Transnet is ramping up private sector participation at the Port of Durban, seeking a private partner to construct and operate the multipurpose terminal at the port.
The private sector participation is part of the government’s wide-ranging liberalisation efforts of the country’s network industries.
Transnet National Ports Authority (TNPA) on Monday issued a request for proposals for the appointment of a private sector partner to fund the terminal set to handle fresh produce and compatible break bulk cargo for 25 years — excluding the development period.
The state-owned entity said the brownfield development will be at the Maydon Wharf precinct of the port.
Maydon Wharf is the main precinct for general cargo and has been developed in phases since the early 20th century. It extends over about 145ha with 15 berths and a capacity of
7-million tonnes of cargo annually.
“This multipurpose terminal request for proposals is a pivotal development for the Port of Durban,” said Nkumbuzi Ben-Mazwi, acting TNPA port manager for the Port of Durban. “It will enhance the port’s competitiveness to support the domestic and international supply chain while aligning with Transnet’s goals to increase cargo volumes and ultimately lead to economic growth and job creation in the region.”
According to the tender documents, the major commodities handled at Maydon Wharf are steel, sugar, rice, grain and grain products, paper and paper products, fertiliser, soda ash, edible oils and woodchips.
The precinct comprises cargo terminals that range in their handling of break-bulk, dry bulk, mixed cargo and two manufacturing plants.
“Bidders are required to submit bid responses for the right to undertake the project which entails the financing, design, construction, operation and maintenance of the fresh produce and break bulk cargo terminal and the transfer thereof to TNPA at the end of the concession period,” said the tender document.
“TNPA will permit the construction and installation of appropriate infrastructure to facilitate the efficient loading and discharging of cargo, provided that the berths are not rendered unusable to other port users.”
Transnet’s strategy has been to pursue private sector partners where the required investments are either unaffordable to Transnet alone or are complementary to Transnet’s strategy.
TNPA occupies a strategic position in SA’s transport and logistics chain, managing the eight commercial seaports, namely the ports of Cape Town, Durban, East London, Mossel Bay, Ngqura, Gqeberha, Richards Bay and Saldanha Bay.
TPNA in February put pen to paper to develop SA’s first liquefied natural gas import terminal as public-private partnership projects take shape amid a push to improve the performance of the country’s logistics sector.
The agreement will see private outfit Zululand Energy Terminals operate the terminal for 25 years, with the project expected to introduce at least 6,000MW of gas-to-power projects.
Transnet also signed an agreement with FFS Tank Terminals to build and operate a liquid bulk terminal at Richards Bay.
Transnet has a pipeline of several public-private partnership projects as it embarks on a journey to turnaround the performance of the country’s ports and rail network.
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 container terminal pier 2 (DCT2) is on hold after 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.
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.
Transnet’s CEO has defended the appointment of ICTSI — with the legal arguments having been heard last week and judgment reserved.
The government has been aggressive in reforming the logistics sector.
In December, transport minister Barbara Creecy approved the publishing of the Transnet Network Statement, a major step in facilitating open access to the country’s rail network by third-party operators — a move welcomed by the business community and industry players.
However, Transnet needs about R14bn a year of investment in its six corridors, which have been plagued by theft, vandalism and outdated systems.
In March, Creecy followed up with the launch of a request for information to “develop an enabling environment for private sector participation and enhanced investment in rail and port infrastructure and operations”.
The request for information is not a formal procurement process but a mechanism to understand and source information from the market, with the government intending to publish requests for proposals in August.
One of the corridors the request for information focuses on is the Northern Cape to Saldanha bulk minerals corridor primarily for iron ore and manganese exports.
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