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 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, to increase 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 to 1.2-million twenty-foot equivalent units (TEUs) by 2016/17.

In addition, the North quay at DCT Pier 2 will be extended to increase capacity 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, among other projects.

Value
The project forms part of an initial five-year R110.5-billion capital expenditure programme until 2015/16 and the group’s larger R312.2-billion (from R307.5-billion) seven-year Market Demand Strategy (MDS) until 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
The TNPA is pressing ahead with its investment under Transnet’s MDS, despite poor economic growth.

The TNPA board has approved the R70-million upgrade of Pier 2 at the Durban Container Terminal.

Durban port manager Moshe Motlohi and Durban Chamber of Commerce and Industry president Zeph Ndlovu have highlighted the importance of investing in “South Africa’s flagship port” if it is to remain competitive and reclaim its place as the second-largest port in Africa.

In light of ongoing port upgrades in Africa, the Port of Durban is now ranked first in sub-Saharan Africa, but has slipped to third in Africa and fourth in the southern hemisphere.

Noting that the Chinese are actively and aggressively investing in African ports, Ndlovu has warned that the Port of Durban cannot rest on its laurels. “We must press ahead with the MDS to retain our competitive edge. If we postpone investment, it will be at our own peril,” he warned.

He has noted that it is difficult in current economic times to supply additional capacity ahead of demand. However, he says decision-makers have to move beyond “just looking at accounting percentages”. Durban will need 25% “headroom” if it is to respond to challenges from other ports in Africa. 

He also says that the existing port needs to optimise capacity and “sweat” its infrastructure and assets before it can call for more investment.

Although the TNPA says the Durban Dig Out Port will be delayed by several years, it does not specify by how many. 

Motlohi has said the Durban port will increase container capacity by 2022/23, owing to improvements at Pier 2 and the Salisbury Island infill, which has also been approved. This will be enough until 2025, if not 2030. Current capacity of about 3.1-million twenty-foot equivalent units (TEUs) will increase to 5.4-million TEUs.

The TNPA expects to create and sustain 95 200 direct and indirect jobs in Durban. The latest estimated growth for 2015/16 is 6.9%.

The growth of the port hinges on several aspects, including customers and shareholder centricity: “Meeting demand will retain volumes and attract new business, which will generate revenue to continue investment in infrastructure, as well as sustain the ports contribution to the region’s economy,” he has stated.

He adds that improving port efficiency at terminals and marine services will increase the smooth and effective flow of cargo and lower the cost of doing business.

“Money alone will not solve problems. It is not just about pouring concrete and steel,” has pointed out, adding that integration is important and that different divisions can no longer operate in silos. In addition, through its smart ports strategy, TNPA will work very closely with external stakeholders, such as continuing to engage with trucking companies to optimise time management and iron out “peaks and valleys”. 

Motlohi says that capital investment in the Port of Durban over the next seven years will be about R24-billion.

Turning to the Salisbury Island infill, Motlohi has stated that the north quay will be lengthened to the sandbank to accommodate three ships instead of the current two. He says an agreement has been reached between TNPA, the City of Durban and the provincial Department of Environmental Affairs with regard to mitigating the environmental impact of the project, with TNPA tol build a new sandbank.

Meanwhile, work on berths 2, 5, 6, 7, 8 and 10 have been completed at Island View. Upgrades of firefighting infrastructure is under way and due for completion in March 2018, while the upgrade of Berth 1 is in the feasibility stage. Work is expected to start in mid-2016 for completion at the end of 2019.

The upgrade of Berth 4 is expected to start in mid-2021 for completion at the end of 2022.

Further, Durban’s fleet upgrade is well under way, with the new Ilembe dredger expected to arrive on January 15. The first new tug will be delivered in August 2016 and the second in November 2016.

Key Contracts and Suppliers
Protekon Consulting & Construction; CPS; IMPSA-Jikelele joint venture (JV); Kalmar African National Engineering, or 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, or 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, or  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); Liebherr (design, fabrication, delivery, erection, testing and commissioning of the cranes); and Stefanutti Stocks AXSYS JV (Mayden Wharf – main contractor).

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 or 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 Port Terminals, tel + 27 31 308 8000 or fax +27 31 308 8084.
ZPMC, tel + 86 21 58396666, fax +86 21 58399555 or email mail@zpmc.com.