Dig-out port – a question of timing

It’s not a question of “if ” but “when” in considering the proposed new dig-out port in Durban, according to Fanie Pretorius, representative of the SA Shippers' Council (SASC) on the National Ports Consultative Committee (NPCC). And under the present slow-down in the global freight market, he believes that “when” is not now. “The NPCC is not saying it shouldn’t happen, but rather when,” he said. “My personal opinion is that we can’t afford to put R100 billion of capital into that port at this time. Especially when a large amount of money is still being invested in upgrading the old port.” Mike Walwyn, chairman of the Port Liaison Forum (PLF) of the Cape Chamber of Commerce, agreed. “It’s definitely a question of timing,” he told FTW. “No doubt Durban will need it. But whether it’s now, with the port users paying for it now, is another matter.” Also, Walwyn felt that the slower-than-expected cargo volume growth would mean that getting a return on investment in the new port was unlikely. And all this would achieve would be even higher rates for a port which is already amongst the most expensive in the world. There are certainly reasons for the new port. One is that Walwyn estimates that there will be 15 000 trucks a day trying to move cargo in and out of Durban. “That’s not possible. So it could be said to be one justification for the new port. But is it viable right now?” Pretorius felt that the answer was “no”. The port users just can’t afford the extra costs that will come from Transnet outlaying that R100bn investment, he said. “We’ve just been hit by the Ports Regulator approving a 5.9% increase in the Transnet National Ports Authority’s cargo dues,” he said. “Add to that a 9.25% increase in Transnet Port Terminals' rates. We can’t afford to also have to pay the increased rates that will come from the new port.” The main driver of the TNPA’s cargo dues, Pretorius told FTW, is its asset value. “Its present asset base is R64bn,” he said. “The new port would more or less double that.” Pretorius reckoned that the dig-out port should come into operation in 2035-2040. “That’s much more like the time when such a massive investment would be justified.” Until then, both contacts felt that a smarter use of the available space at the old port would be a more intelligent decision.