Durban, 20 April 2001
It is indeed a great pleasure for me to be part of an event that is testament to the accelerated implementation of our restructuring programme. The unveiling of Port Operation's new offices in Durban heralds the successful divisionalisation of Portnet from a single entity into two separate and independent business units within the Transnet stable. Today's event together with the appointment of the Chief Executives for Port Operations and Port Authority are but some of the important milestones in the divisionalisation of Portnet.
The divisionalisation of Portnet must be viewed against the backdrop of the managed liberalisation of the key input sectors of our economy. It is predicated on the need to significantly improve the efficiency levels of South African ports with the specific view to lowering the cost of doing business in South Africa.
As we take our rightful place in the international economy, the movement of goods and capital between South Africa and its major trading partners has increased significantly. A substantial part of this trade takes place via South Africa's seven commercial ports. It is Government's considered view therefore that the efficiency of our port infrastructure coupled with the implementation of the new tariffing regime will positively enhance our export competitiveness.
Under the leadership of Mr. Tau More, Port Operations has now embraced this important imperative. The move from Johannesburg to Durban is therefore part of management's belief that in order to facilitate effective and efficient port operations the organisation has to be located close to its operational bases. Durban was chosen because it is home to the largest and busiest port on the African continent.
Furthermore, the organisation has adopted a very ambitious turnaround strategy known as the Delivery Value Plus programme. As part of this ambitious programme, a total of almost R1,8 billion per annum will be go towards developing port infrastructure with the view to enhancing service levels. This infrastructure rollout programme includes container expansion and breakbulk handling, equipment modernisation, the introduction of an advanced information technology and management computer system and new construction and extensions to increase terminal storage and handling capacity.
As a shareholder, our Government welcomes Transnet and Port Operations' commitment to upgrading South African ports to international best standards allowing its customers base to benefit through the growth and profitability of their businesses. Having succeeded in reconfiguring the Transnet pension fund debt, there has been a welcomed increase in investment in critical infrastructure by state owned enterprises in the transport sector.
As you may be aware, several infrastructure upgrades are in progress or have taken place at ports across the country. The Durban Container Terminal handling capacity will be increased with the addition of several Post Panamax cranes and straddle carriers, the replacement of the straddle carrier fleet and additional stacking areas for several berths. Further to this, Pier 1 will be converted to a dedicated container terminal and the building of the new quay wall will further increase terminal handling capacity.
The forecasted growth for the forthcoming financial years for containers is 5% whilst bulk and breakbulk are expected to grow by 8.8% and 9.23% respectively.
Going further afield to Southern Africa's premier fruit export terminal, the Cape Town Terminal has provided adequate reefer capacity and the Port Elizabeth Container Terminal has focused on equipment modernisation, in line with the increased exports from national motor manufacturers.
Several projects have also been undertaken at Breakbulk Multi-Purpose Terminals across the country resulting in dramatic increases in capactiy and service delivery.
Durban has recently seen a R24 million investment in the Car Terminal that has increased capacity to 120 000 units per annum. While in East London our linkage with the private sector, in particular DaimlerChrysler South Africa, has resulted in a R112 million upgrade of the Car Terminal to a state of the art four-level covered terminal.
Both the Richards Bay and Saldanha Dry Bulk Terminals have also seen infrastructure investment with the Richards Bay Terminal reducing vessel delay, improving quality control in line with ISO 9001 standards and increasing import and export capacity. This forms part of a three-phase upgrade to the terminal and includes investment in specialised plant and equipment that has allowed the introduction of additional export routes.
Expenditure at the Saldanha Iron Ore Terminal has focused on increasing export capacity, in line with customer demand, through the acquisition of new equipment and the increase of workspace efficiency. Over an above this a number of projects are currently underway to address issues of environmental legislation and Eco-responsibility. In conclusion, it is encouraging to note that the developments in the ports sector have unlocked immense opportunities for economic growth and development, as well as the development of business including empowerment opportunities, and employment opportunities in places like Durban. As we recommit ourselves to the implementation of this ambitious programme of restructuring state assets, we are mindful of the formidable challenges ahead of us. We have started with the tariff reform process and we hope to conclude this process before the end of this calendar year. The introduction of private port operators in a manner that meets our stated objective of broadening economic participation through black economic empowerment is one of the many challenges ahead of us.
I thank you.