Programme Director;
Mr. Ben Dikobe Martins, Minister of Transport;
Mr. Mike Mabuyakhulu, MEC for Economic Development and Tourism;
Mr. James Nxumalo, Mayor of eThekwini Metro;
Chairperson of the Board of Transnet, Mr Mafika Mkwanazi;
Group CEO of Transnet: Mr Brian Molefe;
International guests;
Ladies and Gentlemen:
It is my great honour and privilege to stand here this morning to partake of this historic milestone when Transnet, South Africa’s state-owned freight, transport and logistics company, takes ownership of the old Durban International Airport site from the Airports Company South Africa (ACSA) for the development of its proposed Dig-Out Port in the South of Durban.
In this regard, I wish to welcome my colleagues present here, whom I have already acknowledged and to thank them for their presence at this important occasion.
Furthermore, I wish to thank our colleagues from the Department of Transport and the Airports Company South Africa (ACSA) for their cooperation in speedily resolving this matter.
Both the Department of Enterprises and Transnet, as well as both our country and the City of eThekwini are eternally grateful for the resolution of what in future will eventually prove to have been an historic watershed decision and action for our country, people and economy.
The people of eThekwini and South Africa as a whole, the investors and the peoples of Africa must take pride not merely in the significance of what we are doing today, but above all else in the promise that this watershed occasion bears for our future as a continent in global economic and political affairs.
Future generations of Durbanites, South Africans, Africans as well as business people will applaud this watershed investment for its foresight in that they will say we acted in this fashion to invest in the future today, to create jobs, skills and logistics capacity that changed the economic and social landscape of our country in a decisive manner.
The infrastructure rollout programme announced by President Zuma steams ahead and today we underscore that it is unstoppable.
The capacity that will be created here will tremendously enhance the capabilities of the Dube Trade Port as well as the Special Economic Zone that will be served both by the King Shaka International Airport as well as the expanded Durban Harbour.
The coordination and integrated approach the President has insisted we take in approaching the infrastructure rollout programme is one of the most important ever taken in this country and would ensure that we provide both our country and investors with a long-term take on infrastructure development, with integrated infrastructure rather than piece-meal projects and silo projects as well as with a coordinated approach that would make implementation both exciting and much easier.
This is an innovative approach that has ensured that government acts as one entity across its three tiers and will resolve some of the issues we have confronted infrastructure implementation in the past such as cost-overruns and time schedule delays which arose from the silo approach.
Programme Director;
For centuries humankind has shipped goods across the oceans from one land to another.
The loading and unloading of these ships was never easy and often exposed those who engaged in this business and activity to hazardous conditions.
A ship could easily spend more time in a port than at sea.
But even then, boxes of various types and sizes were used to transport cargo simply because it was the most efficient way to move things from one location to another.
It was therefore a logical next step to standardise the size of these boxes so that they could be easily stacked and handled, a process that would eventually apply across the entire globe.
In 2006 modern container shipping celebrated its 50th anniversary and today the container industry has evolved to such an extent that almost 60% of all sea cargo is moved by containers.
Over the last twenty years, Southern African countries have experienced significant political and economic stability which has impacted directly on the growth of container traffic to the region.
In 2005, Southern Africa’s container traffic accounted for 40% of Africa’s total container volumes.
Between 1985 and 2010, Durban, the largest container port in Southern Africa, experienced an average year on year growth of 8% in container traffic.
Other countries in the Southern African region have planned major capital expansion programmes designed to leverage vital trade routes between Africa, Europe, Asia and Australia. South Africa is no exception!
The vast potential for growth within Southern Africa necessitates renewed strategic thinking and integrated planning.
Accordingly, the need to reduce the cost of business over time in the economy through the provision of infrastructure ahead of demand is critical.
Furthermore, it is critical to shift from an initial pattern of scattered and poorly-coordinated ports along the coastline to a concentrated mega-gateway port designed to service highly-densified trade routes as well as domestic and regional freight corridors, whilst supporting decentralisation of industrial activities through rail across the economy.
Programme Director;
Managing the competitiveness of South Africa Inc. is a strategic requirement given our geographical location of South Africa from its major trading partners.
Moreover, the long distances between the ports and key industrial centres emphasises the need for significant and ongoing efficiency improvements within the domestic economy.
Accordingly, the quest for efficiency, growing economies of density and competitiveness is driving the development of the South African logistics system.
Today the long haul mega container ships are focussed on economies of density to reduce the unit cost for transportation on the sea leg.
The mega ports require wider entrance channels, extremely deep draughts and cutting edge technology to reduce ship turnaround times.
Each hour of inefficiency impacts on an ocean carrier’s profitability and therefore the cost of logistics.
As a response strategy, Transnet has developed a comprehensive port strategy to respond to both the growth in container trade as well as the need for more sophisticated port facilities.
It is estimated that demand for container capacity in Durban will grow from 2.5 million TEUs today to 12 million TEUs over a thirty year period.
After 2019, the growth in demand in Durban will have to be met by the new dig-out port.
In Cape Town, Transnet is planning to grow the port capacity from 700,000 TEUs today to 2.5 million TEUs in thirty years.
Port Elizabeth and Ngqura will become a core transhipment port, with a capacity of 6 million TEUs in 2042.
As these ports expand and cutting edge equipment is installed, I am confident that productivity will reach the levels needed by mega-container vessels.
Programme Director;
The Government’s national Infrastructure Plan intends to transform the economic landscape of South Africa and create a conducive environment for State-Owned Companies to pursue initiatives expected to build new skills capacity, create decent jobs, enterprise development and support the integration of African economies.
Above all else, this integrated infrastructure programme must and will lead to the industrialisation of our economy and thus will move our economy to a higher trajectory where we can shift away from exporting primary commodities and importing manufactured products, and begin ourselves to develop a vibrant manufacturing sector in South Africa and to export value-added goods.
This infrastructural development is within the Strategic Integrated Project 2 (SIP2) which is under the leadership of the Presidential Infrastructure Coordinating Commission (PICC).
The country’s infrastructure rollout plan consists of 18 strategic integrated projects that will cost about R4 trillion that must come both from the public and private sectors.
To implement this ambitious plan will require real and meaningful partnerships between the public and private sectors in order to unlock their common balance sheets for the good of country and our economy.
By their very nature SIPs have introduced a new economic governance approach which looks at a range of mandatory pillars for building a functioning economy which includes transportation, energy, water, schools, health care centre which will ensure sustainable economic development.
Yesterday, I had occasion, together with the City, colleagues from the Ministry of Transport as well as Transnet, to engage with surrounding communities from the Durban South basin to indicate to them that we will soon embark on a meaningful and genuine process to solicit their views on the planned development.
This is because it is important, as we pursue these programmes, that our people are an integral part of this development, that they understand the value of this investment and reap the socio-economic benefits associated with these projects.
We can never build a stable and functioning economy without ensuring that the needs of our people are integrated into the plan.
I am convinced, after spending two hours with the representatives of community organisations and other stakeholder and interested groups, that we will be able to reach compromises on the issues they have raised with us.
Furthermore, the important lesson of the infrastructure rollout programme is that we need to dynamically and continuously communicate our plans, the better to inform our people of the long-term implications of these plans and how they will impact on them as communities so that we mitigate the negative impacts where they exist.
Programme Director;
The human capital investment and enterprise development are at the cornerstone of this project.
The Gauteng-Durban freight corridor is a holistic redevelopment of the corridor and the new Durban port that will serve as a gateway for freight destined for the greater Durban area and the Gauteng industrial complex.
My Colleague, Minister Martins and I will be engaging with various communities to ensure that they are part of this corridor development.
The DIA land, once transformed, will drive industrialisation through investment in the port and related sectors such as construction.
The port will become home to sixteen container berths, five automotive berths and four liquid bulk berths.
More importantly it is expected to create 20 000 direct and 47 000 indirect jobs during the construction phase.
Once operationalized it will employ 12 000 people directly and another 16 000 indirectly through the value chain of suppliers.
The dig out port will provide both the country and the province with significant opportunities in the form of private sector development because SOCS spending creates new sectors in the economy.
The transfer of this land must be viewed as part of the strategic national agenda to expand economic infrastructure and therefore economic activities.
The two key ports of Durban and Ngqura including the envisaged development of DIA will not only expand our economy but also reposition South Africa as a key player in internationally.
Today’s event is particularly exciting because Transnet is going to be undertaking a number of projects from now until 2019.
These projects total R33 billion over the next seven years for the purpose of upgrading and expanding South Africa’s ports
Amongst others this includes the development of the Point passenger terminal facility.
Ladies and Gentlemen, it is my privilege, on behalf of Transnet, formally to take ownership of the old Durban International Airport (DIA) as the official site for the development of South Africa’s premier gateway port.
I trust that the Board and the Management of Transnet will take every step to ensure that the complexity of this mega project is successfully managed and delivered within the agreed timelines.
I thank you.
