Transnet moves to reclaim land for Durban Port expansion

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JIMMY MOYAHA: Transnet has applied to the Minister of Forestry, Fisheries and the Environment to potentially reclaim some land from the sea in Durban to expand the Durban port. We’re going to be looking at this in more detail with the chief executive officer of the Southern African Association for Freight Forwarders, Dr Juanita Maree. Dr Maree, lovely having you on the show. Thanks so much for taking the time. How much land are we looking at? How much of this land needs to be reclaimed from the sea?

JUANITA MAREE: Thank you. I haven’t studied the master plan yet, but I think it’s a beautiful development because we definitely need the berth’s deepening. And also then the berth lengthening, because we need to receive those big vessels in our shore – and that’s a very important endeavour.

JIMMY MOYAHA: Dr Maree, the larger vessels – what do we typically use those for, and what strategic advantage would that then mean for the Durban port – not just from a South African perspective, but potentially even from an African perspective?

JUANITA MAREE: Yes, I don’t think it’s a desire from South Africa to have the bigger vessels.

It is being driven by the two, or let’s say the five major shipping lines.

Because they tend to have bigger pack sizes and the bigger pack sizes are for us important because we want regular sailings from them to come to South Africa.

We have a unique system because we have a port-rotation system; we have vessels that go to KwaZulu-Natal, then to the Eastern Cape and to the Western Cape. I think that’s very important, and why we want to do the deepening and the berth lengthening – because it will help us at our geographical location to make sure that we can receive those bigger vessels.

JIMMY MOYAHA: Dr Maree, obviously in line with everything currently happening in the Middle East, the tensions around the Strait of Hormuz, this becomes a relevant conversation to have at this point around the strategic benefits of establishing more port capabilities and more capacity for South Africa.

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You mention, of course, it’s not just about the country and what we are able to benefit from, but if we are looking at potentially rerouting the world’s freight from our perspective, this could be not only for the Durban port, but this could work for all of our ports.

JUANITA MAREE: Definitely. As I said, we haven’t studied the master plan, but …

If we want to capitalise on the vessels going past, it’s important to have empty berths, because then we can get the distressed vessels; we can help them.

And then also what we can do, we as a country can offer them [inaudible] service, which we need in our port environment.

So I think it depends on what’s going to unfold over the next five years – and, as you also note, in different phases. But for us what is more important is that if they do, let’s say, the berth deepening and the lengthening, that needs to run concurrently with our land evacuation, because if you look at Durban specifically, our terminal in Gauteng can handle about 400 000 TEUs [twenty-foot equivalent units].

Now to make sure that we can handle much more on the rail network, we need to look at a new terminal to help us, because if we do the deep berthing and lengthening, and if our economy can grow as we anticipate it, we must look broader than just the waterside – if I can put it so simply.

JIMMY MOYAHA: Now, Dr Maree, you mentioned the economy growing and the estimates around this particular expansion could potentially add as much as R75 billion in annual exports. This would have a ripple effect, as you mentioned, on the inland abilities and capabilities of the economy.

But it would also mean then that if we are looking to attract foreign direct investment, that could potentially be an avenue for foreign companies, local companies, to expand their South African footprint, understanding that they would be able to get things out internationally.

I’m thinking specifically about areas like the automotive sector, where we have international manufacturers manufacturing here for international markets. That could have a ripple effect on jobs and everything else in between. Where are the risks here? How do we manage the risks and what do the risks start to look like for this kind of expansion?

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JUANITA MAREE: Your question is quite a detailed one, so let us start with a simple thing.

I think we need to look at a cohesive system of the logistics.

That would be the waterside, then the terminal, then how we evacuate the containers out of the terminal.

That will put a very strong emphasis on our rail network between KwaZulu-Natal and Gauteng, [similarly for] the Eastern Cape and Gauteng.

I think then we need to come to a different debate – to ask whether our economy can grow to the level that we want, because currently we have 0.9% [growth]. And if we really want to capitalise on the berth deepening and the berth lengthening, I think we need 3-5% growth in the economy. That falls back on our industrial policy, and whether we can capitalise on the industrial policy to help us with export competitiveness.

So I think if we get all these building blocks into a good, cohesive approach, it would definitely be the start of a new beginning in our logistics network.

But let me [mention] the last one; the logistics network cannot stand on its own because it needs to support trade growth – so if there is no trade growth, then it doesn’t really help us to expand a lot on the logistics side.

JIMMY MOYAHA: It is part of a bigger conversation – a conversation that looks at more of the value chain than simply expanding the ports. Well, Transnet has said that they are looking to invest about R125 billion in their operations and infrastructure over the next five years as they look to move from the about 170 million tonnes they presently are able to deal with from a cargo perspective to about 250 million tonnes by 2030.

We’ll leave this conversation on that note. Thanks so much to the chief executive officer at the Southern African Association for Freight Forwarders, Dr Janita Maree, for joining us to look at Transnet’s bid to potentially reclaim land in Durban for the Durban port expansion.

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