Creecy’s fuel storage plan in Durban hits a legal snag

Minister of Transport Barbara Creecy’s decision to award 25-year lease renewals to oil majors at Island View Precinct (IVP) in Durban has been hit with its first serious legal challenge.

Capricorn Petrochemicals, a BEE player in the petrochemical sector, has filed suit against the minister and 12 other respondents, seeking to set aside her decision to award 25-year leases to incumbents operating fuel storage facilities at IVP.

The precinct handles about 75% of SA’s petroleum imports and is of vital national importance, says the founding affidavit by Capricorn CEO Anda Bici.

Instead of putting the leases out to competitive tender, Creecy invoked Section 79 of the National Ports Authority Act, which allows her to bypass the normal licensing procedures in the national interest.

Bici takes issue with Creecy’s use of this legal mechanism to bypass the normal competitive bidding process required under the National Ports Act.

Creecy signed a directive on 28 August 2025, which, subject to certain conditions, awarded companies such as Bidvest Tank Terminal, Astron Energy, Vopak, Sapref, Sasol Oil, Engen Petroleum, and the state-owned Central Energy Fund (CEF) the rights to operate liquid bulk terminals at IVP.

The CEF was also granted the right to construct and operate a new mooring at the IVP for 25 years.

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All, except the CEF, are incumbent operators whose previous leases had expired and were subsequently renewed on a month-to-month basis.

Read: Trouble ahead for Creecy’s fuel storage plan in Durban
Dismay over Creecy’s decision to renew 25-year leases for oil majors in Durban

In response to criticism of her decision to award leases to incumbent operators, Creecy last year said this would ensure fuel supply security for South Africa, provide certainty to tenants, and encourage long-term investment in infrastructure.

Her decision is “manifestly unlawful and invalid” and irrational, says Bici’s affidavit. It does not advance SA’s strategic and economic interests, which is required to invoke Section 79 of the National Ports Act. Nor did it satisfy the act’s insistence on a fair, equitable, transparent and competitive process.

“[Creecy’s] directive falls short of the standard of reasonableness. Following a decade of inaction by the Transnet National Ports Authority (TNPA) and the minister in relation to the terminal operators at the IVP, the minister conducted a closed-door process that culminated in a direction to the TNPA to conclude 25-year agreements with the CEF and the incumbents,” says the Capricorn court filing.

The respondents in the case are the Ministers of Transport and Energy, TNPA and the incumbent operators. Capricorn, which says it is bringing the case in its own and the public interest, has asked for an expedited hearing.

The current leases at IVP trace their roots to transitional provisions under the National Ports Act, which recognised and preserved legacy arrangements between terminal operators and Transnet dating back to the 1950s and 1960s.

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Some incumbents have been at IVP for more than 50 years. Although most leases have expired, they continue to operate on a month-to-month basis.

In 2018, the TNPA announced that leases at the IVP would be advertised through an open tender process, which was supposed to commence that year. It was conceded at the time that these long-duration tenancies at the IVP had slowed transformation. However, TNPA said the incumbents could rebid for their leases, provided they met stringent transformation and job-creation requirements.

Creecy’s 2025 directive extending these leases for another 25 years was opaque and not made public, according to Capricorn, which addressed a letter of demand to the minister in December 2025, questioning the lawfulness of her decision and raising concerns about the need for the directive. No response was received to its demand to withdraw the directive, prompting it to raise funds to pursue its legal case.

There was no indication from the minister or TNPA as to why a competitive public process, as envisaged under the National Ports Act, was not followed.

Capricorn says neither it nor other similar parties were given an opportunity to make meaningful representations before publication of the directive, which was “conducted behind closed doors.” The directive process was procedurally unfair, unlawful, and therefore subject to review by the court. The directive has also been challenged as unreasonable, given the available lawful alternatives.

“Energy security and domestic refining capacity are essential to protect South Africa’s sovereignty and national security. Expanding refining capacity and increasing local access to the IVP for strategic and emergency stakeholding are crucial. I submit that a directive aimed principally at renewing long-term control over import terminal infrastructure, as opposed to materially reducing import dependence or securing sovereign refining and stakeholding capacity, cannot be characterised as necessary to advance South Africa’s national, strategic and economic interests,” deposes Bici.

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