Transnet has awarded a R2.5-billion contract to Spiecapag and Group Five Civil Engineering to build a multi-purpose product pipeline between Durban and Gauteng, Transnet said on Wednesday.

Spokesperson John Dludlu said R2.5-billion had been awarded to the two organisations for a joint venture.

Transnet's CEO Maria Ramos said the contract was the biggest since Transnet started its R80.3-billion investment programme.

The new pipeline is due to be commissioned in the third quarter of 2010.

The contract is for the construction of a 544 kilometre, 24 inch line from Durban to Gauteng, as well as a 160 kilometre, 16 inch inland network from Kendal to Waterloo and Jameson Park to Langlaagte via Alrode.

Construction to begin in July

Dludlu said construction work would begin in July and finish in 2010.

He explained that this project replaced and expanded the Durban to Johannesburg pipeline, which transported refined petroleum products from Durban.

Dludlu said the project facilities would support a 4.2 percent annual growth in refined products along the Transnet pipelines delivery region in a phased development.

Dludlu said Transnet received its construction licence in September last year.

He explained that the environmental impact assessment process for the pipeline was in the scoping phase and expected to be finished by the end of 2008.

Dludlu said Transnet had contracted Arup and Worleyparsons to carry out the engineering, procurement and construction management of the pipeline.