Two new container berths were officially opened at the Eastern Cape port of Ngqura earlier this month (Monday 9 March). This brings to four the container berths now in service at the port, in which Transnet has so far invested no less than R14 billion. The port is also open to deep-water ships with draughts of up to 14.5 metres, having water dredged to a depth of -16 metres alongside the four berths. This means that fully loaded ships with up to 10,000 TEU on board are able to call at the port.
The new section opened last week increases the capacity of Ngqura from 850,000 TEU to 1.5 million TEU, making this the second biggest container terminal, in terms of capacity, after Durban. In the 2014 calendar year Ngqura handled a total of 705,377 TEU, indicating that the container terminal was close to capacity.
The opening of the two berths was performed before a gathering of selected guests including the heads of a number of port stakeholders, including shipping line executives. The Minister for Public Enterprise, Ms Lynne Brown, to whose department Transnet reports, described the investment as significant.
“It strengthens the terminal’s capability to handle larger container vessels, improve efficiencies, vessel turnaround times and customer satisfaction. It also ticks various crucial boxes in our government’s developmental agenda while boosting the Eastern Cape’s role in the broader economy,” said the minister.
She said she was pleased that the port has contributed towards job-creation in the area of the Eastern Cape. “To date, more than 825 permanent jobs have been created since the operationalisation of the Port in October 2009. The creation of decent jobs remains a high priority of Government.
“The port has also contributed towards the transformation of the economy. To date, the port’s procurement spend is recorded at R900 million of which R740 million is Broad-based Black Economic Empowerment spend. The transformation of the economy remains a priority area. We cannot undermine our investment towards building and developing our black suppliers. The creation of strong black industrialists shall remain top of the agenda of our government.”
Transnet has received praise from several quarters for its role as an efficient state-owned enterprise and for its investment in infrastructure. Compared with some other state-owned enterprises such as SAA and Eskom, Transnet has an impressive record with major infrastructural programmes aimed at creating capacity ahead of demand instead of trying to catch up afterwards.
What is noteworthy about this is that while other state-owned enterprises are appealing for bailouts or other assistance from government, or asking for drastic increases in tariffs, Transnet set about funding its build programme on the strength of its own balance sheet, which it has successfully achieved without government guarantees since 2005.
The minister said it was a significant milestone that Transnet has achieved in its drive to develop the Port of Ngqura into a transhipment hub in the Southern Hemisphere. “This achievement will certainly increase the chances of South Africa to improve its competitiveness, especially in relation to other ports in the continent which are in direct competition with South Africa for the movement of freight in the global markets. It will also contribute greatly to the integration of our country with the rest of the region and continent,” she said.
Brown pointed out that the port has also benefitted from being an Industrial Development Zone. “Its designation as a special economic zone has supported a broader-based industrialisation growth path in South Africa, while helping the country achieve the objectives as outlined in National Development Plan (NDP). It has supported a balanced regional industrial growth path by fostering the development of more competitive and productive regional economies. We have seen investments in the labour-intensive area in order to increase job creation, competitiveness, skills and technology transfer and exports of beneficiated products.”
In addition to the construction and opening of the two berths the terminal has been equipped with two additional ship-to-shore cranes, 18 rubber tyre gantry (RTG) cranes, 48 haulers and 48 bathtubs (special trucks and trailers designed for moving containers about the terminal).
Of the 70,000 containers handled at the terminal last year, Transnet says 80 percent of them were transhipment boxes, intended for other ports elsewhere and being transferred via Ngqura. Transnet Port Terminals, which is the terminal operator at the port, is focusing on promoting the port as a transhipment centre rather than as a destination port. A certain percentage of the transhipment cargo already being handled involves containers redirected from other ports and while this is not ‘new’ business for Transnet and South Africa, it helps relieve the pressure on the destination ports such as Durban and Cape Town.
Brian Molefe, chief executive of Transnet Limited said earlier that the new berths would help market Ngqura as a transhipment centre to ports in east and west Africa as well as in South America.
The port of Ngqura was originally designed to handle bulk commodities but has been stymied in that the adjacent Coega Industrial Development Zone (IDZ) never succeeded in attracting an ‘anchor tenant’ until the idea of the container terminal was put forward. Various schemes of building smelters at the IDZ were explored but none came to fruition. Efforts meanwhile to relocate the manganese exports from the nearby Port Elizabeth harbour were stonewalled because of lease factors – those holding the leases to use the manganese terminal at Port Elizabeth were reluctant to give them up before their expiry dates unless the leases were ‘bought out’ by Transnet, which it in turn was reluctant to do.
When the Port Elizabeth manganese terminal is finally vacated in a couple of years’ time it will have to be cleaned up environmentally – after many years of having manganese stored on site this will be a costly exercise. Nevertheless, this will have to be performed and in the meantime Transnet is proceeding with plans for developing a new manganese berth and terminal at Ngqura which will considerably increase the capacity for exports.
The port will then presumably also be able to handle other ore commodities if required.
According to Molefe, Transnet is waiting for the licence to develop the terminal which will be supported by a rail link from the Eastern Cape railway network.
To handle the longer and heavier trains that Transnet sees being used to transport manganese and other ores to Ngqura, the railway inland to the Northern Cape will have to undergo considerable and costly upgrading. This will include strengthening the culverts and bridges for the heavier trains and lengthening the crossing loops which are mostly in railway stations along the way. Molefe said that Transnet will be investing R30.1 billion over the next seven years expanding the rail and port infrastructure in the Eastern Cape.
It’s also possible that ship repair may develop organically in the port. Already Ngqura has handled several oil rigs for repair and maintenance and one is currently moored within the port right now undergoing similar treatment. This involves specialist ship repair firms having to fly personnel in but it also invariably leads to the development of a local industry and skills as well.