Freight logistics group Transnet has concluded a R1.8-billion property deal with fellow State-owned company (SoC) Airports Company South Africa for the acquisition of the former Durban International Airport (DIA) site, which Transnet aims to develop into a new port over the coming years.
Transnet CE Brian Molefe reported on Tuesday that the much-anticipated transaction had been concluded ahead of the two SoCs’ financial year-ends of March 31, 2012. However, the deal still required sanction by the competition authorities. The Competion Commission had recommended that the transaction be approved by the Competition Tribunal without conditions.
Transnet National Ports Authority (TNPA) had indicated previously that it planned to pursue a so-called ‘dig-out port’ at the DIA site and the project was likely to involve an initial investment of some R50-billion.
Molefe confirmed in an interview with Engineering News Online that TNPA would proceed with the development in collaboration with the private sector under its so-called private sector participation (PSP) scheme.
Therefore, only a small portion of the R47-billion capital budget that had been set aside for TNPA under the group’s larger R300-billion, seven-year investment programme would be directed towards the project and the environmental studies that would be required to proceed with the development.
Nevertheless, the project could move ahead as a PSP during the seven-year period, running from the group’s 2012/13 financial year through to 2018/19.
In fact, Engineering News Online established separately that Transnet, which had more or less excluded major PSPs from its Market Demand Strategy, was working on a new version of its PSP in a bid to facilitate complementary private-sector infrastructure investments of as much as R150-billion.
“The biggest PSP that will ever happen in this country is going to be on the DIA site . . . which we hope to dig out and develop into a port,” Molefe said in an interview.
“The money for the development of that port is not in the R300-billion,” he added.
A process was being designed for a build-operate-and-transfer-type development of the port and associated terminals and the details should emerge either during the course of the current financial year or during 2013/14.
“Quite a lot of work needs to go into this . . . but definitely during the next financial we expect this project to go out on tender.”
The project would take 10 to 15 years to develop, but Molefe expects the first shovel in the ground within “five to six years time”.