Metro removes occupants from condemned building
The Tshwane metro, led by Mayor Dr Nasiphi Moya, recently evicted occupants of a Pretoria West building marked for demolition.
In March, the metro obtained a court order to demolish illegally constructed buildings on Stand 1313 and Stand 1312, located at 510 and 514 Luttig Street, Pretoria West.
The Pretoria High Court received an appeal from George Asaba and GABSA Consolidated Prop (Pty) Ltd to stop the order from being carried out, but the appeal was struck off the roll in the High Court on April 3.
The structures built violated the National Building Regulations and Building Standards.
While conducting a Tshwane Ya Tima drive in parts of the CBD and Pretoria West, the mayor stopped by the condemned property to remove any occupants or property still left at the site.
They stopped the Tshwane Ya Tima operation temporarily to support the officers enforcing the court order.
'Something good happened in our pursuit of law and order in our city. We have obtained a court order that has allowed us to demolish the structure. Both of these yards have erected all of this illegally. There are no approved plans, so we approached the court and the court granted us the order,' Moya said.
Moya said the city has been fighting for three years in court while owners kept expanding their building, and described the order being granted as a victory for Tshwane.
'These private people who erect these [buildings] and rent them out don't want to take the responsibility for those people who then rent from them. It's quite sad to see such because it shows people want to put money over people's rights,' she said.
'We have removed the people who are staying here because, more than anything, these buildings are not safe.
We can say we're not going to evict people, but what if something happens to them? We've seen these cases in Tshwane, and we've seen them in Joburg.
She said they were going to demolish the structure.
'When you look at it, you can see no thought went into the fact that this is a space that should be suitable for human beings. The toilets are connected to the kitchen and all sorts of things.
Moya said there was going to be law and order in Tshwane and that they are going to target 'these buildings with no control or order'.
'Pretoria West is notorious for these,' Moya said.
The Tshwane metro has also impounded several vehicles that were found inside this yard.
'The landlords of these illegal buildings take advantage of the fact that the people who are desperate for housing are usually foreigners, a factor found to be at play in this instance,' said the mayor.
Other stops during the Ya Tima drive included the Bothongo Plaza, which was the second switch-off operation done at that location. The owners have defaulted and owe the city more than R1.17-million.
A building on Francis Baard Street in the CBD was shut off after owing R466 956. This building leases space to various businesses, including a government department.
The third property was in Sunnyside, which owes the city R3-million.
The fourth stop was in Pretoria West at the Ebbul Foods factory, which owes R445 382.
Tshwane Ya Tima also disconnected Daimler Trucks and Buses Southern Africa. The company owes R608 313.
The final stop was at Delta Prop Fund, which made good on its promise to immediately pay its outstanding debt of R492 211.
Residents and businesses are urged to settle their municipal accounts as soon as possible to avoid disconnection.
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'This particular blend, it was supposed to be a gamechanger,' PetroSA's former head of trading Vusi Xaba, who oversaw the deal, recently told us. Octane-boosters are an everyday part of the fuel business: until it was banned, lead was used to boost the octane of fuel. It has since been replaced by compounds such as benzene and ethanol, but recently other chemical additives have been creeping into fuel as well. Tests would later confirm that Nako's chemical of choice was N-methylaniline (NMA), which is banned as a fuel additive in Europe, China and Russia because of concerns about its toxicity and the damage it can cause to engines. Where NMA is used, it's normally in concentrations of below 1.2%. At 3% NMA can boost the octane rating of fuel by up to 8 points, but at such high levels NMA causes other issues, including gum that leaves deposits on engines and causes seals to swell, increasing the chance of oil leaks. According to an internal PetroSA investigation, tests later found that Nako's fuel contained 6.6% NMA. It's unclear how much the PetroSA trading team knew when they placed the order. They evidently knew enough to tell the board, in June 2023, that Nako's fuel had a 'pre-blend' octane rating 'of 89-91', making it a very low-quality fuel that would be boosted to a 95 'using low-cost approved components'. Ngwenya told us that PetroSA had sent a technical team to view its suppliers' blending facility in the UAE: 'From January until about May, this was the back and forth, testing and verifying, 'Is this sanctioned product, who are your suppliers?' … eventually they were satisfied.' But Xaba was coy about whether PetroSA knew the fuel contained NMA: 'Let's put it this way, when a trader trades gasoline, they would say this has got intellectual property, so they wouldn't actually be telling you … what components they bring and at what ratio — they would not necessarily share that with you.' R150m prepayment In July 2023, Nako's first shipment of unleaded petrol arrived in Mossel Bay, but for the next three months the oil tanker Sea Adore just sat waiting to discharge. Part of the problem was that Nako — a brand-new company with no track record — did not qualify for credit and so had to pay its supplier upfront. According to the internal PetroSA investigation, which was concluded in February this year, the contract was then amended to give Nako a R150-million prepayment. Public finance rules don't allow state-owned entities to make prepayments, except in exceptional circumstances, so another amendment was drafted in August 2023 to turn the R150-million prepayment into a payment for a small portion of the fuel that would be discharged first. 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It's debatable whether NMA, which can damage both paintwork and engines, clears this bar, but because there is no threshold for NMA, the standard tests won't look for it. Even a fuel pumped full of NMA can therefore still pass the tests with flying colours. PetroSA's internal investigation would later conclude that more comprehensive testing should have taken place, given that the fuel was a new product. 'At the time of the arrival of the Sea Adore (first cargo), there was insufficient communication to all relevant stakeholders to highlight that the ULP 95 purchased was not tested and was a blended product,' the report concluded. And because there was no disclosure about the chemicals in the fuel, 'the standard testing methodology was exercised which did not initially always include potential gum, mainly because ULP 95 previously had low existent and potential gum'. It was only after customers complained that 'a series of tests were conducted on the samples of all 3 vessels', the report noted. The results The rest of the industry, meanwhile, wasn't waiting for PetroSA to fess up to the problem. In March, Engen had reached out to the Fuels Industry Association of South Africa (FIASA) about 'potential contamination issues' with petrol in the Mossel Bay area. 'The query was forwarded to Shell who confirmed same and confirmed that they had contacted Astron to analyse the product. FIASA then contacted Sasol who expressed a willingness to assist,' spokesperson Phila Mzamo explained. Soon, samples had been collected and sent to Sasol and Astron's labs for testing. This had enraged Ngwenya, Nako's founder: 'Nako has had its samples handed over to the industry without proper consultation or adherence to established policies and procedures. This allowed the majors to conduct analyses on our product and request information that seriously infringes on our intellectual property,' he later wrote in a letter to the Department of Mineral and Petroleum Resources. On 5 April 2024, FIASA convened a meeting of all the big players: Engen, Shell, BP, Total, Astron, Sasol, Puma and a reluctant PetroSA. The tests, run by Sasol and Astron, had found NMA at a concentration of 6.6%, according to the investigation report. 'This would indicate (in alignment with Astron thinking), that the base octane without N-methylaniline addition is very low,' the report added. Neither Sasol nor Astron would speak to amaBhungane, but FIASA confirmed the findings: '[B]oth Sasol and Astron Energy analysed the product and found in excess of 6% NMA,' Mzamo told us. She added: 'The NMA recommended rate is only around 1.2% — it is known above this level that gum formation is accelerated, and furthermore compatibility with other materials is brought into question.' The tests run by Sasol had also found 'extremely high gum content', putting the fuel out of specification with SANS standards. PetroSA's own tests found high levels of gum, but not high enough to flunk the tests. According to FIASA, PetroSA asked the two labs to run the tests again on a new sample of Nako's fuel. 'Samples were sent to Astron and Sasol — Astron analysed these and found similar results. The Sasol sample never arrived since it was recalled by PetroSA,' Mzamo said. In a follow-up response, however, Mzamo told us that PetroSA's actions had been more aggressive: 'At a subsequent meeting PetroSA confirmed that the Sasol sample had been intercepted — recalled is too polite — and requested Astron to destroy their samples.' We asked PetroSA why it asked Astron to destroy the samples considering that this was potential evidence of what was causing the problems, but this was one of the questions they chose to ignore. Astron, having spoken to its lawyers, advised PetroSA that the samples 'would not be destroyed', Mzamo said. Public denials A week after the tense meeting with the oil majors, the Sunday Times reported that garages had been instructed to 'immediately lock out all VP95 nozzles' and stop selling the fuel. Publicly though, PetroSA was conceding nothing. When PetroSA's chief operations officer Sesakho Magadla was interviewed on SABC later that day, she stuck to the line that Nako's fuel had passed the SANS tests. '[A]s PetroSA, we would like to assure the motorists as well as the industry at large that the product we sell is compliant to the product specification of this country, which is SANS 1598,' she said, without mentioning the high levels of NMA in the fuel. '[T]here has been no concerns with regards to the quality itself in terms of the product but what we've seen is … a general concern on the staining.' This wasn't even close to true. Concerns had been raised — loudly — not just about staining but about potential engine damage and the toxicity of the chemical. NMA is classified as toxic if it is swallowed, inhaled or comes into contact with skin. Shell in particular had raised concerns about 'the toxicity and the amount used' as well as 'the threat towards groundwater', the investigation team later reported. At the time, Magadla said PetroSA would investigate but was sceptical that the problem could be laid at its door: 'Even though we know that we are selling a product that is compliant to the specification we have embarked … on an independent investigation … from the preliminary investigation there is no conclusive evidence that indicates that this concern that is raised by motorists could be isolated to the product that is sold by PetroSA,' she told SABC. Neither innocent nor independent For Ngwenya, Nako's founder, the questions about the quality of Nako's fuel weren't as innocent or as independent as they seemed. '[T]he majors have used product quality as a weapon to undermine Nako's operations,' he told the department's director-general Jacob Mbele in an August 2024 letter. 'Our products have been subjected to numerous tests, often leading to demands that Nako and [our supplier] disclose our blending formulas and mix ratios for producing ULP 95.' Nako, he added, had 'resisted these demands to protect our intellectual property'. The 17-page letter to Mbele failed to mention the high levels of NMA found in the tests. Instead, Ngwenya took aim at the 'monopolistic practices' of the oil majors. 'Every vessel we have imported has been met with what can only be described as war-like tactics,' he wrote. This view was echoed by others in PetroSA. When Magadla was interviewed by SABC in April when the questions over Nako's fuel first surfaced, she said: '[I]t's quite interesting that with these concerns, there has also been interesting competition tactics being deployed by our competitors … so it is not only the technical issues that we need to investigate, it is also the competition behaviour by our competitors.' At the heart of the problem, she and others believed, was PetroSA's decision to take back the supply of unleaded petrol to Mossel Bay. 'When this issue of self-supply was changed, it was not liked by the majors. They hated it, they hated the whole notion,' former head of trading Vusi Xaba told us. PetroSA did not want to respond to the 78 questions we sent them, but Xaba told us that in his view, Nako's fuel passed the SANS tests, so what was the problem? This didn't matter though: the industry was no longer willing to buy it. Cargo #3 The question now was what to do with Nako's third cargo of unleaded petrol? The Daytona had been moored off the coast of Mossel Bay since 1 March 2024, quietly running up a demurrage bill of an estimated $50,000 (R900,000) a day. (This is unusually high for demurrage which normally costs $35,000 or R650,000 a day.) By mid-June 2024, the demurrage bill on the Daytona had reached R99-million, according to an internal document. Technically the fuel had passed the SANS tests, which meant that PetroSA might be legally obliged to accept it. Faced with a difficult decision, PetroSA agreed to take another 50 million litres of unleaded petrol from Nako at a cost of R634-million. Leverage It's at this point that our two 'Dirty Fuels' investigations come together. If you've read Part 1, you'll know that PetroSA had been trying to sell a cargo of diesel that had initially been intended for Eskom. On 10 June 2024, it had agreed to sell the cargo to Nako, despite Nako failing to put up payment guarantees. Ngwenya would later tell us: 'For us, our interest is being able to be paid what we are owed [on Daytona]. So we said to PetroSA, 'Okay, we'll buy, since you are asking us to buy this cargo [of diesel]' … considering that they are already sitting with close to a billion rand of our product, that is enough security for them.' The Jag Pushpa would discharge 50 million litres of diesel into Nako's tanks in Durban, just as the Daytona was discharging 50 million litres of the tainted unleaded petrol in PetroSA's tanks in Mossel Bay. The deal was a bad one for PetroSA: it had effectively swapped a valuable cargo of diesel for a cargo of unleaded petrol that no one wanted to touch. Selling off the fuel For the next four months, the unleaded petrol sat in PetroSA's tanks. PetroSA still had another 10 million litres of Nako's second cargo and after testing the bottom of the tanks, the Technology Support department had raised concerns that the remaining product could be damaging them, 'especially given that the product was not evacuated as planned and left for months'. 'Shell was saying there's an issue with the quality, that product must be sold for next to nothing,' Ngwenya told us. 'We know there's no issue with the product so we're saying, 'let's go pick it up'.' Nako, he told us, agreed to buy back a portion of the fuel at discount; it would then be trucked to its own network of 60 garages across the country and sold. When we interviewed Ngwenya, we did not have the results of the internal PetroSA investigation. In follow-up questions we asked him whether Nako had told its customers that the fuel contained NMA, but by this point, Nako said it couldn't answer any more questions. This still left PetroSA with at least 50 million litres of chemically tainted petrol that urgently needed a buyer. The plan, according to a senior PetroSA source, had been to move some of the unleaded petrol to PetroSA's storage tanks in Bloemfontein, where buyers were apparently unfazed by the chemical content of the fuel. PetroSA had also been talking to Shell about the possibility of diluting Nako's fuel with other cargoes of unleaded petrol. But Shell had been outspoken about the risks posed by the NMA and according to the investigation report 'refused to accept fuel that contained NMA'. Ngwenya insists that Shell did eventually agree to buy some of the fuel. 'The same product that they said a year ago there were quality issues, Shell has been picking up,' he told us. We put this to Shell, but it refused to answer our questions. Instead, it offered a bland response, saying it was 'committed to quality control processes' and would stop supply if any petrol was 'found to be of concern'. 'As a matter of principle, Shell Downstream South Africa does not comment on commercial relationships about its business partners,' it added. So, whether any of the fuel has been moved or sold remains a mystery. The final page of PetroSA's investigation report, written in February this year, notes: 'Based on the serious hazard and dangerous classification … PetroSA could still be exposed if the product is released into the market.' Political intervention In August 2024, Nako had written to Jacob Mbele, the director general in the Department of Mineral and Petroleum Resources, asking him to intervene on Nako's behalf. 'We formally lodge a protest and complaint against the ongoing attacks, sustained investigations, and insinuations that we may be receiving preferential treatment or undue attention,' Ngwenya wrote. Of course, it would be hard to deny that Nako had received undue attention. In the space of two years, PetroSA had sold Nako two cargoes of diesel for R1.5-billion, bought three cargoes of unleaded petrol for R1.8-billion and proposed a three-year deal worth roughly R11-billion. Nako had so far done little more than connect PetroSA to its supplier in the UAE, but in March 2024 a joint venture agreement had been drawn up to give Nako the lion's share (50%) of the partnership, with PetroSA and the supplier taking 25% each. Long-term, Nako's ambition was to set up a fuel blending project in South Africa. However, PetroSA's head of legal had refused to sign the joint venture agreement: 'Nako was labelled by PetroSA's head of legal as an untrusted company that should not be allowed to conclude a joint venture with PetroSA,' Mgwenya told the Department. 'This characterisation was based on our supposed youth, inexperience, and lack of trustworthiness — despite the fact that we have over 60 years of combined experience and the support of one of the UAE's most successful blenders.' We asked Mbele what action he took after receiving Nako's letter with Ngwenya's plea for 'immediate intervention'. Sources have told us that the Department repeatedly raised the issue with PetroSA. In a written response, however, the Department downplayed its involvement, telling us: 'As this was a commercial issue between Nako and PetroSA, the Department referred the letter to PetroSA who indicated to the Department that they were engaging with Nako Energy to resolve their commercial disputes.' Settlement Nako not only wanted PetroSA to pay for the third cargo of unleaded petrol (R634-million), it also wanted R168-million in demurrage fees for the three cargoes that had spent months waiting offshore. In his August letter, Ngwenya had told the Department: 'Our outstanding invoices now exceed R950-million, and our demurrage invoices have accumulated to over $12-million [R214-million]'. In short, Nako now wanted almost R1-billion from PetroSA, while PetroSA was asking for roughly the same amount — R933-million — for the cargo of diesel that Nako had taken. The only difference was that Nako could sell the diesel, while no one wanted to buy unleaded petrol with high levels of NMA. Initially, Nako had been paying for the diesel cargo in R20-million/week instalments, but after four months, it stopped: 'Nako has paid constantly, hoping that when we pay them, they'll pay us for Daytona, but … nothing has ever come back to us,' Ngwenya told us. In December 2024, PetroSA's executive committee agreed to investigate Nako's unleaded petrol deal and appoint its chief economist and head of corporate planning, Mxolisi Landu, to head up the team. The report, which we have been quoting from throughout this article, concluded that PetroSA had suffered 'financial losses, reputational damage and loss of customers' as a result of the Nako fuel debacle. FIASA told us that the major fuel companies no longer buy fuel from PetroSA in Mossel Bay and 'have been servicing their network from Cape Town, Port Elizabeth and East London since this incident'. Under lessons learnt, Landu wrote that PetroSA had failed to identify the risks and 'possible challenges in the oil industry accepting the ULP'. The introduction of this new product 'did not follow appropriate processes and procedures' or align with 'statutory and regulatory requirements', he wrote. There had also been a lack of consultation with PetroSA's Technology Support division and a 'lack of transparency from the suppliers of ULP 95 that contains NMA'. The conclusion? The fuel contained 'high concentration of NMA impacting on the potential gum [which] raises several concerns regarding the potential risks and exposure to PetroSA'. Within days of Landu's sobering report being delivered in February 2025, PetroSA's leadership was shuffled: acting CEO Mmete Fusi, under whom the investigation began, was replaced by Sesakho Magadla, the former COO. Back in April 2024, it was Magadla who had confidently told SABC that there was nothing wrong with Nako's fuel, despite PetroSA having evidence to the contrary. But the efforts to sweep the Nako fuel debacle under the carpet may have an expensive conclusion. Last month, Ngwenya told us that PetroSA and Nako were discussing a settlement. 'It's fairly advanced, we're just arguing around the demurrage,' he told us. 'They've acknowledged that they owe us. We're now at the point where we're [discussing] offset arrangements.' Two weeks later, he told us that PetroSA and Nako had quietly reached a deal: 'With regards to PetroSA and Nako our accounts have been settled,' he told us via WhatsApp. '[W]hatever issues we had, have been resolved amicably. And all amounts settled.' DM
