Salvation in sight for key ports of Durban and Ngqura

Industry players have welcomed Transnet’s announcement of shortlisted companies for its programme to upgrade Durban Container Terminal Pier 2 (DCT2) and the Ngqura Container Terminal (NCT) in Gqeberha, formerly called Port Elizabeth.

Transnet indicated in a Sens statement that it intends to create a 25-year special purpose vehicle (SPV) between Transnet Port Terminals (TPT) and the winning bidders. It says the deal will not require the disposal or sale of any terminal assets and that the terminals will be fully reverted to TPT after the 25-year period.

It aims to improve the commercial performance at DCT2 by bringing in a partner with international terminal operations experience.

“Transnet is repositioning Durban as a gateway hub port, and plans for significant growth in container capacity over the coming years,” it adds.

The preferred bidder for the NCT will be expected to bring in additional transshipment volumes and improve terminal performance after years of making a loss.

“Partnering with global port terminal operators and shipping lines offers the opportunity to attract much-needed investment [and] instil best-practice management and enhanced technological capability to rapidly improve the performance and volume throughput at the Ports of Durban and Ngqura.”

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Shortlist

Transnet announced the shortlisted bidders as follows:

DCT2

APM Terminals AMI Management DMCESTChina Harbour Engineering Company Ltd and Guangzhou Port Co. LtdCosco Shipping Ports LimitedDP World LimitedGlobal Ports Services Pty. LtdGrindrod Freight Services Pty. Ltd and Hamburger Hafen Und Logistik AktiengesellschaftInternational Container Terminal Services IncRed Sea Gateway Terminal and MMC Port Holdings Sdn BhdStar Classic Investments Limited and Abu Dhabi PortsTerminal Investment Limited and Remgro Limited

NCT

APM Terminals AMI Management DMCESTRed Sea Gateway Terminal and MMC Port Holdings Sdn BhdStar Classic Investments Limited and Abu Dhabi PortsTerminal Investment Limited and Remgro Limited

Welcome progress

Nigel Ward, president of the Durban Chamber of Commerce and Industry, says the move will improve and support South Africa’s competitiveness over time and give businesses an opportunity to access markets.

Nelson Mandela Bay Business Chamber CEO Denise van Huyssteen says it paves the way for innovative private-public partnerships geared at improving port efficiencies while bringing essential investments and skills into the country.

She says the interest of operators with international expertise and support networks is encouraging.

“This will help with the implementation of global best practices which in turn should significantly improve port efficiencies in the medium- to long-term.”

Ward says that while the Durban chamber has not yet been able to gain a broad understanding of the companies’ capabilities, it is confident that Transnet conducted the necessary assessments and due diligence.

“We believe that Transnet needs to engage in participative, facilitative, and accountable governance throughout the process. Furthermore, a co-operative and meaningful relationship between Transnet and the selected [partners] needs to be developed.

“We would like to caution key stakeholders against corruption and illicit activities. If checks and balances are not implemented and exercised, projects of this nature can translate to huge costs,” he adds.

Ward says a plan of action and punitive consequences are key to fighting corruption.

Invest Durban CEO Russell Curtis notes that the key challenges are in the timelines and governance.

“We therefore look forward to speedy and wise implementation, underpinned by a fully transparent, auditable selection process. Our country and her patriots deserve nothing less,” says Curtis.

Transnet says the bidders will be invited to proceed to the request for proposals (RFP) process and will have until December 2022 to submit their proposals for adjudication.

The preferred bidders for each terminal are expected to be appointed by February 2023.

This article first appeared on Moneyweb and was republished with permission. Read the originals article here.