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Transnet to pump R44 billion into ports over the next 5 years – with big plans for Durban

Port of Durban (Getty Images)

  • Transnet will invest R44 billion into its National Ports Authority and Port Terminals divisions over the next five years.
  • Upgrading the port of Durban into a “world-class” hub for container shipping is a priority.
  • Plans for Durban include deepening its wharf to allow for bigger ships, extending existing container terminals, and constructing a new terminal in the Point Precinct.
  • These upgrades, once complete, will more than triple Durban’s container capacity.
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Transnet plans to invest R44 billion into its two port divisions over the next five years and aims to turn Durban into a “world-class” hub for container shipping.

South Africa’s state-owned rail, port, and pipeline company, damaged by years of corruption, mismanagement, and infrastructure in a state of disrepair, has turned a corner.

Transnet recently posted a profit of R5 billion for the year ended in March, swinging sharply upwards from a loss of almost R9 billion in 2021. It also received its first unqualified audit opinion from the auditor general since 2018, according to its most recent financial results presentation released on Wednesday.

Transnet’s freight rail operations account for almost half of its total revenue. But because of a steady decline in railway infrastructure due to “high incidents of theft and vandalism”, 76% of Transnet’s total capital investments have been directed towards revitalising rail.

Over the next five years, Transnet aims to plough R44 billion into its freight rail portfolio. That’s the same amount allocated to its National Ports Authority (TNPA) and Port Terminals combined.

A total of R30 billion will be invested in the TNPA, which manages South Africa’s national port system in a landlord capacity, while R14 billion has been allocated to the Port Terminals portfolio, which handles container and other bulk exports.

Transnet Durban port upgrade

From Transnet’s integrated report 2022

Significant upgrades have already begun at ports in the Western Cape, namely Mossel Bay, Saldanha, and Cape Town. More than R16 billion of the TNPA’s capital investment programme will be spent extending breakwaters, procuring helicopters, tugboats, and cranes, and upgrading container terminals.

The TNPA also recently started its process for procuring between 50 MW and 80 MW of renewable energy power at its eight ports.

Transnet’s biggest port plans involve transforming Durban into an international container hub. This includes deepening the Maydon Wharf channel to allow larger, modern vessels to enter the port, creating additional capacity for containers at existing piers, and developing an entirely new container terminal in the Point Precinct. These upgrades will triple Durban port’s container handling capacity.

The port of Durban is also set to play an even bigger role in the automotive value chain, with plans to re-engineer the Ocean Terminal precinct to be a “flat, open automotive footprint with optimised parking bays and a dedicated preloading facility closer to the berth per the new operating model.”

It’s estimated that, over the course of a decade, these major upgrades will cost in the region of R100 billion.

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