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Durban port upgrade and expansion project, South Africa

25th January 2013

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

  

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Name and Location
Durban port upgrade and expansion project, KwaZulu-Natal, South Africa.

Client
The Transnet National Ports Authority (TNPA) and Transnet Port Terminals (TPT), divisions of freight logistics company Transnet.

Project Description
The Durban Container Terminal (DCT) is the biggest and the busiest in the southern hemisphere and currently handles 64% of the country’s seaborne container traffic.

Transnet is implementing an ambitious expansion project at the Durban port and its container terminals, comprising several individual work packages, aimed at increasing the DCT’s container-handling capacity.

The main projects include the expansion of the DCT Pier 1, which will increase the capacity of the terminal from 700 000 twenty-foot equivalent units (TEUs) to 820 000 TEUs by 2013 and eventually to 1.2-million TEUs by 2016/17.

In addition, the North quay at DCT Pier 2 will be extended to increase the capacity from 2.1-million TEUs in 2011/12 to 2.5-million TEUs by 2013/14 and to 3.3-million TEUs by 2017/18.

Container capacity is also being created at other terminals, such as the Durban Ro-Ro and Maydon Wharf terminals, through the acquisition of new equipment, including mobile cranes and various infrastructure upgrades.

Transnet is further proposing the phased development of a new dig-out port on the old Durban International Airport (DIA) site.

Value
The project forms part of an initial five-year R110.5-billion capital expenditure programme to 2015/16 and the group’s larger R300-billion seven-year Market Demand Strategy (MDS) to 2018/19.

However, funding for the new port at the DIA is not included in the strategy.

Transnet has indicated that it is in the final stages of appointing a transaction adviser and is considering various funding options and models for private-sector participation in the project.

Duration
Ongoing.

Latest Developments
State-owned freight logistics group Transnet has reiterated that funding for the proposed R75-billion Durban dig-out port (DDOP), which is earmarked for development at the city’s old international airport site, is not included in the group’s current R300-billion capital budget and that it will have to be pursued as a public–private partnership (PPP).

Speaking at the official handover ceremony of the site from Airports Company South Africa (ACSA) to Transnet, Public Enterprises Minister Malusi Gigaba said the implementation of the “ambitious” plan would require “real and meaningful partnerships between the public and private sectors to unlock their common balance sheets for the good of our country and the economy”.

He said there was already a palpable private appetite for Transnet’s existing infrastructure pipeline, both from those domestic and foreign investors who had bought Transnet bonds, as well as from equipment suppliers and contractors.

Therefore, the expectation was that private funders and port operators would “come to the party”.

Transnet CEO Brian Molefe stressed that, while the project had not been included in the seven-year MDS, Transnet was committed to preparing the way for a project that could be packaged to private investors, possibly as a build-operate-and-transfer scheme.

The final PPP model has not yet been finalised, but transaction advisers have been appointed and should deliver options by the end of February 2013.

The consortium appointed to investigate the models include Maritime Transport Business Solutions, Arup and Van Velden Pike Attorneys.

Meanwhile, Transnet will proceed with parallel technical and environmental studies and with the community-engagement processes required before any construction can begin.

Group planning and monitoring executive Mark Gregg-MacDonald has indicated that, under the current schedule, the first four-berth phase of the project is expected to start in 2016, with commissioning proposed for 2020.

Envisaged is the four-phase development of Africa’s largest deep-water container terminal, capable of handling 9.6-million TEUs through 16 berths by 2037, incorporating an automotive terminal and a liquid bulk handling facility by 2050.

The port will complement the existing container-handling facilities at the Durban harbour, whose growth is constrained, owing to the encroachment of the city and water depth.

It will also cater for expected container volume growth, currently calculated to expand from four-million TEUs in 2010 to 20-million TEUs in 2040.

Demand for container capacity in Durban is expected to grow from 2.5-million TEUs currently to 12-million TEUs during this period.

Work is also proceeding on the legislative processes required to have the brownfield site promulgated for use as a sea port.

The proposed development has already attracted criticism from surrounding communities and environmental lobby groups, who argue that there has been too little consultation.

However, Gregg-MacDonald has said that full and thorough consultations with affected stakeholders will begin in January 2013 and that consultants will soon be appointed to conduct the environmental-impact assessment.

Although it is a brownfield site and a former international airport, there are believed to  be more than 2 000 chameleons and 11 black mambas inhabiting the areas that could be excavated for a new deep-water harbour.

Funds have not been budgeted for the project beyond the R1.85-billion allocated for the acquisition of the land from ACSA and the early-stage engineering design and environmental studies.

Once promulgated as a harbour, TNPA will automatically become the ports authority at the facility.

The promulgation process is likely to take two years to complete and will be a necessary first step before calling on the private sector to offer proposals on the development of the DDOP.

Key Contracts and Suppliers
Protekon Consulting & Construction; CPS; IMPSA-Jikelele joint venture (JV); Kalmar African National Engineering (ANE) JV; Hydroflow and Liebherr Cranes (Germany); Grinaker-LTA, Interbeton and Bafokeng Bateman Services (Bafokeng Civil Works and Bateman Materials Handling) JV; DSE and Dorbyl (subcontractors steelwork fabrication); La Spezia Container Terminal, Italy (three Liebherr cranes); Kalmar (straddle carriers); DSE (manufacture of structural components and the erection and installation of mechanical and electrical work); Protekon (planning and designing the infrastructure for the installation of the Liebherr cranes at the south terminal); Protekon Construction (two new berths for Island View terminal); Dura Piling (piling contract – Island View); Basil Read (main contractor – Pier 1, civil and paving works – DCT; Chryso South Africa (concrete products – hard standing area, Pier 1); Lafarge Readymix (design and supply of concrete – hard standing area, Pier 1); Natal Portland Cement – NPC (cement – Pier 1); Kalmar Industries (30 straddle carriers); TBA (review, analysis and simulation of DCT’s container-handling operations); Sarens Group (crawler crane); the Japan Bank for International Cooperation (loan finance); Shanghai Zhenhua Port Machinery Company (rail-mounted gantry cranes); Shanghai Zhenhua Heavy Industries Co (ZPMC)(design, manufacture, delivery and commissioning of cranes); Dredging International and Group Five (port-widening project); C3 Shared Services (codesign of security solution at Pier 1); Mott MacDonald in JV with Hatch and Goba (widening of Durban harbour entrance and construction of Pier 1 container terminal); Blue IQ (financial coordinator for proposed container terminal at the old DIA site); and Liebherr (design, fabrication, delivery, erection, testing and commissioning of the cranes).

On Budget and on Time?
The project is on schedule and within budget.

Contact Details for Project Information
ANE Durban head office, tel +27 31 579 3301, fax +27 31 579 3323 or email aned@mweb.co.za.
Basil Read, tel +27 11 418 6375 or fax +27 11 418 6334.
Bateman, tel +27 11 899 9111 or email pgm@batemanbv.com.
Chryso South Africa, tel +27 11 395 9700 or fax +27 11 397 6644.
Dorbyl, tel +27 41 408 6009, fax +27 41 408 6035 or email dorbyl@guestroauto.com.
Dredging International, tel +32 3 250 52 11, fax +32 3 250 56 50 or email dredging@dredging.com.
DSE, tel +27 11 871 4111, fax +27 11 871 4141.
Grinaker-LTA, tel +27 11 578 6000, fax +27 11 578 6161 or email enquiry@grinaker-lta.co.za.
Group Five, tel +27 11 806 0111, fax +27 11 803 5520 or email info@g5.co.za.
Kalmar Industries, tel +27 31 327 1800 or fax +27 31 327 1811.
Lafarge Readymix, tel +27 31 275 7400.
NPC, tel +27 31 450 4411 or fax +27 31 451 9010.
Sarens Group, Hendrik Sarens, tel +32 52 319 397 or
email hendrik.sarens@sarens.com.
Transnet DCT, Siya Mhlakula, tel +27 31 361 6964 or email siya.mhlakula@transnet.net.
Transnet Durban car terminal, Beverley Masson, tel +27 31 361 8702 or
email beverley.masson@transnet.net.
Transnet spokesperson Mboniso Sigonyela, tel +27 11 308 2384/2458,
fax +27 11 308 2465, cell +27 83 463 7701 or email mboniso.sigonyela@transnet.net.
Transnet Pier 1 container terminal, Michelle Philips, tel +27 31 361 6820 or
email michelle.philips@transnet.net.
TNPA Port of Durban port manager Ricky Bhikraj, tel +27 31 361 8821 or
email ricky.bhikraj@transnet.net; or public affairs department, tel +27 31 361 8527.
TPT Durban head office, tel +27 31 308 8333 or fax +27 31 308 8302; or
chief communication officer Lunga Ngcobo, tel +27 31 308 8323, cell +27 083 288 9653 or email lunga.ngcobo@transet.net.
ZPMC, tel + 86 21 58396666, fax +86 21 58399555 or email mail@zpmc.com.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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