Politicians push importance of port performance
PCC engagements commence to bring port stakeholders together
SOUTH AFRICA: As the Port Consultative Committee meetings get underway this week with their usual cross-dialogue between the ports, the regulator, and the port users – it’s worthy to note some of the attention various politicians have placed on the port system over the last two months.
In April this year, much was made of President Cyril Ramaphosa’s visit to the Port of Durban. He had last visited the port in October 2019 when he was made aware of a number of concerns relating to congestion and delays, poor maintenance of equipment and general low productivity in the port.
His oversight visit in April was intended to “assess the progress in enhancing the efficiency and competitiveness of the port”. A statement issued ahead of the visit highlighted the significance of the visit saying:
“Improving the efficiency of the port and establishing its status as a global shipping hub is a key priority of the President and a focus area of Operation Vulindlela.”
After his visit, the President said: “The management has ambitious and exciting expansion plans for all five of the port’s precincts. These include the deepening of the Maydon Wharf channel to allow larger, modern vessels to enter the port, the infill of Pier 1 and Pier 2 to create additional capacity for containers, and the development of a new container terminal in the Point Precinct.
“We have made improving the efficiency of our ports a priority of Operation Vulindlela, and have focused on rebuilding Transnet, which is one of our valued state-owned enterprises. The new management of Transnet and its operating divisions are resolutely focused on turning the performance of the port around,” he said.
Operation Vulindlela was announced in October 2020 as an initiative to “fast-track the delivery of economic reforms” and is being implemented as a joint initiative of The Presidency and National Treasury.
Unlike Operation Phakisa for the maritime industry, Vulindlela is more far-reaching, but has a set target of December 2023 to corporatise Transnet National Ports Authority (TNPA). It also aims to improve the competitiveness and efficiency of the country’s ports.
A more imminent deadline is just around the corner for Operation Vulindlela. July of this year was the target for Parliament to pass the Economic Regulation of Transport Bill and develop a business plan for the establishment of one single transport regulator which is due to be achieved by March next year.
Port of Durban positioned as a hub port
Answering questions in the National Assembly at the beginning of May, President Ramaphosa addressed the issues at the Port of Durban in relation to the country’s economic recovery plan. Acknowledging the significance of the port in terms of South Africa’s economic activity, he admitted that the port had lost its status as the best performer on the continent.
“In recent years, the port has suffered from long waiting times, inefficient operations and congestion which has affected large parts of the Durban metro,” he said essentially repeating much of what port users have been pleading for action on over the last decade.
The president, however, said that the new management would “turn around the port’s performance”.
“Over the next decade, this plan will expand the capacity of the port for container handling from 2.9 million units to more than 11 million units. It will position the port as a hub port for the region, the continent and the entire southern hemisphere,” he told the National Assembly.
Notable is the realisation that these efforts will require greater private sector participation and investment in the port sector. “Partnerships with the private sector are crucial to bring new expertise to port operations and to modernise equipment and infrastructure,” he said emphasising that this did not mean that the port would be completely privatised.
Among the plans outlined by Transnet is the advertising of a concession to build and operate the new Point Terminal by October 2021.
“Massive new investment in port infrastructure will not only lower costs and improve the competitiveness of our exports, but will in fact create thousands of new jobs, both in the port itself and in the economy as a whole,” he said.
It is anticipated that the cost of proposed expansion infrastructure for the port will require more than R100 billion in new investment over the next decade as the government aims to position the Port of Durban as a “hub port for the Southern Hemisphere”.
The PCC virtual meeting for the Port of Durban takes place next week on 10 June.
Calling for interventions in the Port of Cape Town
Just last week, MEC Ivan Meyer took a stand to address the inefficiencies at the Port of Cape Town and the impact this has on agricultural exports. The Western Cape is responsible for half of all South Africa’s agricultural exports – making the Port of Cape Town a vital instrument of delivery for farmers.
Following a meeting with the Citrus Growers Association (CGA), MEC Meyer noted the impact of the port saying; “The shortage of equipment and obsolete equipment highlights the Port Authority's inability to manage the Cape Town terminal efficiently. It undermines the critical role that the port should play in supporting exports and economic growth.”
He emphasised the need for an intervention by the national government and called on President Ramaphosa to visit the Port of Cape Town “urgently”.
“The Department of Economic Development and Tourism, led by the Minister of Finance and Economic Opportunities, David Maynier, established a Port Task Team which has brought together stakeholders from across the port logistics value chain to find solutions to the challenges facing the Port of Cape Town. And while this Task Team has achieved some successes to date, improving port efficiency will ultimately require an intervention by the national government,” he said.
Meyer noted that the opportunity to create new jobs in the Western Cape rested on the efficiencies of the port for improved export performance.
“An efficiently run Port of Cape Town will enhance the economic recovery of the Western Cape and support the critical role that the agriculture sector is playing in growing the economy and creating jobs,” he said.
Cape Town’s PCC meeting will take place virtually on 3 June next week.
Putting Northern Cape on the maritime map
Not traditionally seen as a significant harbour, Port Nolloth received some attention at the beginning of May when the Deputy Minister of Trade, Industry and Competition, Nomalungelo Gina visited the coastal town.
One of the interventions for economic growth includes a plan to revitalise the Port Nolloth harbour in order to stimulate various economic activities around the port that will also benefit small and medium enterprises. During her visit Gina expressed optimism and confidence that tourism, mining, fisheries, hospitality, and beneficiation could help revive the town.
“As we revitalise the harbour and open up more opportunities for small scale fisheries, more jobs will be created,” she said.
The proposed greenfield development of a new deepwater port at Boegoebaai – some 60 kilometres from Port Nolloth – has been included in Transnet’s long term development plans for over five years, but has not seen much traction yet.
The long-term layout associated with the new port includes a container terminal, ship repair facilities, MPT terminal and dry bulk berths.
But as the port stakeholders engage over this week and next, one thing is for certain; they will be calling for more constructive action and less empty promises from Transnet.