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Gordhan wants Transnet to secure R100bn infrastructure investment into SA ports

Largely through private sector partners and investors over the next five years.
Public Enterprises Minister Pravin Gordhan, left, seen here with President Cyril Ramaphosa and a Transnet official during an oversight visit of the Port of Durban in April. Image: Elmond Jiyane/ GCIS

Public Enterprises Minister Pravin Gordhan has an ambitious goal of getting state ports and rail giant Transnet to secure up to R100 billion in new infrastructure investment into South Africa’s ageing and constrained ports over the next five years.

On Monday, Gordhan and Transnet Group CEO Portia Derby announced plans for securing private sector partners and investment into Transnet’s port network over the next five to ten years as part of the government’s broader economic reforms drive aimed at unlocking investment and bolstering the country’s growth and competitiveness.

Requests for information (RFIs) are going out to gauge market appetite from the private sector to invest in South Africa’s ports, which have historically been controlled and developed by state-run monopoly Transnet and Transnet National Ports Authority (TNPA).

Read: Stakes in inefficient state ports up for sale in SA

As part of the first round of RFIs, Gordhan says Transnet is looking for local and international companies to invest billions of rand into terminal operations in the Port of Durban and Port of Ngqura (part of the Coega Industrial Development Zone, north of Port Elizabeth/ Gqeberha).

Transnet, which has historically been profitable despite also being entangled in state capture during the Zuma administration, does not have the balance sheet to undertake the kind of mega infrastructure investment needed to boost capacity, efficiencies, and competitiveness of SA’s ports, especially the Port of Durban that handles over 60% of the country’s container traffic.

Gordhan and Derby are hoping that the RFIs will result in serious interest from local and foreign investors and key players in the ports, terminals and maritime industry.

The first few opportunities being punted include investing into Durban’s major Pier Two Container Terminal, the expansion of the Point Container Terminal also in the Port of Durban, and container terminal expansions in Ngqura.

Read:

No major improvement in Durban Port efficiencies, says organised business

TNPA head office’s move to Port of Ngqura questioned

While the projects in Durban and Ngqura are being highlighted, Gordhan stressed that the Department of Public Enterprises (DPE) and Transnet are eyeing “investment of R100 billion across SA’s ports system over the next five years”.

A large chuck of the envisioned investment is expected to go into the Durban Port, which is reaching capacity of around 2.9 million TEU (twenty-foot equivalent unit) containers per year.

“The port of Durban alone is expected to see investment of around R100 billion over the next 10 years,” Gordhan added, reiterating a figure mentioned by President Cyril Ramaphosa during a government tour of the Durban port earlier this year.

He said that Transnet is busy finalising the Durban Port Masterplan, which aims to ensure the port continues to handle 60% of SA’s import and export container traffic with major infrastructure investment plans on the cards.

“These are massive investments in the economy — from Transnet itself and South Africans and overseas investors — which [are] 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,” he stressed.

Read: Port of Durban to be repositioned as a hub for the continent

Gordhan said following the RFIs and then a RFQ (request for quotations), an official request for proposals (RFPs) would go out by November this year and close in February next year. Between March and June next year, bids will be evaluated and are expected to be awarded.

This means the DPE and Transnet want to have the first round of investments with the private sector into the country’s ports signed within a year, and consequently launch construction or see investment into port terminal infrastructure being expedited.

While neither Gordhan nor Derby made mention of any specific private sector partners being targeted, the recent announcement by Dubai-based global ports giant DP World of its buyout offer for JSE-listed logistics group Imperial is worth noting.

DP World is also a joint-venture partner with JSE-listed Grindrod Limited in operating a terminal at the Port of Maputo in Mozambique and has a presence in several other African countries.

Read:

Imperial to be delisted if DP World’s proposed R12.7bn acquisition is finalised

Mozambique’s vast gas fields will fuel growth, says Grindrod

Meanwhile, Derby said during the briefing that investments into the Durban Port until 2032 is set to see the port’s container or TEU handling capacity almost quadruple, from the current 2.9 million TEUs to 11.3 million TEUs.

However, this is based on all infrastructure projects as part of the Durban Port Masterplan going ahead, including a super port terminal in the middle of the harbour.

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Don’t hold your breath. SAA also went the public funding way and that little endeavor went quiet. But it seems as if ‘public funding’ is the new buzzword when the state needs money.

the idea may be good, as long as it is not a repeat of eskom’s medupi and kusile in financial terms and job allocation for pals that does not know anything about harbour extensions at all

The development is necessary, HOWEVER, with the Unions running the show and the port being “unable / reluctant to increase efficiency I don’t see private equity lining up to participate.

Cadre deployment>> Does everybody now think or hope a long in the tooth ex “freedom” fighter can fix what they broke???

Hahahaaa. What a joke.

It is an ambitious goal indeed. No matter how difficult it will be to raise these funds, the RFI’s shouldn’t compromise the need and importance of world class Information and Communications Technology for the whole infrastructure investment. The key role of the Private Sector Partners should be to support the plans by using information and communications technology to help meet government objectives over the next 5 years or overcome problems. These types of plans should range from strategic (such as developing a new ICT strategy) to tactical, and to highly operational. Red lights will flash if the RFI’s do not cover business intelligence, workforce analytics, customer intelligence, data warehousing (big data) and predictive modelling. Let the project wheels start turning.

I just love it when people speak dirty!

25 years of plans and more plans.

Im afraid … there is no strong foundation… hence any plan WILL fail.

the weeds (ANC) in the garden are difficult to uproot.

Under the ANC government, we are a developmental state with a National Development Plan(NDP), and therein lies the sinkhole under the privatization of SOEs.

A developmental state is a centrally-planned, or command economy, managed by clueless cadres, who have been blessed with the gift of the gab, representing clueless voters suffering from the slave mentality. That explains why this quest for private partners, to form a private/public partnership, is nothing but a glorified and well-camouflaged ambush for investors.

Once they have entered the death-acre of the ambush they will trigger the illuminating flares, claymore mines, heavy machine guns, and small-arms fire. The BEE bandits, construction mafia, transport mafia, cable thieves, cash-in-transit robbers, hijackers, protection racketeers, and worst of all, the ANC politicians, are anxiously waiting to spring the ambush.

ANC policies have depleted all the available cash resources. We need new sources to plunder now. That is why we are looking for private investors all of a sudden.

Individuals in financial distress always see a loan as the panacea, solving all previous hardship. Unfortunately, because the person has already proven they are unable to manage their finances and are in the position because they continually spend more than they earn, the loan only exacerbates the problem. It’s a snowball.
Every South African SOE, state department and municipality seem to have exactly the same perspective as a debt ridden individual. There are no specifics around the plan, it is just “give me more and the problems will go away!!”
If you have a monopoly and you manage it well, what on earth would you need to borrow billions for?

As with SAA it will be a private entity that takes over the management, with a cadre connected BEE component, funded by pensions and/or taxpayer contributions, that leeches off the profits.

The grateful BEE beneficiaries then fund the governing party.

The “master plan” approach of Patel and Gordhan is simply state imposed corruption.

Calculations
R100Bil divided 620,00 per job 161,290 Jobs

Realistically speaking, there will be no cash cheque given to Transnet for R100bil whilst any international funding from private companies will require purchasing products internationally, therefore concluding that only about 20% of the money might be spent locally if we are lucky and thereby creating roughly 32,000 jobs.

The rioting which occured, did R50bil damage but here comes the delightful anc to save the day by gifting the locals a opportunity in hope of a better life.

SA will need to be a bit more ambitious that this if it were to try make any real dent into the unemployment. with approximately 20million unemployed persons it will take investment of R12.4Trillion coupled with our national debt R4Tril + Municipal Debt R4Tril + Consumer Debt R2Tril = total investment required R20Tril.

Devil is in the detail. Who will be the majority shareholder in this endeavor? If it the ANC/Govt then tread very carefully as they untrustworthy.

Lets first get the money and than we spin a story what wonderful stuff we going to do with it – all the while the cadres nibbling on the loot.

Ja, ja, ja, Pravin, Capitalism must come to bail Communism and Socialism out again, but you and the ANC carry on with your “Comrade” revolutionist BS behaviour and policy! What more will it take!?

Starve these commie anc thieves into oblivion….the only solution!

This criticism here is not based on facts. There was an article here last year reporting that Transnet made profits

Entirely missing the point : Our Terminals are the worst performing in Africa : We are talking Operational Efficiency without which the Entire countries Exports and Imports come to a halt ?? Methinks the facts escape you Khande .

Hence they want a private partner with experience in this space. I watch their presentation. The journo also attended it.

Correction edalsg, in the World, worst performing in the World, but you’re right, Operational Inefficiency because of Cadre deployment and Unionisation of the worst kind! Government employees first job lesson should be that the ANC, the Union, the EFF, any Tribe or Faction is not their Employer, but the Taxpayer is, a fact that is just so far from their understanding right now! Durban Port will be responsible for Durban turning into a complete slum or ghost town in decades to come if something drastic is not done right away, that’s how bad it has become, the Shipping Lines are at the end of their tether with this place!

To Snowy below: I have been in the container Shipping industry for over 30 years and negotiated Terminal performance contracts in Asia ,the USA ,Europe and believe it or not ,even Portnet :
The latter was not worth the paper it was written on !!
The Lines or an APMoller (Maersk) could run our Terminals very efficiently but won’t touch our so called labour force . Amandla.

It should actually make huge profits, seeing that it is a monopoly!

It only made a fraction of the potential profits because ignorant and incompetent cadres were deployed to manage a modern port facility by even more incompetent and ignorant central planners in Luthuli House. They are hugely inefficient and overpriced. Citizens are the proud owners of about 130 bankrupt SOEs with thousands of incompetent and unproductive employees.

SOEs are the pit latrines of the economy.

Reduce govt red tape (incl. SARS Customs)

Reduce Company & Invidual income tax rates.

Get rid of incompetent staff / Scrap AA.

Restore law & order. Fire half the police force / employ competent people.

Then you don’t have to do all these things….investment will happen automatically.

“Gordhan wants Transnet to secure R100bn infrastructure investment into SA ports”

So State Capture?

Nice plans. The investment will be a challenge. Cause-and-Effect.
Fix Eskom first. It is a mess. Infrastructure and the economy need reliable power.

Fix the railway network Dbn – Jhb to relieve the truck strain on the N3
Richardsbay and Jhb as well. This includes the right moving assets too.

Only then can you look at the whole harbour network. It does not help to move the bottleneck further downstream.

It is also important to rethink the way the economy is to be re-booted.

They Deployees in the Pic all have Lifejackets on : No doubt good Planning on a Sinking Ship

Y’all preaching to the converted here. Rather go to SowetanLive or Citizen and impart wisdom there. The drivel that gets reported on those sites is shocking and needs a counter balance.

You are of course correct. Copy and paste Sensei’s comment to a corresponding article in those publications and tell us how people respond.

End of comments.

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