Port of Durban eyes big investments
Port of Durban, being major South African port, aims to maintain its competitiveness with investments planned to enhance the existing terminals and build new terminals in the coming years as a part of Transnet Market Demand Strategy (MDS).
In a country where large numbers of goods are moved by sea, ports have always played a strategic role in the overall economic growth of the country. Africa is one of them. Out of the ports in Africa, Port of Durban is Africa’s third largest port and first in Sub-Saharan Africa. Being South Africa’s premier multi cargo port, it contributes 20 percent to Durban’s Gross Domestic Product (GDP), 11 percent to a coastal South African provinces’ KwaZulu-Natal’s GDP, 2 percent to South Africa’s GDP. Port of Durban has a market share of 29 percent of South African cargo. As many as 4500 vessels call at the Port of Durban annually. It handles containers, automotive cargo, breakbulk (including abnormal cargo, steel commodities and project cargo, neo-bulk, timber, steel coils and other steel profiles), and agricultural bulk (such as wheat, maize, soya bean meal, animal feed, woodchips). The total 2015 throughput was 87 million tonnes. It handled 2.8 million TEUs (twenty foot equivalent units) of container cargo, 9.6 million tonnes dry bulk cargo, 455,000 automotive units, 25 million kiloliter liquid bulk and 3 million tonnes break bulk. In order to maintain its competitiveness with other ports, Port of Durban has been reducing the cost of doing business, constantly improves operational efficiency and safety, sweating existing assets as they seek to create new capacity, and encourage regional integration with other African ports. Transnet, the South African transportation company that runs and manages the Durban port, is kee on easing congestion at the port to ensure it remains cost-competitive and that South Africa sustains its strong logistics profile in Sub-Saharan Africa and globally. Ergo, the port looks at big investments. “The Port of Durban will see investments to the tune of 27 billion for projects over the next 10 years aimed at creating capacity ahead of demand. This is part of the Transnet Market Demand Strategy (MDS) which is now in its fourth year,” informs Moshe Motlohi, Port manager, Port of Durban. Alongside this, there is also the South African government’s Operation Phakisa initiative which focuses on unlocking the potential of the ocean economy. In Durban, the focus is on getting the Prince Edward Graving Dock (dry dock) into peak condition as part of this programme. The most recent development at the port is the plan of a liquid bulk terminal to handle petroleum products as a shortage of refining capacity that is expected to spur growth in imports. “Transnet National Ports Authority has advertised this Request for Proposals (RFP) with the intention to appoint a Terminal Operator to finance the design, construction, development, operation and ensure maintenance of the liquid bulk terminal which will handle refined petroleum products only. The national demand forecast for petrol, diesel and jet fuel is expected to grow from 29.9 billion litres to 83 billion litres for the period 2015 to 2044. The demand includes South Africa, Botswana, Lesotho, Namibia, Swaziland and exports to markets in Southern Africa hence TNPA is creating capacity ahead of demand. The cost of the project will become evident depending on the design of the facility and the like,” explains Motlohi. Some other upcoming projects at the port include increasing the container capacity of the Port of Durban, from 3.9 million TEUs (twenty foot equivalent units) to 4.6 million. That project will include widened and deepened entrance channel and deepened berths at Pier 1 the Durban Container Terminal (DCT) to accommodate larger vessels. Work on this project is expected to begin in 2018 and conclude in 2023, raising capacity from the existing 700,000 TEUs to 2.4 million TEUs. The widening of berths 203 to 205 at Pier 2 of the DCT will expand the existing capacity of 2.9 million TEUs. Work is expected to commence in 2017 and conclude in 2022. The constant development of the terminals at the airport continues to enhance South Africa’s position in the trade map. South Africa is a member of BRICS alongside Brazil, India and China and has signed many other agreements with its trading partners in the past few years. Principal international trading partners of South Africa, besides other African countries such as Botswana, Lesotho, Namibia and Swaziland - include Germany, the United States, China, Japan, the United Kingdom and Spain. South Africa is the EU’s largest trading partner in Africa. The top export destinations of South Africa are China, the United States, India, the United Kingdom and Hong Kong. The top import origins are China, Germany, Saudi Arabia, the United States and India. Transportation consultancy BMI expects port investment to provide critical support to overall construction industry growth in South Africa over a 10-year forecast period, at an average annual growth rate of 2.7 percent.