister Alexandra Abraham said could be shared with lawmakers at their request.

ONGOING ALLEGATIONS

DA spokesperson on trade, industry and competition Toby Chance welcomed the report but reported that he continued to receive worrying allegations of mismanagement at SABS, as well as attempts to intimidate or muzzle whistleblowers.

Tyobeka said that he, too, continued to receive allegations of wrongdoing against the current board and executive but urged recipients of such messages to be "judicious" in their treatment of these new accusations.

The organisation had been in deep distress in recent years and also "at war with itself" This, Tyobeka said, had resulted in emergence of employee "factions", including those who opposed the actions being taken currently.

A whistleblowing channel, which was independent from management, was now in place, alongside a clear policy on how such complaints should be managed.

Tyobeka warned, however, that those employees who were found to be making false allegations could face disciplinary action. "Ultimately we need to separate fact from fiction," he added.

Mosley-Lefatola said the TSU process had enabled SAB...

Engineering News editor Terence Creamer discusses some of the issues the National Energy Regulator of South Africa will need to consider in relation to an application by Eskom to extend a 62c/kWh tariff to two struggling ferrochrome producers.

Eskom has started construction of a 75 MW solar PV project alongside its Lethabo coal-fired power station in the Free State, which is expected to generate some 147 GWh yearly once at full production.

The State-owned company said in a statement that the R1.2-billion project formed part of a "construction-ready pipeline" of at least 2 GW of renewable energy and pumped storage projects to be progressed during 2026.

"Funding for these projects has been provisioned within Eskom's approved capital expenditure programme and will be financed through on-balance sheet funding, in line with National Treasury debt relief conditions, without reliance on additional project finance borrowing," Eskom said in a statement.

The State-owned utility is trading under a R232-billion debt-relief package extended to it by the National Treasury, the terms of which have hitherto restricted Eskom from undertaking new generation projects.

Eskom group executive for renewables Rivoningo Mnisi also described the sod turning as a significant milestone for Eskom Green, which is being set up as a standalone Eskom subsidiary to diversify the group's generation mix away from coal and support South Africa's Just Energy Transition.

Another 17 high-priority projects had been identified for implementation across Eskom's existing coal-fired power station footprint, with construction expected to commence between now and 2028.

The projects, Eskom said, were expected to deliver approximately 6 GW of new capacity by 2030 and could be located at Arnot, Duvha, Majuba, Tutuka, Komati, Kendal, Kusile, Hendrina, Camden and Grootvlei.

"By leveraging existing power station infrastructure, this [Lethabo] project demonstrates the practical integration of renewable-energy technology within our existing coal-fired power station fleet infrastructure and signals Eskom's continued commitment to strengthening security of supply while transitioning toward a lower-carbon future," Mnisi said.

However, Eskom Green also planned to expand into new geographic and technological opportunities and planned to pursue partnerships, co-development opportunities and strategic acquisitions.

The proposed funding framework, Eskom said, would ensure limited recourse to its balance sheet using project finance principles for the renewable-energy projects through dedicated project special purpose vehicles.

"This will lead to the advancement of Eskom's pipeline of more than 32 GW of cost-competitive renewable-energy and storage projects by 2040 to diversify its energy mix as part of the emissions reduction strategy and enable customers to decarbonise over the life of their operations."

Eskom had not partnered on the Lethabo project, however, and it did not immediately respond to questions about whether the project had secured a budget quote for the grid capacity it would use.

In light of South Africa's current grid constraints concern has been raised about the prospect of grid capacity linked to existing power stations being immediately transferred to Eskom for its own renewables projects.

Critics have suggested that this could amount to anti-competitive behaviour, and could run counter to Eskom and the National Transmission Company South Africa's commitment to fair, transparent, and open grid access.

During a recent presentation, Eskom Green GM for business development Khutso Sekgota said the entity welcomed the shift to a rules-based competitive electricity supply industry and insisted that it would receive no preferential treatment in relation to compliance with grid access rules, market codes and competition laws.