Durban - Transnet Port Terminals (TPT) has unpacked more details of the plan that will see private-sector equity partner, International Container Terminal Services Inc (ICTSI) of the Philippines, come on board to form a new company to operate Durban Container Terminal Pier 2 (DCT Pier 2).
The move aims to ensure more efficient running of the Port of Durban.
TPT said the joint venture would see it and ICTSI form a new company to manage the operations of DCT Pier 2 for a period of 25 years, with the option to extend the time period. The new company is expected to take operational control by April 1 next year.
Managing executive: Durban Terminals Earle Peters said DCT Pier 2 was selected to form a new company with ICTSI as it is Transnet’s largest container terminal. “DCT Pier 2 handles 72% of the Port of Durban’s throughput and 46% of South Africa’s port traffic. There will be no retrenchment of employees and employees will retain the same terms and conditions before and after the introduction of the private-sector partner.”
Peters added that ICTSI was selected as the preferred equity partner as it is the largest independent terminal operator.
“The company operates 34 terminals in 20 countries across six continents, including four in Africa. In the 2021/22 financial year, ICTSI handled over 12.2 million TEUs (twenty-foot equivalent units) and generated more than $2.2 billion (R 41.2bn) in gross revenue; they also employed about 11 000 employees.”
Peters said the partnership would also see new equipment for the DCT Pier 2. Some of the major equipment for DCT Pier 2 includes the ship-to-shore crane and straddle carriers. Transnet policy is that equipment will be sustained for 20 years, however we are finding with global operators that they will replace any equipment that is between five and 10 years in their fleet. That is what we are seeing in the proposals from ICTSI that the replacements in equipment will come much earlier than what we would have done.”
Peters added that the new partnership would also see trucks being better serviced at the terminals.
“In keeping with the road-to-rail strategy we want to make it clear that the servicing of trucks will improve, but we are not increasing the footprint for more trucks to be serviced at the terminal, but rather we will be expanding the rail terminal to handle 1.9 million TEUs on the rail side. We currently have three rail lines and this will expand to six in the next four years. We will grow from 2 million TEUs to 2.8 million through the expansion of rail and not increasing the number of trucks.”
Peters added that Transnet was doing everything possible to address the issues of road congestion from Bayhead Road to the Port of Durban.
“As much as we are hoping that the new partnership with ICTSI is going to reduce the amount of traffic congestion on the roads, we can’t do this alone. The condition of the roads also needs to be addressed. Transnet is not advocating for creating more road congestion. That is one of the reasons that we are expanding our rail capacity to reduce the amount of road congestion to the Port of Durban.
“Our plan is that rail will feed directly from the port to hubs and trucks will then be able to collect from the external hubs. This will mean trucks either collect import containers at the hub or drop off export containers at the external hub. This will assist with reducing congestion coming into the terminal.”
Economists welcomed the plan. Professor Irrshad Kaseeram, of the University of Zululand’s Economics Department, said that it was good news.
“Mainstream economists have for the past 29 years been calling for public-private partnerships for SOEs. This partnership is envisaged to improve the efficiency of the port terminals which is critical for reducing costs, attracting investment and promoting South Africa’s GDP growth.” He added that the move was expected to improve the port’s infrastructure in terms of berth-deepening, among other measures.
“The Durban port is expected to grow sixfold through this partnership which augurs well for long-term growth and foreign direct investment.”
Professor Bonke Dumisa, an independent economic analyst, said the venture would benefit the port.
“There is a long wait for the unloading of vessels at the port and this new partnership will speed up the turnaround time. The other thing is ICTSI manages other ports globally and that will accelerate growth at the Port of Durban. This is not something new internationally as the US also has a Chinese company managing one of their ports.”