No need for SA to privatise ports - Transnet

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BR_br  Karl Socikwa0 Independent Newspapers Karl Socikwa, the chief executive of Transnet Port Terminals, speaks at the African Ports Evolution Conference in Durban yesterday. Photo: Tracey Adams

The privatisation of ports would not guarantee efficiencies nor optimise performance, Transnet Port Terminals chief executive Karl Socikwa told delegates at the African Ports Evolution Conference in Durban yesterday.

The utility plans to spend R7 billion on terminal infrastructure up to 2018/19.

Socikwa was on a panel discussing the correlation between privatisation of national ports and performance in Africa.

Although he did not rule out future collaboration with private operators, Socikwa said privatisation of Transnet’s ports would not necessarily result in a better performance than the state-owned transport and logistics company was able to deliver.

“It is not through privatisation that Transnet can meet the market’s demands, but through working collaboratively with the private sector.”

South Africa has a few private operators, such as Richards Bay Coal Terminal, and small terminals operated by Grindrod and Bidvest. “The level of performance in these ports are comparable with Transnet ports’ levels, and sometimes they are worse or much better than us.”

Socikwa added that port efficiencies were not about the involvement of the private sector but relied on the operator’s goals and team focus. “We have been able to optimise operations and provide a level of service that shipping liners do not get when they call at other ports around the world.”

He also warned that private involvement could be merely ransacking and that as a developing economy South Africa should guard against this.

Mothusi Lukhele, the managing director of transport at Accenture, said it would be difficult to privatise port facilities as they were strategic national assets. “Ports are more than just the movement of goods, they service an upstream market which the private operators are not necessarily interested in.”

Marco Pluijm, a senior ports specialist at international engineering firm Bechtel, said the privatisation of the ports of Mozambique might have solved a short-term problem: “But what happens if a new operator wants to come in?” he asked.

Mozambique privatised its ports to international private companies in 2003.

On Transnet’s ability to meet its global customers’ demand in terms of movement of goods in and out of its eight ports, Socikwa said plans to implement infrastructure projects were well under way.

“We are very happy with progress made on our market demand strategy and we are beginning to see the fruits of the group’s decision to invest in capacity ahead of demand.”

As part of the strategy, Transnet plans to invest at least R300bn in improving port and rail infrastructure. The seven-year programme is in its second year, with most projects having started. “We have made progress in terms of implementation and have not gone over budget.”

Transnet Port Terminals aimed to drive rapid capacity increases in the years ahead. The capital investment would be directed towards the purchase of equipment, reconfiguration and upgrade of facilities as well as training of staff.

Over the next two years, the container terminals at Durban, Port Elizabeth, Ngqura and Cape Town would receive R2.9bn for new equipment and infrastructure. This investment would take overall container terminal capacity from 4 million twenty-foot equivalent units to 7 million by 2019.


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