South African Business 2016 edition

OVERVIEW Phakisa to

OVERVIEW Phakisa to power marine economy The maritime sector holds great promise as, through Operation Phakisa, national government aims to implemement its policies and programmes better, faster and more effectively. Operation Phakisa – in the words of President Jacob Zuma – “has been designed to answer fundamental implementation questions and find solutions, as the country tries to address poverty, inequality and unemployment, among other challenges, as stipulated in the National Development Plan (NDP) 2030. The first phase of the implementation will focus on unlocking the economic potential of South Africa’s oceans.” The simple fact is that South Africa is not gaining as much as it should from the maritime sector. One example is the absence of a merchant fleet and another is the scarcity of ship-repair facilities. With oil and gas finds growing in volume exponentially off the west coast of Africa and off Mozambique, there is a huge opportunity for South Africans to grow big businesses in the rig-repair and service industry. The ocean could contribute up to R177-billion to the Gross Domestic Product (GDP), and add between eight hundred and one million direct jobs. Priority sectors To tap into the ocean economy, government has identified four priority sectors, on which Operation Phakisa will focus. These are marine transport and manufacturing activities, such as coastal shipping, trans-shipment, boat building, repair and refurbishment; offshore oil and gas exploration; aquaculture and marine protection services and ocean governance. Government will explore the country’s natural advantage in maritime transport and manufacturing by capturing the benefits of growing volumes of cargo handling, sea and coastal shipping and supporting transport activities such as storage and warehousing. Operation Phakisa looks at further enhancing the enabling environment for exploration of oil and gas wells, resulting in an increased number of exploration wells drilled, while simultaneously maximising the value captured for South Africa. The need to continuously balance the economic opportunities which the ocean space SOUTH AFRICAN BUSINESS 2016 110

affords, while maintaining its environmental integrity has been recognised, as well as sustainable but commercial practices such as aquaculture. A relatively underdeveloped area and small in size, aquaculture in South Africa has shown strong growth of 6.5 percent per annum, being an increasingly important contribution to food security globally. A coordinated effort Western Cape MEC for Economic Development and Tourism Alan Winde argues that all of the ports of South Africa should cooperate in trying to attract the business of the 130 rigs that pass the country’s ports. The chief executive of the South African Oil and Gas Alliance (SAOGA), Warwick Blyth, told Reuters that South Africa is starting to realise its potential in this market. Cape Town and Saldanha’s facilities were ‘exceptionally busy’, according to Blyth, who noted that each of the three or four repair jobs being done simultaneously was worth about R200-million. DCD Marine operates Cape Town’s rig-repair facility, the largest ship-repair yard in Africa. There are supplementary yards in Simon’s Town and Saldanha. Large logistics operators like Bertling already run sophisticated operations at South Africa’s major ports. JSE-listed Grindrod runs prominent businesses such as Unicorn Shipping and Grindrod Freight Services. Training for the maritime sector is provided by five marine academies in KwaZulu-Natal and the Western Cape. Simon’s Town’s Lawhill Maritime Centre has won awards. Transnet runs a School of Port Operations. SAMSA says there are 341 maritime careers, ranging from marine surveyor to oceanographer. Ports and terminals OVERVIEW South Africa’s port system is controlled by Transnet National Ports Authority. The ports of Richards Bay, Ngqura and East London are in Industrial Development Zones (IDZs). The other commercial ports are Durban, Port Elizabeth, Mossel Bay, Cape Town and Saldanha. The deepest natural port in Southern Africa, the port of Saldahna can accommodate vessels up to a draft of 21.5 metres, exporting most of South Africa’s iron ore. Port Elizabeth has automotive-handling capacity, a container terminal and a break-bulk terminal. The port currently handles large quantities of manganese but this is due to move to Ngqura. The Port of Mossel Bay services the fishing and petroleum industries. Huge amounts of money are being spent on ports and terminals. Container terminals alone will receive R9.8-billion in additional funding in the period to 2019 and all of the country’s ports are receiving upgrades that are increasing their capacity. 111 SOUTH AFRICAN BUSINESS 2016