South Africa Buys Tugboats as Efforts Proceed to Improve Port Efficiency

South Africa’s ports operator Transnet reports it is moving forward with a fleet renewal program as part of an overall effort to tackle the perennial challenges of inefficiencies that have placed the ports at the bottom of international rankings and led to massive delays and congestion. Transnet National Ports Authority said it will invest $52 million to acquire seven tugboats to be used at Durban and East London.

Two contracts were awarded to Damen Shipyards Cape Town to deliver the seven tugboats between April and August. The new tugboats will replace aging crafts that have reached their operational lifespan. The company said the new tugboats boast will have the latest hull design and propulsion, as well as a 60-ton bollard pull which is a much-needed improvement from the bollard pull of the existing tugboats that range between 32 and 40-ton bollard pull. The new crafts will also be highly maneuverable while guiding larger vessels.

“This investment demonstrates TNPA’s ongoing commitment to providing reliable marine craft at our ports, which will enable us to effectively service the marine industry and respond to global shipping demands,” said Captain Rufus Lekala, TNPA Chief Harbor Master.

Durban, the country’s biggest container seaport that handles approximately 60 percent of container traffic will be allocated five of the tugboats with the other two going to East London. Durban has drawn the most attention highlighting the inefficiency of the port operations. Late last year, the port of Durban witnessed unprecedented congestion that peaked in the last week of November when vessels with more than 61,000 containers were forced to remain at the outer anchorage due to operational challenges, equipment failures, and bad weather.

The inefficiencies at Durban have mainly been attributed to underinvestment in equipment and maintenance. An analysis by Economist Intelligence showed that while South Africa may have picked up new business, its ports have been constrained by inefficiencies, congestion, and power supply issues that have prevented operators from fully exploiting the Red Sea security crisis and the increased flow of seaborne traffic.

“The travails of South Africa have pushed some shipping companies using the Cape route for east-west trade to look further afield for restocking and bunkering services,” states the analysis. It contends that the problems in South Africa’s ports have directly benefited the Toamasina port in Madagascar, Port Louis in Mauritius, and Walvis Bay in Namibia, which are strategically located on the east-west route connecting Asia with Europe.

The investment in the tugs comes as the South African government is pushing other key steps including new management for the company and contracting international companies to operate terminals across its eight ports.

On February 28, Michelle Phillips and Nosipho Maphumulo were appointed Transnet’s chief executive and chief financial officer. They are replacing Portia Derby and Nonkululeko Dlamini who resigned in October last year due to pressure. Phillips had been acting Group Chief Executive and has 21 years experience with the company. Maphumulo joins the company from private enterprise and according to Transnet is a “highly accomplished business leader, financial steward, operational strategist, change catalyst, and trusted advisor, with extensive public and private sector experience.”

“Transnet plays an important catalytic role in the South African economy. We are confident that these appointments will provide Transnet with the strategic direction and the ability to execute on its ongoing reforms,” said Pravin Gordhan, Minister of Public Enterprises.

The Board of Directors of Transnet today, March 1, announced that it completed the financial due diligence of ICTSI, which was designated as the preferred bidder in July 2023 in a new public-private partnership for the Port of Durban. The board approved moving forward to finalize the contract award to ICTSI in a 25-year joint venture with Transnet Port Terminals to develop and upgrade the primary container terminal in Durban.