Transnet moves ahead to partly privatize an ailing port

By: Natasha Archary

partly privatize ailing port — Image: Moritz Kindler Unsplash

Transnet is moving ahead to partly privatize one of its ailing ports at the Durban Container Terminal Pier 2.

A Manila, Philippines company, International Container Terminal Services (ICTSI) is the preferred bidder to take on the joint venture to develop and upgrade this port.

Joining Gugulethu Mfuphi on Kaya Biz is Kaya 959 presenter Sizwe Dhlomo and Andrew Pike, Head of Ports, Transport and Logistics at Bowmans.

The 25-year deal will mean ICTSI partners with Transnet Port Terminals (TPT) to overhaul the biggest container terminal, which handles about 72% of the Port of Durban.

This port manages about 46% of South Africa’s port traffic.

“Transnet has decided to bring in a new partner which is a big player, covering 6 continents. The important thing to remember with logistics, because a lot of people are questioning why a company from the Philippines, is that you need the expertise, yes, but you also need the network.

This is about more than just a point of departure in terms of Terminal Pier 2, you also need the destination, for example if you need to move product to Singapore, it’s not enough that you have port space just in Durban, it’s a matter of having that connection to be able to bring that product into Singapore.”
Sizwe Dhlomo explains why a Philippine company is the preferred bidder to partly privatize one of Transnet’s ailing ports

While the move by Transnet to partly privatize the port may be a step in the right direction, Andrew Pike believes there’s still a lot left to be done to improve logistics in South Africa.

“In my view this is just Stage 1 in unlocking this particular bottleneck at the Transnet, and perhaps the biggest concern is to get rail working again.

There is a tender out for a long-term operating lease for the Gauteng-KZN rail corridor, but that’s still in its infancy.

We know just how much the network is being constantly sabotage and vandalized, so those are some of the issues.

On the other hand we have the road freight industry which is currently also facing negative ramifications, and until we’ve got rail working, road freight is going to be strained.”
Andrew Pike, Head of Ports, Transport and Logistics Bowmans

ICTSI is one of the biggest container terminal operators in the world and manages 34 terminals in 20 countries including ports in Australia, Indonesia, China, Mexico and Brazil.

The finalisation of the process follows approvals from government in terms of the Public Finance Management Act (PFMA), Transnet said on Monday.

Listen to the conversation on Kaya Drive:

Also read: Transnet ventures into privatization with major port operator

Written by: Natasha

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