President Cyril Ramaphosa has announced the establishment of the Transnet National Ports Authority as an independent subsidiary of Transnet on Tuesday.

This will mean the establishment of an independent National Ports Authority as a wholly owned subsidiary of Transnet, with its own board appointed by the minister of public enterprises.

The president was speaking in Cape Town on Tuesday following a tour of the port.

“And I am convinced that the establishment of an independent National Ports Authority will mark the beginning of a new era for South Africa’s ports. There will be no jobs lost as a result of the creation of the new subsidiary; only greater efficiency and more investment.”

The minister is expected to appoint the new board by 30 June 2021 to oversee the establishment of the new subsidiary.

Ramaphosa noted that the weak performance of South Africa’s ports was the result of structural challenges in the logistics system and operational inefficiencies and that creating a clear separation of the roles of the infrastructure owner and the terminal operator between an independent TNPA and Transnet Port Terminals would address the worst of the challenges.

“The functional and legal separation of such roles, which are currently operating divisions of the same company, will enable each to be fulfilled more independently and with greater efficiency.

“In particular, it will mean that revenues generated by the ports can be invested in port infrastructure, both for the replacement of old equipment and for the upgrading and expansion of our ports,” he said.

Transnet would remain the sole shareholder of the subsidiary to prevent any negative impact on the group’s balance sheet, and to ensure that the ports authority remains an important part of the Transnet group.

He assured stakeholders that no jobs would be lost as a result of the creation of the new subsidiary.

Ramaphosa asserted that the creation of the independent subsidiary was a significant development because it had been delayed for more than 15 years since the National Ports Act was promulgated.

“As part of our Economic Reconstruction and Recovery Plan, we are making progress in overcoming long-standing obstacles and bringing an end to delays in the implementation of reforms.”

“Together with the restructuring of Eskom, this is part of our ongoing effort to reposition and transform our State-owned enterprises so that they can be profitable, sustainable and competitive and can play a developmental role in our economy.”

The President encouraged the private sector to partner with the State to improve terminal operations and to invest in new infrastructure, as is already the case in several of the bulk cargo terminals.