Durban - The city is poised to enter the global shipbuilding industry with a R1.4 billion contract to produce nine powerful tugboats, in just 42 months.

One of the tugs will be the world’s most powerful tug.

The Transnet contract to replace ageing tugs is expected to provide a big boost to the local economy.

Bid winner, South African Shipyards expects to launch the first one in November next year and the last one to be handed over in early 2018.

The company’s employees have a 12 percent stake in the company, which has a 60 percent black ownership.

A steel-cutting ceremony on Thursday marked the beginning of the construction phase to replace South Africa’s ageing tugboat fleet.

“The new tugs will be the most powerful ever to enter Transnet’s service… the ninth and final tug to be built will be 42m long, 15m wide and have a bollard pull of 100 tons making it the most powerful tug in the world,” Transnet National Ports Authority’s chief harbour master, Rufus Lekala, said in a statement.

The other eight 31m tugs are marginally bigger than the existing tugs, but are far more powerful, with a 70-ton pull. The older tugs have 32.5 to 40 ton pulls.

The Authority’s chief executive, Tau Morwe, said the contract “rates as the largest single contract awarded by Transnet National Port Authority to a South African company for the building of harbour craft”.

At the ceremony yesterday, he said this was the culmination of a process that began a long time ago.

Morwe said the construction of the vessels would create many employment opportunities.

The Transnet executive bemoaned the lack of investment in the South African shipping industry: “As a country we are afraid to invest,” he said.

The shipping and maritime industry could only progress if the country was forward looking, he said.

He cited the examples of South Korea and Singapore, which have a thriving shipping industry because of their intensive investment in it.

“We are still stuck 25 years ago,” he said. “The tender was to build competency and build on it… We should not be building ships outside the country, we should be building competencies in it.”

Morwe said there should be a sustainable shipbuilding industry in South Africa and that South Africans should exert greater control over the industry as it was currently being controlled by Europeans.

The chairman of Southern African Shipyards, Don Mkhwanazi, said this was a significant achievement for the marine and engineering sectors in South Africa.

He said this would not mean they would be complacent:

“The race to excellence has no finish line.”

The government now saw the “blue economy” as a critical part of the economy, he said.

Southern African Shipyards chief executive, Prasheen Maharaj, said for the first time in 20 years the “industry is looking bright”.

“For every direct job we create there will be six others created.”

Maharaj said 55 percent of each tug would be manufactured locally and the rest would be imported because South Africa did not manufacture its own engines and propulsion units.

He

said that the propulsion unit alone was 35 percent of the value of the tugboat.

To get the contract, the company had to bid with international competitors and he said this had been a great learning experience for him. “The one thing I have learnt is how difficult the project is.”

The awarding of the contract will not only benefit Southern African Shipyards but will also have a developmental dimension to it.

Under the Local Supplier Development Programme black suppliers, women and youth-owned businesses were to be a part of the procurement process.

Maharaj said the government needed “to create an enabling environment for companies” to be able to compete with international companies.

“We need to take into cognisance that South Africa is a developing country” and not a European company.

Maharaj said they would also be bidding on an almost R4bn contract to built six vessels for the South African navy.