SOUTH AFRICA’S NEW MARITIME POLICY AND PORTS DEVELOPMENT

By Nicola Nel Sunday, June 04, 2017
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The Department of Transport has now finalised its Comprehensive Maritime Transport Policy (the CMTP) for South Africa, which was due to be gazetted this week. The overarching aim of the much anticipated CMTP is to facilitate growth and development of South Africa’s maritime transport system in support of socio-economic development of the country whilst contributing to international trade. The policy broadly defines “maritime transport” as “an integrated system that involves the design, construction, operation, management, servicing and maintenance of merchant, leisure and other ships in the service of seaborne trade” and also contemplates overland logistics corridors facilitating the movement of people and goods through port connected road and rail infrastructure.

The CMTP has been a long time in the making following release of the government’s White Paper on National Transport Policy in 1996. It aims to address issues such as transport costs efficiencies, the lack of an established South African merchant fleet and South Africa’s relatively weak import / export trade and how to grow employment opportunities in the sector. One of the areas which the policy focusses on is port infrastructure, planning and management, where the current policy regarding the regulation of the South African Ports system is the Commercial Ports Policy of 2002. The new policy recognises that, given their strategic nature in boosting the economy, ports require “massive investment in infrastructure, innovative technology, proper management and a clear understanding of their evolving role in a globalising world economy.” The following actions are contemplated by key statements regarding ports development as contained in the draft policy:

  1. A review of the 2002 Commercial Ports Policy;
  2. The introduction of a port land use spatial planning framework;
  3. The introduction of instruments for monitoring and evaluating private sector participation in commercial ports;
  4. Monitoring the competitiveness of South African ports.

Although broadly framed (as is the case with much of the CMTP), these ambitions are relevant and encouraging and are to a large extent already reflected in the current Durban port upgrade and expansion project, as well as the possible phased development of the intended dig-out port at the old airport site in the future. As far as the former developments are concerned, Transnet is in the process of increasing container capacity in the Port of Durban at the Durban Container Terminal, Maydon Wharf and the Ro Ro terminal. Berths 13 and 14 at Maydon Wharf have recently been reconstructed and deepened so as to allow safe berthing of larger ships with greater container capacity. This is part of a R1.5 billion project to deepen 6 berths at Maydon Wharf. This reconstruction is to be welcomed as a positive development given that the youngest berth in this area of the port is 42 years old. Transnet further aims to deepen berths 203 to 205 at the DCT so as to allow for increased capacity. Accordingly to Engineering News, should the deepening (and lengthening) of these berths go according to plan, it will be possible for the DCT to handle three 350m vessels at once. With the dig-out project on hold, the combined port expansion project for Durban aims to increase the DCT’s container capacity by 1.7 million TEU’s.

Proactive and continuous development of port infrastructure ties in with one of the most important goals of the CMTP, namely the importance of transport costs efficiencies and economies of scale. The policy recognises that the operation and costs associated with larger ships will always be cheaper than smaller ships and that this creates a financial incentive to invest in the necessary infrastructure to handle megaships. One also needs to take into account the global economic outlook for shipping in the future: while the industry has certainly seen better days in terms of freight rates and a drop off in shipping demand, one can expect there to be a significant upswing in the cycle in the years to come. The fact that commodity prices are on the increase is also good news in this regard. While the dig-out project has been placed on hold due to the massive capital investment involved (as well as concerns as to whether such an amount of capacity will in fact be required in the near future) the expansion of facilities shows that Transnet is taking a proactive stance in increasing the existing capacity of the Port of Durban.

The fact that the CMTP recognises and addresses the issue of port development and the need for investment in this area is positive and promising for the future. That said, much of the ambitions are broadly stated and the local industry would benefit from a more targeted and action–driven document providing further clarity particular aspects such as project finance, management and the participation of the private sector.