KwaZulu-Natal Business 2022-23
The 2022/23 edition of KwaZulu-Natal Business is the 14th issue of this highly successful publication that, since its launch in 2008, has established itself as the premier business and investment guide for the KwaZulu-Natal Province. In addition to the regular articles providing insight into each of the key economic sectors of the province, there is a special feature on national government’s campaign to encourage private investment in ports. The vital role of the ports of Durban and Richards Bay in the South African economy cannot be understated and putting them in a better position to deal with commodities and cargoes of every sort is clearly in the national interest. A special purpose vehicle is to be created within Transnet to make dealing with private companies less complicated. The increasing importance of the Oceans Economy to the future of the provincial and national economy is relevant to any examination of the economy of KwaZulu-Natal. This applies as much to trade and ship-repair as it does to the exciting gas discoveries which have been made off the coast of Mozambique and South Africa.
The 2022/23 edition of KwaZulu-Natal Business is the 14th issue of this highly successful publication that, since its launch in 2008, has established itself as the premier business and investment guide for the KwaZulu-Natal Province.
In addition to the regular articles providing insight into each of the key economic sectors of the province, there is a special feature on national government’s campaign to encourage private investment in ports. The vital role of the ports of Durban and Richards Bay in the South African economy cannot be understated and putting them in a better position to deal with commodities and cargoes of every sort is clearly in the national interest. A special purpose vehicle is to be created within Transnet to make dealing with private companies less complicated.
The increasing importance of the Oceans Economy to the future of the provincial and national economy is relevant to any examination of the economy of KwaZulu-Natal. This applies as much to trade and ship-repair as it does to the exciting gas discoveries which have been made off the coast of Mozambique and South Africa.
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SPECIAL FEATURE<br />
is a partner alongside empowered investment<br />
entity Africa Armada Consortium – the new R200-<br />
million Cruise Terminal Facility is functioning.<br />
In Richards Bay, home to the Richards Bay Coal<br />
Terminal which exports most of the country’s<br />
coal, Hillside Aluminium, the largest aluminium<br />
smelter in the southern hemisphere, announced<br />
in early <strong>2022</strong> that it would renew existing leases<br />
in the Port of Richards Bay, benefiting Transnet<br />
and the municipality with a revenue stream of<br />
R338-million and local procurement spend in the<br />
amount of R2-billion a year.<br />
Transnet and the International Finance<br />
Corporation (IFC) are undertaking processes to<br />
conduct a feasibility study that will determine<br />
the viability of a natural gas hub in Richards Bay.<br />
The two bodies have agreed a commitment of<br />
R28-million as part of the cost-sharing agreement<br />
towards the liquefied natural gas (LNG) storage<br />
and regasification terminal to be established at<br />
the Port of Richards Bay by 2024.<br />
Existing infrastructure<br />
The focus on new investment in the ports at<br />
Durban and Richards Bay also serves as a reminder<br />
of the other strengths of <strong>KwaZulu</strong>-<strong>Natal</strong> as a<br />
logistics hub, with the King Shaka International<br />
Airport and associated Dube TradePort also<br />
playing key roles. The N3 highway linking Durban<br />
with the Highveld and the industrial hub of South<br />
Africa is the country’s busiest road.<br />
Durban harbour is South Africa’s premier<br />
multi-cargo port and is Africa’s busiest,<br />
handling in excess of 80-million tons of cargo<br />
per annum (StatsSA). The Port of Durban is a<br />
key hub in the transport and logistics chain,<br />
with 60% of all imports and exports passing<br />
through it.<br />
The Port of Durban exports a broad range<br />
of products, including automotive vehicles. In<br />
2018/19, the year in which South Africa’s total<br />
vehicle exports topped 350 000, Durban’s Car<br />
Terminal boasted a record of putting more than<br />
500 000 fully-built-up units (FBUs) through the<br />
port. The figure includes FBUs that are not motor<br />
vehicles and includes vehicle imports. Toyota’s<br />
popular Fortuner is exported at a rate of about<br />
150 per month.<br />
Within the Port of Durban there are a number<br />
of specialised facilities. Several projects are<br />
underway to increase capacity. Transnet National<br />
Ports Authority and Transnet Port Terminals (TPT)<br />
are combining to upgrade infrastructure and<br />
buy new equipment to improve efficiencies at<br />
the Ro-Ro Terminal (vehicles and break bulk) and<br />
Maydon Wharf (mixed cargo and agriculture) but<br />
the biggest project is at the Durban Container<br />
Terminal (DCT).<br />
DCT has a capacity of 3.6-million TEUs (twentyfoot<br />
equivalent unit) and the current project aims<br />
to extend that beyond five-million TEUs. The Brics<br />
New Development Bank has approved a loan of<br />
$200-million for the DCT expansion project.<br />
TNPA states that the multiplier effect in the<br />
marine sector creates five jobs for every direct<br />
job. A large drydock project created direct jobs<br />
for 29 skilled employees.<br />
The <strong>KwaZulu</strong> Cruise Terminal (KCT) won<br />
the contract to finance, build and run the new<br />
Durban Cruise Terminal and started operating<br />
in 2019, shortly before the Covid-19 epidemic<br />
temporarily put an end to cruises.<br />
The cruise terminal is an important step<br />
forward for Durban and fits in well with the<br />
larger project that links the port to the upgraded<br />
southern end of the promenade, the Durban<br />
Point Waterfront. A joint venture between MSC<br />
Cruises SA and Africa Armada Consortium, KCT<br />
will spend about R220-million on the financing‚<br />
construction‚ maintenance and operation of the<br />
cruise terminal for a 25-year concession period.<br />
The cruise terminal covers 32 000m² and<br />
caters for two ships and at least 5 000 passengers.<br />
A ship with 2 000 passengers is worth in the<br />
region of R2-million per day for the host city.<br />
The number of annual passengers is expected<br />
to grow from the current 200 000 to more than<br />
700 000 by 2040. Durban’s hosting of 60 ships<br />
per annum is expected to rise to 150 or more.<br />
South Africa attracts 0.5% of the world’s cruiseship<br />
market which comprises about 15.4-million<br />
passengers annually.<br />
The Port of Richards Bay, 160km to the<br />
north-east of Durban and 465km south of the<br />
Mozambican capital of Maputo, handles more<br />
than 80-million tons of bulk cargo every year.<br />
19<br />
KWAZULU-NATAL BUSINESS <strong>2022</strong>/<strong>23</strong>
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