South Africa’s state-owned logistics company Transnet plans to invest N$44 billion into its two port divisions over the next five years and aims to turn Durban into a “world-class” hub for container shipping.

The rail, port, and pipeline company, damaged by years of corruption, mismanagement, and infrastructure in a state of disrepair, has turned a corner.

Transnet recently posted a profit of N$5 billion for the year ended March 20222, swinging sharply upwards from a loss of almost N$9 billion in 2021.

It also received its first unqualified audit opinion from the auditor general since 2018, according to its most recent financial results presentation released on Wednesday.

Transnet’s freight rail operations account for almost half of its total revenue. But because of a steady decline in railway infrastructure due to “high incidents of theft and vandalism”, 76% of Transnet’s total capital investments have been directed towards revitalizing rail.

Over the next five years, Transnet aims to plough N$44 billion into its freight rail portfolio. That is the same amount allocated to its Transnet National Ports Authority (TNPA) and port terminals combined.

A total of N$30 billion will be invested in TNPA, which manages South Africa’s national port system in a landlord capacity, while N$14 billion has been allocated to the port terminals portfolio, which handles container and other bulk exports.

Significant upgrades have already begun at ports in the Western Cape, namely Mossel Bay, Saldanha, and Cape Town. More than N$16 billion of TNPA’s capital investment program will be spent extending breakwaters, procuring helicopters, tugboats, and cranes, and upgrading container terminals.

TNPA also recently started its process for procuring between 50 MW and 80 MW of renewable energy power at its eight ports.

Transnet’s biggest port plans involve transforming Durban into an international container hub. This includes deepening the Maydon Wharf channel to allow larger, modern vessels to enter the port, creating additional capacity for containers at existing piers, and developing an entirely new container terminal in the Point Precinct. These upgrades will triple Durban port’s container handling capacity.

The port of Durban is also set to play an even bigger role in the automotive value chain, with plans to re-engineer the ocean terminal precinct to be a “flat, open automotive footprint with optimized parking bays and a dedicated preloading facility closer to the berth per the new operating model”.

It is estimated that, over a decade, these major upgrades will cost in the region of N$100 billion.


SOURCE: Namibian

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