Coega fills need for deep-water port, says Safmarine chief

Posted On Friday, 17 September 2004 02:00 Published by eProp Commercial Property News
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Durban - South Africa needed a port with deep-water access, and Coega was an important development in this regard, Ivan Heesom-Green, the chief executive of Safmarine, has said.

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"I see merit in Coega. We need it to handle growth," he said, adding that despite the long distances between the new port in the Eastern Cape and the manufacturing centres of Gauteng and Durban, the port would be viable.

"The inland links to Gauteng can be improved and the Eastern Cape itself is a manufacturing centre, particularly for the automotive industry.

"I see a lot of opportunity for Coega to trans-ship containers, in other words goods not from or destined for South Africa.

"We need a port on the South African coast that can provide direct deep-water access to the sea for the next generation of container vessels," he explained.

Safmarine, since being acquired by AP Moller-Maersk in 1999, has extended its operations to 131 countries and operates a fleet of more than 40 owned and chartered ships.

Safmarine contributes between 8 percent and 10 percent to the container shipping business of the AP Moller-Maersk group.

Three new vessels were delivered this year to service west African trade, and two new ships will service trade between South Africa and Europe from next year.

The five ships, which are larger and faster than those in the existing fleet, cost R1.25 billion and were financed through Safmarine's cash flow and balance sheet.

Heesom-Green said the challenges facing ports included coping with the sheer volume of exports and imports. "In terms of container trade, port authorities should take a long, hard look at predicted future demand.

"They need to sit down with carriers, exporters and importers and work out what kind of throughput we envisage in a five, 10 and 15-year cycle because infrastructure is a long-term investment," said Heesom-Green.

"Plans should be made to manage that volume with spare capacity to cater for peaks."

Authorities have started addressing infrastructure backlogs. Three post-Panamax cranes are due to be commissioned by the end of the month and a further three will arrive next year.

Heesom-Green said the issues were not "just cranes, it is systems and procedures and getting containers between Durban and Gauteng on rail and road links.

"It is the marine ability with pilots and tugs to dock the vessels, and how deep and wide the harbour entrance is so we can service the next generation of container ships. There is a lot of planning to do."

The National Ports Authority has already embarked on a three-year project to widen and deepen the Durban harbour mouth.

Heesom-Green said authorities were doing their utmost to address congestion but there was always more that could be done.

"We have to aim for a quality product and we should never accept mediocrity."

The private sector could add value to container terminals, but who managed these terminals was not an issue.

"What we as a carrier look for is an efficient productive port with a cost-competitive tariff.

"It is not the carriers that are affected by inefficiency, but importers and exporters. If South Africa wants to continue with export-led economic growth, ports are a critical part of the supply chain and they have to be competitive against Brazilian, Indian, Chinese or Australian ports."

From a tariff point of view, South African ports were not expensive by comparison.

"The tariff in Hong Kong for handling a container is a lot higher than Durban, but the port is very productive. A vessel docks on arrival, there are four or five cranes working a big vessel, so the port stay is a quarter of the time spent at Durban."

It costs a vessel $30 000 (about R194 000) a day to wait outside the Durban port to berth.

And instead of moving 30 cranes an hour, the Durban harbour sutands at 20 moves an hour, meaning the longer a vessel is in a South African port the more expensive it becomes.

These costs were passed on to freight rates. "So productive ports mean more competitive freight rates for exporters."

 

Last modified on Thursday, 26 June 2014 15:13

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