The Transnet National Ports Authority (TNPA) is looking for private partners for major infrastructure investments at two of the state-owned entity’s terminals, Public Enterprises Minister Pravin Gordhan revealed on Monday.
In a briefing, Gordhan told journalists that the ports authority — which was recently separated from logistics groups Transnet — was seeking requests for information (RFIs) for the expansion of the terminals at the Port of Durban in KwaZulu-Natal and at Ngqura in the Eastern Cape.
After an oversight visit to the Port of Durban earlier this year, President Cyril Ramaphosa said there were “ambitious expansion plans” in store for the terminal, which would enable the port “to handle larger container volumes and to act as a hub-port for the southern hemisphere”.
The expansion is expected to cost R100-billion over a 10-year period, increasing the Port of Durban’s capacity for container handling from 2.9-million units to more than 11.3-million. It will also allow the port to handle almost 60% of the container traffic into and out of South Africa.
Gordhan said the infrastructure plans “will create huge opportunities” by allowing the country to respond to increased export demand, particularly for commodities. Revenue from the commodities price boom has recently helped cushion South Africa from the blows to its economy dealt by the Covid-19 pandemic and last month’s riots and vandalism in parts of KwaZulu-Natal and Gauteng.
“These are also massive investments in the economy — from Transnet itself and South Africans and overseas investors — which is quite important in order to demonstrate confidence in our economy, but also to improve the infrastructure in relation to the logistics system in South Africa,” Gordhan added.
The first round of RFIs kicked off in July and are ongoing. Between now and September, Gordhan said, there will be further engagements with interested parties. Later in the year, between November and next January, a request for proposals “will be entertained”. He said the successful bids on the projects would be approved by June 2022.
Transnet chief executive Portia Derby noted that the RFIs would be issued to test market appetite. “We are still in a negotiation process, so it is a constant discussion, and working with the unions to arrive at what ultimately would be the most ideal partnership,” she said.
The investments, Gordhan noted, form part of the economic recovery and reconstruction plan “in which the reform of the network industry plays a critical part”.
“These reforms are in line with the structural reforms that the president and government have indicated will be forthcoming from Transnet and from other entities as well,” he said.
“It is a further demonstration of government’s commitment to continuing with the structural reforms in improving the efficiency of its logistics infrastructure.”
The first critical reform affecting Transnet, announced by Ramaphosa in June, was the establishment of the Transnet National Ports Authority as an independent subsidiary. The separation, the president said, would mean that revenue generated by the ports could be invested in infrastructure.
Ramaphosa said: “This reform will have a direct impact on port users and our export industries. They will benefit from increased efficiency, lower costs and new investment in port infrastructure. It will also have an impact on the lives of ordinary South Africans, who will benefit from lower prices of goods and more jobs throughout the export value chain.”
The TNPA is currently in the transition process, Gordhan said on Monday, and work is underway to appoint a permanent board for the entity. The ports authority will have its own clear investment plan by October, the minister said.
Also at Monday’s briefing, Transnet board chair Popo Molefe responded to criticism that the entity is embarking on a process of privatisation.
“In reality, that is not what we are doing. We will continue to own those assets … But what we are doing is to invite the private sector to participate in key infrastructure projects that we are embarking on,” he said.
“Within a context in which the country has been downgraded many times — increasingly making access to funding very difficult and expensive — we are adopting creative ways to unlock capital from inside our country.”