Ports held back by Transnet pension fund

It was simply not true that no investment had been made in port infrastructure since the new government in South Africa came to power in 1994, a senior Public Enterprises official, Dr Ian Phillips, said on Wednesday.

Phillips, special adviser to Public Enterprises Minister Jeff Radebe, told the National Assembly public enterprises portfolio committee that there had been much debate in the media about the issue—but he acknowledged that Transnet’s obligations in terms of its pension fund had placed a huge burden on ports.

By 1999 Transnet had to spend R1,9-billion on servicing its own pension debts, said Phillips, which he described as a “major albatross around the neck of government”.

He said the ports authority was “really being strained as the cash cow for the rest of Transnet”.

He pointed out nevertheless that major projects had been carried out in the early years of ANC rule, including an R859-million investment in the Durban, Cape Town, Richards Bay and Saldanha Bay ports in 1995/96. But his graphs showed little investment in the 1999/2000 period onwards.

However, with the passage of the Transnet Pension Fund Amendment Bill in 2000 which reorganised the Transnet pension fund, the financial burdens “within Transnet began to be lifted allowing for a more coherent and determined investment in infrastructure”.

The Durban terminals upgrade had begun in 2000—scheduled for completion in 2005—involving a project value of R700-million for the cargo handling upgrade and an additional R900-million for the upgrade of the terminal facilities.

A key part of the Durban ports upgrade was the acquisition of 60 straddle carriers with the local assembly of 40 of these. The project value is R323-million and it started in April last year.

The iron ore terminal expansion at Saldanha Bay carried a project value of R921-million.
It too had started in January 2000 and was scheduled for completion in December next year.

This involved the construction of bulk handling facilities allowing for an expansion of output from 18-million tons per annum to 29-million tons per annum.

The Richards Bay Coal Terminal capacity expansion was at the phase of finalising the memorandum of understanding. This project investment will be in the region of R2,4-billion with a proposed finalisation date of 2005/06. In addition the Coega/Ngqura port at Port Elizabeth involved an investment at this stage of R3,2-billion rand. - I-Net Bridge

Client Media Releases

SA political parties talk foreign policy
Barloworld announces new group structure
Should I stay or should I grow?
Use Microsoft's eDiscovery for non-Office 365 data sources