Private sector vital to big port project
Durban woos business to get aboard for R100bn expansion
● Moshe Motlohi, GM of Durban port, says the private sector will be “at the centre” of a R100bn project to quadruple the port’s container capacity and increase its car-handling capacity by two-thirds.
There is no way the government can fund this itself, he says. They’re looking to the private sector to carry the bulk of the cost. “We’re calling on the private sector to throw its lot into building this new capacity.”
He’s confident they will come to the party. “They’ve always been looking at opportunities to invest in the port, more so in the container handling business, which has been closed to them.
“We’ve been doing extensive stakeholder engagements to try to woo them and get them on board. Everyone wants to see the port improving in capacity.”
Transnet’s record of achievement at the port has been less than stellar. It has plunged from being Africa’s busiest, largest in terms of handling capacity, and most efficient, to lagging well behind Tangier in Morocco and Port Said in Egypt.
Motlohi admits there’s some scepticism about its ability to implement something as ambitious as this so-called master plan.
“They want to know, is this going to happen this time round?
“Secondly, they’re asking can you be doing this thing without behaving in a reckless way where you start disrupting security of supply? These are some of the fears that are coming in from the private sector, which are fair fears.”
But there is broad agreement “that this is long overdue. They’re really hoping this will improve the service offering from the port.”
He says they’re looking to complete the project by 2032, but have asked international experts to review the plan to see if their timelines are “not too ambitious”.
When government authorities in KwaZulu-Natal tried to woo the private sector into investing in development projects five years ago, businesses raised a number of sticking points, including the lack of policy clarity and an environment conducive to economic development and growth.
Why should they be any more enthusiastic now? “We’ve got businesses that are operating in the port where there is less interference from us as the port authority,” says Motlohi. Provided they stick to their contractual commitments and comply with “regulatory issues such as how you deal with labour”, they’ll be left alone.
He acknowledges that red tape is probably the biggest disincentive for potential investors. “I’m optimistic that the processes we’re rolling out won’t have unnecessary red tape. People will come with their bids, we’ll evaluate those bids and they’ll run their businesses in the best way they know. We’re not going to be prescriptive.
“Our obligation will be to ensure that the infrastructure supports them and that other activities in the port do not disrupt them. By and large the businesses that have been operating in the port have been doing well.”
Obstacles to entry have been on the container side, which is now going to be opened up to private sector businesses and expanded. “We’ll be calling on people to come and make good business here,” says Motlohi.
This will kick off in November when they issue a request for proposals for the Point container terminal, which he hopes will increase container capacity from 200,000 to 1.5-million twenty-foot equivalent units (TEUs) within three years.
The ultimate goal is to increase container capacity in the port to 11.3-million TEUs from the current 2.9-million. This will put Durban ahead of both Port Said with its 5-million container capacity and Tangier with a capacity of more than 9-million.
Motlohi, 51, who became head of operations at the Durban Container Terminal in 2005 after learning about logistics while managing a South African Breweries unit in Umtata, doesn’t think this is too ambitious.
He says the reason government promises going back to at least 2007 to bring in the private sector to operate container terminals never materialised was that “we never really set aside an area that we said was going to be for the private sector”. The current master plan has for the first time identified areas that are open to anyone who wants to get into the container space, he says.
“Now we have put a peg in the ground and said this is where we are looking to expand capacity. This is a huge departure from what we had before. We have started doing something. We are saying, here are opportunities. Businesses can decide how they want to engage with these opportunities to put the country on a better footing when it comes to maritime space.”
Project implementation by the Transnet National Ports Authority doesn’t inspire much confidence.
In 2015 they announced a five-year multibillion-rand project to revitalise Durban port’s dry docks, procure cranes and other infrastructure.
Motlohi, who was made port manager in 2014, concedes that more than six years after this confident announcement the installation of new capstans and cranes essential for the functioning of a dry dock hasn’t yet happened. They haven’t even been procured yet, he admits, blaming the delay on the Covid shutdown.
Durban port has been flagged consistently for its congestion, delays and inefficiencies. “We know that in 2019 we had bad congestion. We put together a team that looked at that. All the problem areas have improved. We are not where we want to be because some activities needed more investment. We need more equipment for container terminal operations so that we can achieve worldclass
The performance of Transnet Freight Rail, which according to exporters is still dismal, is “very central” to the expansion of the Durban port, he says. “They’re beginning to identify how much capacity they need to create on the rail side to make sure the majority of the cargo moves from road to rail” to increase the efficiencies investors in the container business are looking for.
Motlohi admits management capacity to execute the plan is lacking but says a portfolio director will be appointed.
“We know we cannot just use our current resources to pull this off. It has to be driven by a high-powered team.”
This will ultimately be under the control of the Transnet National Ports Authority, “but the recruitment drive will go far and wide to get the best people we can”. There will be no political deployees, he adds meaningfully.
There are some fears that are coming in from the private sector, which are fair fears Moshe Motlohi GM of Durban port