New development

Transnet to build dug-out port at airport site

Transnet is planning to build a dug-out port on the site of the old Durban airport.
Durban container

The Old Durban International Airport has officially been handed over to Transnet for the proposed development of a new R75-billion dug-out port. The first of four phases is scheduled to start in 2016.

With escalating costs, the figure, upon completion, could be as much as R200 billion.

The Durban Port, one of the busiest on the African continent and the ninth largest in the world, experiences growing demands of imports and exports. It is fast exceeding its capacity to handle cargo.

The plan is to create Africa's largest deep-water container terminal, capable of handling 9.6 million twenty-foot-equivalent units (TEUs) through 16 berths, by 2037, and incorporating an automotive terminal and a liquid-bulk handling facility by 2050.

It will also cater for expected container volume growth, currently calculated to expand from four-million TEUs in 2010 to 20-million TEUs in 2040. Demand for container capacity in Durban was expected to grow from 2.5 million TEUs currently to 12 million TEUs over the period.

The development will create 64 000 jobs during the construction and a further 28 000 permanent jobs thereafter.

MEC for Economic Development and Tourism in KwaZulu-Natal Mike Mabuyakhulu concedes that the old airport will not be sufficient enough to handle growth of exports and imports, hence they require to have a new port with greater efficiency and one which can handle "mega-ships".

Minister of Public Enterprises, Malusi Gigaba, notes that the new development will "project us beyond South Africa".

"It's about the future of the continent, the future of the region, how we facilitate meaningful trade in Southern Africa, how we address unemployment and lack of skills," the minister said.

 But residents and environmentalists have expressed concern over the new development.

Funding for the dig-out port is not included in Transnet’s current R300-billion capital budget. It will have to be pursued as a public-private partnership (PPP).

Gigaba said the implementation of the "ambitious" plan would require "real and meaningful partnerships between the public and private sectors in order to unlock their common balance sheets for the good of country and our economy".

 He said there was already a palpable private appetite for Transnet’s existing infrastructure pipeline, both from those domestic and foreign investors who had purchased Transnet bonds, as well as from equipment suppliers and contractors. Therefore, the expectation was that private funders and port operators would “come to the party”.

The final PPP model had not yet been finalised, but transaction advisers had been appointed and should deliver options by the end of February. The consortium appointed to interrogate the models included Maritime Transport Business Solutions, Arup and Van Velden Pike Attorneys.

NOTE: A new man is at the helm of port operations in South Africa – Transnet National Ports Authority has announced the appointment of Herbert Msagala as general manager for port operations effective June 2012Msagala will be tasked with the responsibility of providing effective and efficient, safe and affordable port services in support of TNPA’s strategic objectives.

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