KwaZulu-Natal Business 2023-24

SPECIAL FEATURE
producers are potentially generators of electricity.
Many of them already are producing power for their
own use, now they can sell it to the grid.
The signing of a long-term contract for energy
supply by Eskom and South32 for its Hillside
Aluminium smelter was another very welcome step
in the energy field. The deal expires in 2031.
In the oil and gas sector, the big issue of what
is going to happen to SAPREF, South Africa’s
largest crude oil refinery which suspended
operations in 2022, remains unresolved. The
provincial government is planning to have a
meeting with the refinery’s shareholders and
other levels of government to try to find a way of
resolving the matter.
The first steps in a move by national government
to partner with the private sector in boosting
efficiency at ports were taken in 2022: deals were
signed at the Port of Durban and at Richards Bay.
In 2023, these first steps became a giant leap
when International Container Terminal Services
Inc (ICTSI), a Philippines-based port operator, was
announced as the preferred partner for a joint
venture (JV) to run the Durban Container Terminal
with Transnet.
ICTSI operates in 20 countries and employs
more than 11 000 people. Transnet will hold 50%
plus one share in the JV for 25 years, with an option
to extend to 30 years. From the initial list of 17
potential partners, ICTSA was eventually chosen
from a shortlist of six. Part of the plan for Durban
Container Terminal Pier 2 is to increase traffic in such
a way that it will be able to increase its handling
capacity from the present 2.9-million TEUs (twomillion
20-foot equivalent units) to 11-million TEUs
by 2032.
The 2022 deal involved a 15-year concession
for the loading of grain at one of Durban’s
agricultural terminals was won by Afgri, one of
South Africa’s biggest agricultural firms. Afgri
will deal with the operation and maintenance of
all landside operations, and the deal includes a
similar arrangement at East London. The other
two terminals in Durban are operated by SA Bulk
Terminals and Bidvest Bulk Terminals.
Special Economic Zones
The provincial government is working on an
investment pipeline, through the Special Economic
Zones (SEZs), of R22-billion. The SEZs at Richards
Bay and King Shaka International Airport (the Dube
TradePort) are key components of the strategy and
are now well-established nodes of investment.
Milestones have been reached in the plan for
creating further SEZs to focus on leather and textiles.
A business case has been completed by units within
the provincial government and land at Ezakheni
(Ladysmith) in the uThukela District has been
identified and secured. Dube TradePort will be the
SEZ operator and R780-million in investments has
been pledged by companies keen to relocate to the
SEZ. To spread the benefits of the SEZ, the concept
of “The Textile Belt” will be followed. The corridor
approach will leverage comparative advantages of
various regions in the clothing and textile value chain.
This belt will start from Newcastle and link Ladysmith,
Mooi River, Pietermaritzburg, Hammarsdale, Durban,
Isithebe and the Dube TradePort to the Richards Bay
Industrial Development Zone.
Infrastructure upgrades at Madadeni, Isithebe
and Ezakheni have been completed, which went
some way to creating jobs and which will create a
more conducive environment for investors.
Tourism is a key sector in the KwaZulu-Natal
economy and provides livelihoods to many
thousands of families in urban and rural areas.
The closing of borders brought real hardship to
many areas.
A number of flights have been resumed to King
Shaka International Airport by the likes of Turkish
Airlines and a new flight has been inaugurated by SA
Airlink, connecting the province to Zimbabwe.
Economic sectors
The province’s existing infrastructure, good soils
and fine weather provide a solid base for a varied
economy. KwaZulu-Natal has significant capacity
in heavy and light manufacturing, agro-processing
and mineral beneficiation, all of which is supported
by South Africa’s two busiest ports (Richards Bay and
Durban), the country’s most active highway (the N3),
7 KWAZULU-NATAL BUSINESS 2023/24