JOHANNESBURG – South Africa’s embattled construction and manufacturing sectors received a major boost yesterday after state-owned freight logistics utility Transnet awarded a multibillion-rand contract to construct Tambo Springs Intermodal Terminal in Gauteng.

Transnet awarded the 20-year concession to Southern Palace Joint Venture Consortium to design, construct, finance, operate and maintain the terminal.

The consortium is lead by Ferrovie dello Stato Italiane, which will serve as a technical partner, and comprise of Makoya, an empowerment logistics partner that would be supported by Concor, Aecom and Italferr.

Transnet’s chief business development officer, Gert De Beer, said that the terminal would have an outlay of R2.5 billion.

“Springs inland terminal has been on the government's plans for a number of years now. Witnessing it coming to fruition is indeed a historical moment for many South Africans. Once completed, the in-land terminal will completely change the face of Gauteng.”

Transnet said the project would lead to the creation of 81 000 jobs during the contraction phase and 110 000 permanent jobs in transport, manufacturing and logistics operations.

The construction industry shed 142 000 jobs in the first quarter of the year.

Transnet in 2016 issued a request for proposals inviting private logistics companies to design, build, operate, maintain, and eventually hand over an inland container terminal, earmarked for Tambo-Springs, in eastern Gauteng.

Southern Palace deputy chairperson Lucas Tseki said the contract represented a significant milestone in the group's progression to becoming a leading provider of infrastructure solutions and provider of logistics services in South Africa and across the African continent

“Southern Palace Group has established that an attractive long-term commercial opportunity exists and has already embarked on a strategic business decision to create a new operating division targeting the ports and terminals infrastructure concessions sector across the continent,” Tseki said.

Transnet has been at the centre of Deputy Chief Justice Raymond Zondo’s Commission of Inquiry into State Capture. Last month, the commission heard how procurement processes were flouted to award tenders to Gupta-linked companies as well as associates.

Acting chief executive Mohammed Mahomedy said the processes were deliberately manipulated and weakened to benefit entities and individuals.

Yesterday, De Beer said that the Springs Intermodal development, which formed part of the Gauteng Integrated Transport Master plan, would cover 607 hectares and a range of property development components.

He said once completed, the inland terminal would have easy access to major road and rail networks linking strategic sea ports, the OR Tambo International Airport and industries in the province.

“As South Africa's economic hub, Gauteng handles approximately 60percent of the country's import and export goods. A development of such magnitude will ease road traffic by diverting road cargo to rail networks linked to the country’s sea ports,” De Beer said.

BUSINESS REPORT