During three months of 2001, delays and congestion at Durban's container terminal cost them around R300m, claim shippers. So as they struggle to move ever-increasing cargoes in SA's present export boom, they wax enthusiastic about government's intention to privatise selected port operations.
First on the list for concessioning, is the clogged Durban terminal run by SA Port Operations (Sapo). Invitations for concessionaires to bid are scheduled for the first quarter of 2003.
"There is still limited capacity in some of the other ports, but Durban's container terminal arguably has reached saturation point," says P&O Nedlloyd Southern Africa MD Barry New.
New believes the terminal's privatisation is a necessity. "The inward investment that will be required to develop and sustain the viability going forward will depend to a large extent on privately funded expansion," he says.
Dave Rennie, chairman of the Container Liner Operators Forum (Clof), says some of SA's ports do run smoothly. "You've got to split them into their various functions," he says. "Some are extremely efficient. Richards Bay exports 80 Mt of bulk/year. No-one can claim that the privately operated coal terminal in Richards Bay doesn't work efficiently."
But Rennie agrees that there are problems at Durban. "The container terminal has capacity problems. Container exports in particular have grown dramatically in the past few years and the infrastructure and equipment has not had the type of money spent on it over the past 15 years to keep up with those exports. So the port of Durban does suffer congestion."
Clof focuses on operational issues of concern to all container lines calling at SA ports: inefficiencies, low productivity, congestion and operating practices.
"The concerns of container lines are any form of congestion, anything that's going to disrupt their normal schedule and increase costs," says Rennie, confirming that Clof shippers were down R300m in just three months last year because of congestion at Durban.
In a vigorous transformation process last year, parastatal Portnet gave way to two new bodies: the National Ports Authority (NPA), to be landlord, regulator and provider of safe ports; and SA Port Operations (Sapo), to run the ports. Both fall under Transnet, though the NPA bill will see this body regulated by the transport department with the public enterprises department as stakeholder.
Of R45bn scheduled by Transnet to address national infrastructure backlog over the next 10 years, more than half will go to South African Airways for its fleet-renewal programme. NPA will get R7,2bn, a sizeable chunk of which will be spent building the new harbour at Coega in the Eastern Cape.
Transnet's headline earnings soared from R838m to R3,35bn in the year to March 31. NPA's contribution, due to increases in value and volume of cargo handled, was a net profit of R2,2bn. Sapo's net profit was R67m.
This combined NPA and Sapo profit of almost R2,9bn was R1bn up on the previous year under the Portnet banner.
Container flow through all SA ports to March 31 totalled 1,9m units (1,8m in 2000/01). Of the 1,9m, 1,2m passed through Durban.
The trend to privatise port operations is a global one. Regular investment is needed for upgrading, improvements and capability expansion to cope with trade growth. Conveniently for governments, it's the concessionaires that generally provide the funding.
It's about efficiency. Container operators need to get their ships in and out of port quickly. Congestion disrupts schedules - with "skipping" a clogged-up port being the only way to keep on time.
Dave Giraudeau, MD of MOL - formerly Mitsui OSK Lines - says the "huge problems" at Durban mean that 25% of MOL's vessels are skipping or "cutting and running" - collecting only priority cargo - from the port at present. "We've got to maintain schedule integrity, otherwise all our following ports would be affected," he says.
MOL's container ships ply between Asia and South America. On the eastward voyage from South America, they berth first at Cape Town, then move up the coast.
"Seeing the logjam at Durban, they skip it and move straight on," says Giraudeau.
Giraudeau says it costs US$18 000- $25 000/day to run a vessel. "Skipping means lost revenue for us. Plus there's the cost of containers sitting in Durban doing nothing."
Under the proposed privatisation, the NPA will allocate berths to a concessionaire to run as a private terminal. Current thinking is that half of Durban's container terminal will be privatised; the other half being retained by Sapo to create a competitive environment.
"I'd prefer an option," says Giraudeau. "MOL is in favour of privatisation, but I don't believe that any one shipping line should own a private terminal. Concessionaires should be either a consortium of shipping lines or a recognised port operator."
It would cost Transnet R6bn to bring Durban port up to speed. Sixty straddle carriers have been ordered. Seven gantry cranes were on Transnet's shopping list, but the order has been reduced to four.
