Transnet's Durban container port. File picture: Simphiwe Mbokazi

Transnet will need private funding to finance the construction of the biggest port in Africa over the next few decades. The re-engineering project, known as a dig-out port, is at an early stage and will be guided by a feasibility study next year.

The study will give a clear indication as to whether Transnet will have to relocate businesses and households in order to accommodate the port. Communities in the vicinity of where the port would be constructed, at the old Durban airport, have already held protests and community meetings to oppose the project. Transnet and the Department of Public Enterprises said last week that they would host roadshows from Gauteng to the Free State and KwaZulu-Natal to consult with communities, especially those that might be affected.

“It will have to be a give and take situation. We are prepared to hear out the people’s concerns but they must also be ready to listen to us,” Public Enterprises Minister Malusi Gigaba said last week.

He said people opposing the dig-out port would have to realise that the mega project was bigger than them.

“No residential properties have been earmarked for demolition by Transnet,” he said.

Gigaba said the capital to build the port, which was estimated at R75 billion, would have to be raised through the private sector.

“This project is not part of the R300bn earmarked for the seven-year market demand strategy, so the funding for the development of the dig-out port will have to come from the private sector.

“We have, so far, detected great interest from the private sector and we hope that they will come on board,” he said.

The dig-out port was expected to have an impact of R48bn on gross domestic product (GDP) and at full operation, it would contribute about R56bn to GDP annually.

Gigaba said it was vital to build the port. During the construction phase, the project was expected to create 28 000 direct and 64 000 indirect jobs. Income generation during the port’s construction was estimated at R24bn.

At its completion, the dig-out port would have a 16-berth container terminal, which would provide additional container handling capacity of 9.6 million twenty-foot equivalent units (TEUs) a year. The port would have an automotive handling terminal and a liquid bulk handling facility by 2050.

The first phase, which was scheduled to start during the first quarter of 2016 and be commissioned by 2020, would be able to accommodate newer container vessels, which were getting larger and therefore demanded deep water ports.

Brian Molefe, Transnet’s group chief executive, said last week that the development would help Transnet to meet rising port capacity demand and accommodate larger cargo vessels. “The need for additional container capacity and deep water berths in Durban is clear and compelling,” he said.

South Africa’s cargo volumes have increased fivefold over the past 30 years. Volumes were expected to increase by roughly the same order over the next 30 years, from about 4 million TEUs a year in 2010 to 20 million TEUs a year by 2040.

However, organisations such as the South Durban Community Environmental Alliance (SDCEA) are convinced that despite all these benefits, the new Durban port is set to be another “white elephant” like the Coega Industrial Development Zone in the Eastern Cape.

SDCEA said the development would directly affect the people of southern Durban and the broader city, and that the social and environmental costs would be high.

Despite reassurances from Transnet, communities were concerned that the planned consultation processes merely meant ticking the “public participation box”.

“Once again, communities in south Durban are voicing their concerns to government that this expansion will only lead to the destruction of the area’s social fabric, people’s livelihood and environmental health,” the SDCEA said.

But businesses hold a different view and many have welcomed the development.

Roy Ramdiyal, the spokesman for shipping company Safmarine, said increasing the size of the Durban harbour would help ease congestion and had the potential to make South Africa a more competitive and attractive market.

“This is because a bigger, more effective port will help shipping lines, such as Safmarine, improve transit times, service reliability and vessel turnaround times.”

He added that the design of the current Durban container terminal also did not allow for the berths to accommodate more than three large vessels at any one time.

Toyota South Africa, which would have its manufacturing facilities close to the proposed dig-out port, said Transnet had no plans to move the plants for the port expansion. The company instead welcomed the project, saying it would be an integral part of the country’s continued competitiveness.

Leo Kok, Toyota SA’s senior manager for corporate communications, said Toyota used the Durban harbour for all of its exports of South African-built vehicles and imported fully-built-up vehicles through the port.

“Any improvement to the port infrastructure that would further enhance the movement of large volumes of vehicles in and out of the country would be welcomed.”

Avhapfani Tshifularo, the executive director of the SA Petroleum Industry Association (Sapia), said the new dig-out port would benefit the country’s petroleum industry as it would eliminate congestion at the current port of Durban. “Currently ships bringing in petroleum products are delayed due to congestion,” he said.

Tshifularo said the draft plan of the new port showed an impact on parts of some Sapia members’ facilities. “It might be necessary to move some tanks and lay down new pipelines to offload and load petroleum products,” he said.

Transnet’s first step towards the project was the completion of the land acquisition of the old Durban International Airport from Airports Company South Africa.

The transaction involved the transfer of about 641ha of land valued at R1.85bn. Transport Minister Ben Martins handed over the airport site to Transnet last week.