Ship repair facilities offer ‘underwhelming’ opportunities

The port authorities are trying to get rid of eight ship repair facilities – and the words that immediately did the rounds, especially in the port city of Durban, were “privatisation of port facilities”. But, effectively, nobody’s buying anything. “It’s not privatisation,” said Rob Deane, MD of Elgin, Brown and Hamer. “It’s not an acquisition exercise. They’re looking for someone to pay them money to lease the properties and to operate the facilities.” And, in a lot of other “off the record” chat with FTW, the private sector shipbuilding and repair industries seem to be looking on it as a bit of a duff deal. Another senior ship repair executive described the facilities to FTW as “a lossmaking bloody shambles which Transnet doesn’t have a clue how to run; and an absolute mess, where nothing works”. The problem, he added, was that the TNPA didn’t have the capital to sort things out, and came up with the bright idea of “concessioning” the facilities. Not that it’s new. The concessioning concept was devised when Maria Ramos was still in charge of Transnet, but the practical application of the scheme has stuttered along for the past four to five years before it was finally triggered with various newspapers carrying the notice of the offer recently. In terms of this notice, harbour landlords Transnet National Ports Authority (TNPA) invited interested parties to submit requests for proposals (RFPs) to become the operator or operators of existing ship repair facilities in a number of South Africa’s ports. And there are eight facilities up for offer. The Durban Prince Edward graving dock; the Durban floating dock (which FTW has been told is currently out of order, is in a badlycorroded condition, and has also had a major fire in its electrical installation); the Cape Town Sturrock dry dock, Robinson dry dock and Cape Town synchrolift; the East London Princess Elizabeth dry dock; the Port Elizabeth slipway; and the Mossel Bay slipway. According to Transnet’s Nico Walters, who is handling the technical matters surrounding the deal, the TNPA is holding a compulsory briefing session in Durban on March 15. This, he added, will only be attended by those parties that have purchased RFP documents. He also confirmed that compulsory site visits were scheduled for March 16-31 – and that the closing date for RFP submissions was June 29. Walters also pointed out that the TNPA notice advised that preference would be given to broadbased black economic empowerment (BBBEE) compliant companies. Not that this purely restricts the offer to companies on the local scene. “The advert has gone out both locally and internationally,” he told FTW. “But we’ll only know if there is any international interest once all the RFPs are in.” But what is the interest on the SA scene? “Yes, we’ll definitely participate,” said a senior industry spokesman, indicating that all the major local ship repairers would have an interest in this development. “But,” he added, “We’ve very little faith that a common user facility will succeed.” Louis Gontier, MD of SA Shipyards, had a similar suspicion. “Basically, we feel that this TNPA scheme as its envisaged should not go ahead,” he told FTW. “because if the docks fall into the hands of one individual it would just create a monopoly – with all its dangers.” That fear is shared by all. “The model we’d like to see,” said our anonymous executive, “is a holding company – with everyone who wants to be involved putting in a share of the funding.”