Government u-turn swaps port concessioning for array of licences

Posted On Tuesday, 21 September 2004 02:00 Published by eProp Commercial Property News
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The government has abandoned plans for the long-term concession of port operations

Infrastructure IndustryThe government has abandoned plans for the long-term concession of port operations. Instead, it will license the private sector to operate specific port facilities and services.

This is a departure from the state's previous stance on port reform, which was to ultimately concession to the private sector on a 25-year basis most, if not all, terminals that SA Port Operations operates. The Durban container terminal was to be the first.

Eugene Mokeyane, the director-general for the department of public enterprises, said: "The facilities or services licensed to the private sector will be managed and operated on a common-user, non-discriminatory basis.

"The licensing will be for well-defined and ring-fenced facilities or services to ensure their operational efficiency and financial viability.

"The licensing scheme ... will be open to competitive international bidding [which] will be transparent."

The government still planned to access private sector funds for infrastructure development to meet the R14.3 billion expenditure required at ports over the next five years.

Siyabonga Gama, the chief executive of the National Ports Authority (NPA), said: "Although the NPA is successful, we do not have this kind of money and we will need to engage in partnerships with the private sector."

Durban will get the lion's share at R7.3 billion to, among other things, expand and develop container facilities.

These plans, along with finalising the NPA Bill and establishing a port regulator, are critical to the state's logistics strategy and the need to lower the costs of doing business.

Mokeyane said that because the restructuring plan was still evolving, caution was required when projecting its potential consequences. A more detailed announcement is expected in the fourth quarter. Mokeyane said: "We want to be sure on a long-term basis that the government's control and strategic direction is not diluted."

With the global increase in mergers and acquisitions, a private sector operator that the state might select today could be bought out and the new company might not be aligned with the government's objectives.

Jane Barrett, a research officer for the SA Transport and Allied Workers' Union, welcomed "any decision not to go the wholesale concession route". She said: "It was agreed in November last year that government and labour would jointly assess options. We look forward to engaging with them on proposals."

Last modified on Monday, 04 November 2013 13:26

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