Transnet to review port leases to favour disadvantaged

Transnet to review port leases to favour disadvantaged

FMCG SUPPLIER NEWS

Business Live - Jul 5th 2012, 09:47

Transnet would no longer automatically renew leases for facilities used by established companies in the maritime sector at its ports. 

Instead, the state logistics company would strive to include the previously disadvantaged in its supplier development programme , Herbert Msagala, chief operating officer of Transnet Port Authority, told the South African Maritime Industry Conference in Cape Town yesterday.

“As the leases expire, one of our responsibilities is not just section 36 open tenders, but to create a balance between monopolising old players and creating a partnership with industry captains to stimulate the growth environment.”

Msagala said Transnet Port Authority would place these leases up for open tender with one of the evaluation criteria being to drive the supplier development programme.

He also said of the R300bn that Transnet had budgeted for its infrastructure build programme, R201bn was meant for the railway system, R81bn would be used for port and pipeline development - with R41bn of this specifically earmarked for port development. The latter work included the deepening of the Durban container terminal so that larger and fully loaded container ships could have access to it.

“This is part of our critical criteria to build capacity ahead of demand,” he said.

CEO of Ocean Africa Container Lines Andrew Thomas urged Transnet not to slow the R300bn infrastructure investment, particularly the development of ports, so that the country does not miss out on the next commodity boom.

Thomas said the mistake made in 2007-08 should not be repeated. “In that year we realised that the commodity boom cycle was slowing and the investment in infrastructure slowed too. Now we are seeing a slowdown in the cycle again, but when times are quiet it is a good time to buy the assets required and do the things we need to do to ensure we heed the next commodity cycle. As we know commodities always work in cycles,” he said.

Thomas praised the government for the level of discussion it was prepared to entertain with industry, but criticised industry for not capitalising on opened channels.

Xolani Mkhwanazi, president of the Chamber of Mines and chairman of mining group BHP Billiton SA, said transport costs were the biggest constraint in the operations of the mining sector. “Transport costs make up 80% of the price of the mining sector’s raw materials ,” he said.

Mkhwanazi said that the mining industry exported 180-million tons of raw materials every year, but that this could increase to about 200- million tons a year once the port and railway infrastructure has been improved.