Transnet National Ports Authority (TNPA), the wholly-owned subsidiary of Transnet says it has a strategy to become a world-class port operator, and will focus on the hub port in Durban.
Earlier this week, Transnet reported a slight increase in revenue for the year ended March 2022, to R68.5 billion, while EBITDA (Earnings before interest, taxation, depreciation and amortisation) improved by 20.5% to R23.4 billion.
Profit for the year is R5 billion from a loss of R8.7 billion in the prior year. The significant increase in profits is mainly attributable to the improvement in the EBITDA, a decrease in asset impairments and an increase in fair value adjustments related mainly to investment property (IP), it said.
The group, which employs 50,015 workers, and operates 16 Cargo terminals across 7 South African ports, has said that it will cost R100 billion to expand its Durban port over a10 year period. Expansion plans have also been proposed for Gqeberha’s Ngqura port.
It said that the value to be invested in Transnet’s operations per functional portfolio over next five years includes R30 billion towards the National Ports Authority and R14 billion for Port Terminals.
Briefing the Select Committee on Public Enterprises and Communication on the capacity expansion programme to increase exports/imports at both ports in June, Transnet National Ports Authority chief executive, Pepi Silinga, said it is an organisational priority to develop Durban’s port into a modern deep-water facility.
“Bringing this task to a conclusion requires multi-phased investments, the first being the conclusion of a partnership to drive a turnaround strategy for Durban Container Terminal Pier 2. The partner is expected to support the required investments to modernise the terminal.
“Part of Transnet’s hub port strategy includes further development of the Ngqura port into an efficient, trans-shipment-focused container terminal. The port has modern infrastructure and equipment, and is capable of handling large container vessels,” Silinga said.
Due to operational challenges and lack of competition, Silinga said the Ngqura container terminal is currently not making effective use of its capacity.
Committee chairperson, Zolani Mkiva, said the projects Transnet is currently working on are significant and meaningful in job creation and employment opportunities. “Investing in infrastructure is the creation of more employment opportunities,” Mkiva said.
The committee commended an announcement about future plans for East London, noting that the port has enormous potential and can provide much-needed economic activity, although little work is planned for the immediate future.
Mkiva said for a long time there has been a suggestion that the sector is dominated by particular companies, requiring an indication of how the sector is being opened and made more accessible to the majority of South Africans.
The committee also wanted to understand if the sector is making progress towards transformation to ensure that the majority of South Africans from historically marginalised communities have access to the sector.
“As a key pillar of the Container Segment Strategy, the development of the Port of Durban into a modern, deep water hub port is an organisational priority. Achieving this task requires multiple phased investments, the first being the conclusion of a partnership to drive a turnaround strategy for DCT Pier 2.
“The partner is expected to support the required investments to modernize the terminal in addition to providing ongoing operational & commercial support to insert the terminal into global shipping line calling routes. This is, in part, to reduce logistics costs associated with servicing South African ports,” said Silinga
The strategy for the KZN Ports Master Plan is as follows:
- The Port of Durban will be positioned as a Container Hub.
- The Port of Richards Bay will handle the Dry Bulk relocated from the Port of Durban.
- The South African (SA) Navy will be relocated from Salisbury Island; Base at the Port of Richards Bay and Satellite Station at the Port of Durban.
Durban Port current layout
Durban port master plan
The project will also see back of port operations improved and will include a logistics park in Durban, an intermodal terminal in Cato Ridge, near Pietermaritzburg – to assist with decongesting the Port of Durban and support the migration of freight from road to rail.
Transnet’s plans for the Eastern Cape include:
Part of Transnet’s Hub Port strategy includes further development of the Port of Ngqura into an efficient, transhipment–focused container terminal.
“The port has modern infrastructure & equipment and is capable of handling large container vessels with the main drawback being under–developed hinterland logistics incl. rail,” the TNPA said.
Transnet said it intends to partner for operational efficiency improvements in addition to investment in terminal capacity. “This, paired with an International Operator’s access to the transhipment market will improve the terminal viability and boost complimentary volumes,” it said.
Transnet’s capital expansion programme received a boost in June after the state owned freight and logistics company signed a $1.5 billion five-year senior unsecured term loan facility, led by the Deutsche Bank AG.