FFS Tank Terminals will operate the liquid bulk terminal at the Port of Cape Town over the next 25 years, after Transnet National Ports Authority (TNPA) chose the company as the preferred bidder to run the terminal, as the state-owned entity ramps up private participation at SA’s ports.
On Thursday, TPNA said the appointment of FFS Tank Terminals, which is already the existing terminal operator at the port’s liquid bulk precinct, is a “strategic move to enhance the Port’s efficiency and competitiveness”.
“FFS Tank Terminals is a Level 1 B-BBEE contributor, brings over 20 years of expertise in the liquid bulk sector, specialising in handling products such as heavy fuel oil and edible oils. The new concession agreement is set to inject an investment of R195m into the facility, enabling terminal infrastructure refurbishment and upgrades that will substantially enhance operational efficiency,” TNPA said in a statement.
“TNPA is implementing a phased approach with the appointment of terminal operators for the Port of Cape Town’s Liquid Bulk Precinct. While all the terminals are currently operational in the precinct, more terminals are anticipated to undergo the concession process in the new year, in compliance with the open and transparency requirement of the National Ports Act.”
FFS’ terminals receive and dispatch products via vessels and road tankers. Vessels are received at common user berths, which are operated by TNPA.
The company owns, manages and operates two storage tank facilities in Cape Town, Western Cape and Evander, Mpumalanga, according to its website.
TNPA acting port manager for the Port of Cape Town Ophelia Shabane, said the selection of FFS Tank Terminals as the preferred bidder solidifies TNPA’s commitment to ensuring continued liquid bulk operations and security of supply, coupled with growing port capacity and volume throughput.
“This transaction will not only support economic growth and development at the Port of Cape Town but will also stimulate the local economy through commitments made by the bidder such as job preservation, employment creation, local supplier development as well as skills development,” Shabane said.
Earlier this year, the Port of Cape Town and the Port of Durban were ranked in the lowest 10 of the worst-performing ports in the world, with the former ranked the lowest of the 405 surveyed by the World Bank.
Transnet has refuted the methodology used for the rankings. However, work is under way to bring in private sector partners to help improve efficiencies.
The biggest private sector participation across SA’s port network has been delayed by a legal challenge launched by the losing bidder.
The R11bn deal put on the table by Philippines-based International Container Terminal Services Incorporated (ICTSI) to operate Durban pier 2 terminal (DCT2) is on hold following a challenge by APM Terminals, the port operating company of Danish logistics major AP Moller-Maersk.
At the heart of the legal challenge is that Transnet erred in allowing ICTSI to calculate its solvency ratio using its market capitalisation to secure the 25-year contract to develop and manage the Durban container port. This decision, which inflated ICTSI’s solvency from 0.24 to the required 0.4, was made despite internal and expert advice warning against it.
ICTSI was the only bidder to use its market capitalisation to prove it met Transnet’s solvency requirements to qualify for the tender, which saw it comfortably pass the solvency condition.
In July 2023, Transnet declared ICTSI the preferred bidder for the 25-year joint venture to develop and operate DCT2. The DCT2 project is the cornerstone of SA’s infrastructure, pivotal for economic stability and growth. DCT2 is Transnet’s biggest container terminal, handling 72% of the Port of Durban’s throughput and 46% of SA’s port traffic.
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