TNPA needs more autonomy, lean structure – OECD

Time of article published Nov 4, 2014

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Nompumelelo Magwaza

TRANSNET National Port Authority (TNPA) needs more autonomy and streamlining of its decision-making processes to deal with future expansion plans including the planned Durban dig-out port, an international study revealed yesterday.

The Organisation for Economic Co-operation and Development’s (OECD) international transport forum focusing on the planned Durban dig-out port, expected to be operational by 2020, said the new port would require a reconsideration of the institutional framework, including the introduction of private operators.

“This port will most likely take the form of a public-private partnership [PPP], which would have important ramifications for the sustainability of the current institutional framework of the port of Durban,” it said.

The study by the OECD recommends that there should be an increase in the autonomy of TNPA such as creating a separate fund at the disposal of the port authority for infrastructure and maintenance. As the many stakeholders are dependent on the decisions that TNPA makes with regard to investments and planning with the port, it was important that the port authority was able to act efficiently and quickly to make binding decisions.

The current internal organisation of TNPA within the broader Transnet structure appears to act as hindrance to the above requirement,” the report found.

It pointed out that decisions made without too much delay by institutionally autonomous port authorities in other contexts were slowed down by lengthy procedures of approval that range through several different levels and departments of the group’s structure.

Compared to the many other port authorities around the world, which operate according to the principles of a board-directed company with regards to investment decisions, TNPA was not able to raise its own capital, neither through bond issuance nor off its own balance sheet.

The report points out that instead, TNPA’s turnover was recorded as part of Transnet’s turnover with the remaining profits transferred to its single shareholder, the Department of Public Enterprise.

“This means, for example, that the port authority cannot directly purchase property. Instead, plans for property acquisition must be submitted to Transnet’s property acquisition unit, who will purchase the property on behalf of the TNPA,” the study revealed.

It is believed that Transnet, in which TNPA falls under, was investigating an option for PPP.

Although the port of Durban’s performance was found to be sub-optimal, it still carried the status of being the main gateway port of Africa. The port handled 2.6 million containers in 2012, twice as much as in 2000.

The report found that despite its dominant position in Africa, the port of Durban was one of the most expensive in the world due to high cargo dues.

“Maritime operations at Durban have a performance that is somewhat degrading, which is reflective of a port running close to capacity constraints,” it said.

Its efficiency was far below scores found in main ports around the world. As of 2012 to 2013, the average anchorage time for containers was 39.2 hours, while average turnaround time was 60.4 hours, accounting to close to 100 hours of total port time.

More than half of the imported and exported containers are going to or come from the Durban Metropolitan area, transported by truck, creating urban congestion.

“Only 15 percent of the containers related to the port of Durban are transported by train.”

It is believed that about 690 million tons of goods are transported on the major roads of the metropolitan area of Durban, according to the eThekwini Transport Authority.

To alleviate congestion caused by road freight, the report recommends that an inter-departmental freight unit within the city of Durban, that can act as a one-stop shop for freight-related issues, can help.

“This unit could act as a vehicle to improve co-ordination on freight transport and engage in joint planning, aligning various actors including Transnet, the SA National Roads Agency Limited, the national and provincial departments of transport, as well as various departments within the city of Durban,” it said.

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