Cape Town Mayor Geordin Hill-Lewis has welcomed Transport Minister Barbara Creecy’s reported confirmation that a Request For Information (RFI) will be issued in March to test private sector appetite for partnerships on ports and freight rail lines.
Cape Town’s Port Struggles Among the Worst in the World, Says Mayor
‘We are encouraged that national government will this month test private sector appetite for partnerships on ports and freight rail. This is long overdue, especially for the Port of Cape Town, which is ranked among the worst in the world. We call on the Minister to ensure that Cape Town’s port is included in the Request For Information process. The RFI needs to be designed to encourage private sector proposals to co-run Cape Town’s port and enable major infrastructure investment.
‘Government doesn’t have the money to properly invest in our port’s infrastructure, and can also not raise these funds via unaffordable taxing of South Africans, as with the failed 2% VAT hike proposal. While some new and replacement cranes are apparently on the way for Cape Town’s port, this is a drop in the ocean compared to the robust private sector investment and operational control needed to lift our port’s performance to compete with the best in the world.
‘An efficient port will raise exports of locally produced products and drive job creation in these industries, especially in our vital agricultural sector. We need a clear and urgent deadline for greater private sector involvement in Cape Town’s port operations, and we will be watching this RFI process closely,’ said Mayor Hill-Lewis.
There has been little clarity to date on government’s plans for the Port of Cape Town, despite recent announcements by Transnet that it will be seeking private sector investment for the ports in Durban, Richard’s Bay and Gqeberha.
Mayoral Committee Member for Economic Growth, Alderman James Vos, said he had recently engaged business leaders in the fresh produce supply chain who noted the impact of port inefficiencies on their products and services.
‘A major company involved in the movement of fresh produce for export said there was a 20% drop in exports of fruits such as grapes in the current period due to the port’s problems. Further to the point, the global average for gross crane moves per hour (GCH) is between 25 and 30. According to the South African Association of Freight Forwarders, the Cape Town Container Terminal averages at about 13 GCH. This creates significant ripple effects for all businesses and employees in the supply chain. With this port handling 80% of deciduous fruit exports each season (from December to April), it is absolutely vital – and urgent – for our economy that this port improves operational conditions,’ said Alderman Vos.
In addition, Alderman Vos urged the port’s management to prioritise the acquisition of new equipment that would better manage adverse weather conditions.
‘Whenever Cape Town experiences strong windy conditions, port operations grind to a near halt. Yet we have always been a city of great gusts and port authorities must do more to stay ahead of such conditions. When the port is unable to operate sufficiently, exporters are forced to divert their goods to other ports in Durban, Gqeberha and elsewhere at huge costs. While we note the recent addition of new equipment and a new booking system, Transnet must ensure that it acquires the requisite technical and management skills. The private sector has the services and the expertise and have shown they are willing to assist as much as possible. Now it is up to Transnet to work with them for the good of the millions of unemployed South Africans and our economy,’ said Alderman Vos.
Port Inefficiencies Costing Jobs and Billions in Lost Exports
Research from the Western Cape Department of Economic Development and Tourism shows that private sector participation at the Port of Cape Town could result in an additional R6 billion in exports, the creation of approximately 20 000 jobs, and over R1,6 billion in additional tax revenues within five years.
