Transnet forging ahead with infrastructure programme

"In the earlier months of the current financial year, we have seen a softening particularly with the container volumes - imports and exports that we handle - for a variety of reasons," Transnet Port Terminals (TPT) chief executive officer Karl Socikwa said at a breakfast briefing of the Africa Ports and Harbours Show.

Socikwa said TPT was keeping a close watch on developments in Europe.

"We are not oblivious to what's happening in Europe at the moment and despite that, we are proceeding with investment but we're watching that closely.

"Imports/exports are a function of the level of economic activity that's taking place in the country. [There's] little we can do in driving ... import/export volumes - it's more your transhipment volumes where [with] innovative ways, you can have a handle on it and we're doing that," he said on Tuesday.

Shipping lines had indicated to TPT that they were not overly concerned about the softening as this could be due to a soft blip or a softening of demand from markets they are servicing in Europe.

"They themselves are not in a situation where they are saying that they're in crisis mode," said Socikwa.

TPT handles four types of cargo, namely container volumes; car volumes; break bulk and bulk volumes.

Transnet is investing R300bn in the Market Demand Strategy. Through the state-owned freight logistics group's Market Demand Strategy, rail, port and pipeline infrastructure will be expanded over a seven-year period to the tune of R300bn.

Of the R300bn, TNP will receive about 10% of the amount, translating to just over R33bn. TPT provides cargo-handling services at seven of the country's terminals. TPT customers include shipping lines, freight forwarders and cargo owners.

"The nature of investment in port facilities will be your ship-to-shore cranes, yard cranes ... We also will be investing in new technology in terms of the operating environment and our people," said Socikwa, adding that the company's annual budget reviews would enable them to analyse the pace at which investment was taking place over the seven-year period.

Should a need to revise or review the investment be identified, this would be possible as there was "sufficient flexibility" built into the system.

The focus of the investment will be on human capital, assets and technology.

"So a lot of investment is trying to reverse the historic trends of investment, so that we are not only investing in areas that have received attention in the past, but also starting to look at other areas in the business [to ensure] that there's an even spread of economic activity," said Socikwa.

Richard's Bay terminal will receive the lion's share of the spend due to ageing infrastructure. The terminal is a complex one from an operational point of view as it handles a multitude of commodities, unlike Port Elizabeth that handles manganese or Saldanha that handles iron ore.

Durban, the busiest and largest container terminal in the Southern Hemisphere, will be second in line, while Ngqura - which has seen major investment in the past, is set to get two more mega-max cranes to be added to the other six cranes at the terminal.

At the Cape Town port, R5bn has been spent in the last couple of years.

On talk that rates charged at ports were too high, TPT said it didn't believe this to be true.

"We don't believe rates are too high ... We continue to monitor our costs as tightly as we can to make sure we are running an efficient business to generate the level of earnings necessary to fund investment," said Socikwa.

Transnet puts skills development at heart of strategy

Meanwhile, it has been announced that skills development and job creation is at the forefront of Transnet's Market Demand Strategy.

"Human capital development is going to be at the forefront of our plan and our programme because we have to make sure that as we create sustainable jobs through this level of investment and heightened level of activity, we are developing our people to be able to operate the infrastructure," said Socikwa.

Transnet is investing R300bn in the Market Demand Strategy, which is informed by the requirements of the market. Through the state-owned freight logistics group's Market Demand Strategy, rail, port and pipeline infrastructure will be expanded over a seven-year period to the tune of R300bn.

Of the R300bn, TNP will receive about 10% of the amount, translating to just over R33bn.

"We are working with organised labour," he said, adding that apprenticeships programmes were being rolled out.

Socikwa added that Transnet was aware of the critical role it played in growing the South African economy, which faced high unemployment and recently low GDP growth.

"Transnet, in all that it does, is very aware and alive to the fact that it plays a vital role in growing the economy and ensuring that South Africa and the competitiveness of SA relative to other countries in the world is bolstered," he said.

Transnet believed that it was important to involve private sector participation so as to be able to cater for levels of demand.

Socikwa said collaboration was important and they could not do it alone, adding that Transnet is open for business.