Efforts by the port of Maputo in Mozambique to win business from SA's overstretched ports are likely to be stepped up with the purchase of effective control by Grindrod, the SA transport group whose activities include freight, shipping and logistics.
Grindrod has built up a 48% share in the international consortium that owns 51% of the concession to run the port. After buying into the concession for the first time in 2006, it raised its share to the current level in October when it bought out the stake of Swedish construction group Skanska.
WHAT IT MEANS
 Grindrod has effective control of the port
Cargo tonnages could more than treble
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Grindrod executive director Dave Rennie says the company has to date invested about US$100m. He would like a situation "where we or a like-minded partner can control the port concession outright, which will allow us to work with the government of Mozambique to maximise the port's value". But he adds that no finality has yet been achieved on further acquisitions.
However, other consortium members say they expect their SA partner to go above 50% soon.
The Maputo Port Development Company was granted a 15-year concession to run the port in 2003, with the option later for a further 10 years. The consortium, whose other members are the UK's Mersey Docks and Portuguese terminal operator Liscony, holds 51% of the company. The Mozambican government has 16% and national rail company CFM - Caminhos de Ferro de Mozambique - the other 33%.
The port's MD, Ron Herman, says the active involvement of an SA company is good for confidence. Shareholders plan to spend $250m-300m developing the port over the next five years - though Rennie says that is a "conservative" estimate. Nearly all the money is likely to be raised from SA banks.
Herman says: "For banks to invest that kind of money, they must have confidence in the port. Grindrod is a local, influential company, which will give the banks a greater sense of security."
The change in ownership comes as Maputo gears up to at least double its business over the next five years. In 1972, the port was handling 17 Mt of cargo annually. By 2003 - after the long civil war that destroyed the country's infrastructure and frightened off investors - this was down to 2 Mt. Herman says the figure is already back at 8 Mt and the plan is to hit 15 Mt by the end of the current investment cycle.
But he adds: "That may sound impressive but in almost doubling our capacity we are going back to where we were over 30 years ago." Rennie believes the port has "easy potential" to eventually handle up to 30 Mt.
Planning and infrastructural development to meet these targets is already under way. By March the railway line from Maputo to the SA border will have been upgraded to the same standard as that on the SA side. About R2m has been spent on improving the road on the Mozambican side.
The two countries have committed to opening the Lebombo border 24 hours a day instead of the current 16 hours, by 2009. There is also agreement in principle to making Lebombo a single border post where travellers and freight hauliers will no longer have to pass through two sets of customs and immigration. SA is likely to pay up to R600m of the R900m the new border crossing is expected to cost, and Mozambique the rest.
The aim is that trucks should take no longer than 24 hours for the round trip between Johannesburg and Maputo.
At the port itself, the first 34 000 m² phase of an import-export car terminal that is eventually planned to have annual capacity for 250 000 vehicles has been completed and tested. Work has started on upgrading the coal terminal.
Other immediate priorities, says Rennie, include dredging and widening the harbour channel to allow entrance to giant panamax vessels (so called because they are the maximum size to fit through the Panama Canal). This requires a depth of at least 14 m.
According to Herman this will be accompanied by the reconstruction of berths. Future development will include upgrading the bulk terminal and storage sheds, and investment in cranes, forklifts and heavy moving equipment.
All this is good news for SA businesses which, in the past, have had little alternative to the ports of Durban and Richards Bay, both of which are stretched to capacity.
Durban has become particularly notorious for bottlenecks. The situation has been made worse by unreliable rail services to the port. Though state transport operator Transnet has committed to improving rail and port activities, Maputo is a tempting alternative. Not only that, but companies using it say the port is more user- friendly.
Vehicle and components companies have expressed particular interest in Maputo. BMW SA has been a vocal supporter - as long as the port can improve infrastructure and accessibility. Even Durban-based Toyota, which exports more than 100 000 vehicles annually through its local port, has admitted Maputo holds attractions for imports.
But Herman says the motor industry is only one of many targets. "We want to service what we consider the hinterland of the port. In SA, that means Gauteng, Limpopo and Mpumalanga. There are cargoes going through Durban and Richards Bay that are natural for Maputo, such as steel, ore, fruit and forest products from Mpumalanga. Of the 400 000 pallets of oranges exported from Mpumalanga each year, 300 000 go through Durban. It must be cheaper and more efficient to use Maputo."
Brenda Horne, CEO of the Maputo Corridor Logistics Initiative, says the rail distance from Johannesburg to the port is 581 km, compared with 647 km to Richards Bay and 714 km to Durban. From Witbank, it's 437 km to Maputo and 819 km to Durban; and for Polokwane, the distances are 550 km and 935 km respectively.
The advantages are even greater for Zimbabwe and Swaziland, which are also targeted by Maputo. Swazi exporters face a 228 km rail trip to Maputo and 544 km to Durban. If the Mozambique rail improvement lives up to its promises, Maputo's attraction will be even greater. Horne adds that potential customers may also be attracted by the fact that more international shipping lines are showing an interest in using Maputo.
Both Rennie and Herman are keen to play down the idea that Maputo is intent on direct competition with Durban and Richards Bay. "Importers and exporters need another gateway," says Rennie.
Herman agrees: "We want to take the overflow, to take up the slack. By attracting the goods that it makes sense for us to be handling, we will ease their congestion."
Though Transnet has announced plans to improve capacity and services at Durban that it says will make some Maputo investments unnecessary - particularly the car terminal - it also says it welcomes initiatives to complement its own harbours.
Not everyone shares this brotherly respect, though. "Anything that will create competition and give us an alternative to the service offered by SA ports - which, frankly, is bloody awful - is to be welcomed," says the MD of a major exporter.
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