Transnet announces plans to privatise aspects of South Africa’s port operations

To fix its ailing ports, South Africa’s Transnet National Ports Authority (TNPA) has hired a team of contractors to run the eight terminals that lack operators and plug the “operational gaps”. The state-controlled firm hopes the temporary arrangement, which will last for three years, will smooth the transition to new long-term operators for the terminals, whose contracts have been suspended or terminated.

Anthony Ngcezula, the TNPA’s commercial chief, says the move is part of its strategy to fulfil its role as a port landlord, as required by the National Ports Act of 2005, and to offer a globally competitive port system. “This will reduce cargo losses and provide our customers with a cost-effective and sustainable freight logistics solution,” he says.

The TNPA’s tender covers all eight of South Africa’s commercial seaports, from Richard Bay in the north-east to Saldanha in the west. The contractors will handle both imports and exports, as well as the delivery of cargo to inland destinations.

The authority’s action comes after years of poor performance at the country’s ports, which have seen cargo volumes dwindle. The annual total is likely to drop further in 2023.

Durban has already seen a partial privatisation of Pier 2, outsourcing operations to a Filipino company, though the enterprise is still owned in majority by an ANC-connected BEE holding company.

The general process of privatisation sought by the national government tends to follow this pattern, whereby tenders and assets tend to be signed over only provided they remain in the control of the ruling party, whether directly or indirectly.

The recent tender contract with Turkish company Karpowership recently fell through, after Karpowership rejected the party’s onerous BEE requirements.

Whether this pattern applies to the rest of the outsourcing schemes remains to be seen.