Transnet National Ports Authority (“TNPA”) is set to its lease consideration process in the Port of Durban in a bid to encourage new entrants into the market.

Shulami Qalinge, Chief Executive of TNPA, says Transnet’s Island View Precinct Strategy aims to facilitate greater participation of historically disadvantaged persons in terminal operations while enhancing the country’s supply of strategic liquid bulk commodities.

According to Transnet historically lessees in the Island View Precinct have enjoyed tenancy in excess of 50 years, leading to slow transformation within the precinct.

The majority of the precinct’s footprint is occupied by cargo owners who act as Terminal Operators. They are responsible for landing, shipping and/or storage of South Africa’s petroleum, diesel, chemicals, oils, lubricants and aviation fuel.

“The underlying principles of the Island View Precinct Strategy are to promote radical socio-economic transformation, job creation and to facilitate investment in ageing infrastructure,” Qalinge notes.

“The strategy will also allow us to allocate capacity to new entrants and to introduce an operating model that ensures equal access. This will enhance the security of supply,” she explains.

Open tender process

Currently 14 leases in IVP are on a month-month arrangement. An additional lease expires in 2020 which will potentially free up three sites in the IVP.

All of these affected leases will be advertised through an open tender process, commencing in 2018. The open process will allow for shortlisting of bidders and only shortlisted bidders will be eligible to submit final bids.

Qalinge says that existing operators could re-bid but would need to fulfil the stringent transformation and job creation requirements of Transnet SOC Ltd.

New transformation requirements

Potential new entrants will be required to meet certain transformation criteria such as Level 4 BBBEE and TNPA will seek 51% Black ownership in the Terminal Operator company.

“The execution of the IVP strategy is a complex process given national imperative, but TNPA requests industry to embrace the IVP outcomes and to work with us to effect a smooth transition,” she says.