Rail-freight parastatal Transnet has opened two newly constructed berths at the Port of Ngqura and identified capacity for 12 berth facilities in the long term.

The new berths, just 20 km northeast of Port Elizabeth, will see capacity at Ngqura Container Terminal grow to 2.2 million containers from 800 000 per annum. Ngqura – a deep-water transshipment hub which facilitates the loading of shipping containers to and from the rest of the world– now has four berth facilities.

Transnet has also purchased new equipment for the port, including two mega wax ship-to-shore cranes, 18 rubber-tyred gantries, 48 haulers and 48 bathtubs. The latest R2 billion development is in addition to the R12 billion the parastatal has already spent in developing the port.

Transnet CEO Brian Molefe told Moneyweb that once the new capacity of 2.2 million containers is realised then it might tap into more berth opportunities at Ngqura.

“There is a lot of spare capacity. Once the 2.2 million containers get used, then we will obviously expand. We have created capacity and we need to use that capacity now,” says Molefe.

On a per day basis, the port can store 70 000 containers of imports and exports of which 80% are transshipment volumes.

The added equipment, Molefe says, will enable Transnet to improve its efficiencies, as it can use the new berths as a transhipment hub for east and west Africa, as well as South America.

Already containers that arrive at Ngqura come as far as the European Union. The investment in the new berths will boost the Port of Ngqura’s strategic links with ports at Richards Bay, Saldanha Bay, Cape Town and Durban.

Transnet has been hailed as an efficient State-owned enterprise (SOE) for its investment in infrastructure, given the tainted reputation of other SOEs such as Eskom and South African Airways – which have succumbed to needing bailouts from the State.

Minister of Public Enterprises Lynne Brown supports this view, saying that Transnet continues to invest in building capacity – a strategy which other SOEs need to focus on.

“They [Transnet] adhere to their plans and they are effective in what they are doing,” says Brown.

She says Transnet’s latest effort will boost South Africa’s competitiveness with ports around the world and cement its position in the continent.

Progress on manganese terminal

Transnet will take its capacity narrative forward as it plans to spend R30.1 billion over the next seven years expanding rail and ports infrastructure in the Eastern Cape.

Commentators have noted that Transnet is a major institution wherein government’s planned R2 trillion infrastructure programme seems to be materialising – while infrastructure spend in other industries has seemingly dried up.

When Ngqura was opened in 2009, many commentators said the port may be a white elephant.

This criticism was fuelled by Transnet’s and the State’s plan to make Ngqura the export destination for manganese – a move seen as trying to rescue the fledgling port at the time. “The port is full of containers; it’s full of activity. There is even an oil rig that is being prepared, it was not a bad decision to invest in this port,” Molefe qualifies.

Transnet is in the process of moving the manganese export from the Port of Elizabeth to Ngqura, a decision which the SOE initially said may be completed in 2015/6. “We are just waiting for the issuance of the licence to the operator of the manganese terminal,” says Molefe.

The manganese terminal is now expected to be completed in 2019, depending on the issuance of the licence. It will be supported by a railway link which is operating in Ngqura.

Transnet also operates in a contentious tariff cost environment. The Ports Regulator of South Africa has raised red flags about high tariff costs in the country. It notes that Durban’s tariffs, associated with containers, are reported to be more than 800% above the global average.

Brown says her department is in discussions with the regulator to assess tariff costs.

• [Editor:Sophie]