ROB ROSE: It’s not just Lake Charles that is Sasol’s problem
Had investors seen a 2014 Werksmans report, questioning Sasol’s ability to deliver megaprojects, the Lake Charles fiasco might have been less surprising
How long, the joke goes, would it take Sasol to create a R170bn company? Just a year: give it a R340bn company, ask it to build a disastrous, deadline-defying project in Louisiana, and wait. For the millions of SA pensioners who indirectly own shares in Sasol, still the seventh-largest SA company with a primary listing on the JSE, it’s an off-colour joke. But it’s on-point nonetheless.
Officially, Sasol’s project in question is known as the Lake Charles Chemicals Project. Unofficially, it’s known as the "late Charles" project, given that it’s a year past its original deadline. Worse, Sasol is set to spend 45% more on it than the $8.9bn first predicted in 2014, causing its return on the project to tumble below its cost of capital...