South Africa Calls for Private Partner for Cape Town’s Liquid Bulk Terminal

 

The efforts to modernize and improve the operations of South Africa’s port operations are continuing. Transnet National Ports Authority announced that it is beginning an RFP process for the privatization of the operations of the liquid bulk terminal in Cape Town.

Transnet, a government-controlled company, has been under increasing pressure including criticisms from the country’s president due to the poor track record of operations. President Cyril Ramaphosa last year promised quick and meaningful reforms at the company after South Africa experienced massive port congestion and labor unrest. Many of the problems were blamed on poor management and a long-term lack of investment.

The City of Cape Town and the Western Cape provincial government have long been calling for private investment and participation to help solve the port’s problems. Cape Town is one of eight commercial ports managed by Transnet National Ports Authority. The company operates a total of 13 liquid-bulk berths as well as terminals for dry bulk, break bulk, and containers.

The RFP explains that the proposed facility in Cape Town is a brownfield site linked to the Eastern Mole and Tanker Basin berths within Cape Town’s Liquid Bulk Precinct. The port is a major portion of the country’s import and export facility for gas, oil, and chemicals. It is responsible for the efficient movement of liquified cargo across South Africa and for ensuring the security of supply for the country. The new area is approximately 19,000 square meters (4.6 acres).

Transnet is proposing a 25-year concession. The successful bidder will be chosen in a phased project and ultimately responsible to acquire, operate, maintain, refurbish, or construct and transfer a liquid bulk terminal at the Port of Cape Town.  Bids in the first phase of the RFP are due by July 15, 2024.

The launch of the RFP comes as Transnet is still struggling to complete its first privatization program. In a process launched in 2021, Transnet in July 2023 announced it had selected Philippines-based International Container Terminal Services (ICTSI) as the preferred bidder for the privatization of Durban’s container terminal on Pier 2. The awarding of the contract was opposed by factions inside the country and earlier this month it was reported that APM Terminals, the port operator subsidiary of AP Moller-Maersk, was also opposing the completion of the award. APM was passed over as one of the 18 companies that expressed interest in the Durban concession. 

APM is continuing to argue that it would be a better partner and has the broad resources that will be required to modernize the operations in Durban. DCT Pier 2 is viewed as the most critical part of South Africa’s supply chain. It handles nearly three-quarters of Durban port’s traffic and nearly half of South Africa’s container volume for imports and exports. It has long been plagued by delays, congestion, and operating problems.

Transnet looks to move forward with additional privatization partnerships to address the problems in the ports. They are also preparing an RFP for the RoRo terminal in Port Elizabeth.