Economic Development, at the Sod Turning Ceremony, New International Airport
and Tradeport, La Mercy
14 September 2007
Minister of Transport, Jeff Radebe
MEC for Transport, Mr Bheki Cele
MEC for Health, Mrs Peggy Nkonyeni
MEC for Social Welfare, Dr Meshack Hadebe
Mayor of eThekwini Municipality, Mr Obed Mlaba
Acsa CEO, Monhla Hlahla
Chief Director, national Department of Transport, Riad Khan
Distinguished guests
Ladies and gentlemen
Members of the media present
There is no turning back, construction of the new international airport and
TradePort is underway after 10 long hard years of blood, sweat and tears.
During this decade of the struggle for La Mercy three successive democratically
elected multi-party provincial governments and legislatures stood resolute in
our commitment, we did not bend, we did not waiver, the commencement of
construction of the project marks the turning point of our economic growth and
development trajectory in KwaZulu-Natal.
We have consistently argued that the new international airport and Dube
Tradeport will serve as a catalyst for economic growth and development in our
province. We are only a few weeks into the construction phase and we are
already in very detailed discussions with two international airlines that wish
to introduce a daily schedule service. Some of you may find this hard to
believe but allow me to present a few of the numbers of the business case for
direct inter- continental flights.
In terms of our analysis the total number of people flying to international
destinations from KwaZulu-Natal, 12 months up to September 2006 via the Durban
Airport was 535 000 passengers. Of this more than 90 000 flew to London, 30 000
to Mauritius, a little more than 20 000 to Mumbai and about 20 000 to Dubai. In
addition to our current estimations of about 30% of the OR Tambo International
Airport total cargo volumes originating from the province of KwaZulu-Natal.
These numbers suggest that our market can sustain a commercially viable
international air service on particular routes, accounting for viable passenger
load factors and revenues from cargo.
In November this year, we will be in a position to announce the name of the
international airline that will introduce a daily service by March of 2008 to
the current Durban Airport using an Airbus A330â200 or one suited to
accommodate the current runway constraints. The start of construction has
without any doubt provided the market with the certainty to begin their
internal planning. Our target is to secure at least three direct international
air services in the first year of operations of the new international airport.
We are targeting Europe, the Middle East and the Indian market.
Every day my office gets enquiries from local entrepreneurs about retail
opportunities at the new international airport. We of course refer them to the
Airport Company of South Africa (Acsa). However, this too is a strong signal
that local entrepreneurs are beginning to think about the business
opportunities the new passenger terminal can provide. In this regard, we will
have to work closely with Acsa to ensure that an even balance is struck between
the meaningful participation of local entrepreneurs and the national brands
that currently dominate the current terminal buildings. In this regard, my
Department in particular would be willing to provide any business development
support that may be required to achieve this objective.
The Dube TradePort Cargo terminal will be the first multi-user facility
equally serving all airlines and freight forwarders. This facility will accept,
store and process cargo across the landside/airside boundary on behalf of
airlines and freight forwarders. The opening capacity of the terminal has been
sized for 100 000 tons per year and handled up to 500 tons per day once
operational. Also provided for within the cargo terminal is a state of the art
perishable export and import processing facility, including chilled work
stations for the break up and make up of perishable product.
The Dube TradePort Trade Zone will be linked to the cargo terminal and
provide a platform for a full range of airfreight related business, freight
forwarders, warehouses and high value low volume manufacturing activities. Here
too, we have been overwhelmed by the response of the market wanting to secure
space in order to capture the efficiencies the trade zone offers to a range of
different supply chains including motor components, electronics, high-end
clothing and textiles, pharmaceuticals, value added logistics and the
perishable sectors.
The AgriZone will be a specialist growing area for exporters of high-yield,
time sensitive produce by airfreight. Our key objective is grow and strengthen
a new labour intensive perishable supply chain by reducing operational costs
through utilizing the various transport, logistics and trade services on offer
within the Dube Tradeport site. Facilities for storage, handling and processing
will be built to prepare, process and package products to an export standard.
The project will now move to the detailed design phase, further environmental
impact assessments will be undertaken and development planning approvals
sought. We anticipate that by March next year procurement for the construction
will commence.
The first commercial property development in the Support Zone One is a Joint
Venture between Acsa and the Dube TradePort (DTP). It is geared towards
attracting private sector investment comprising of hotel and office
developments. The current construction phase will ensure that the roads and
bulk services will be provided to serviced stands ready for private sector
investment. We anticipate that by early next year these commercial investment
opportunities will be put out in the market for investment. Here too, I have
little doubt that demand is going to outstrip supply with respect to the
appetite the local market has for such commercial opportunities.
The construction commencement has also generated tremendous excitement in
the tourism sector. KwaZulu-Natal has always been the premier domestic
destination and our current tourism plant reflects this. In the main, we have
good quality but low to medium volume accommodation facilities. There are also
many new, smaller hotels and resorts often run by owner-entrepreneurs, both in
the city and around the province, that offer attractive and good value
accommodation for visitors. These are supported by bed and breakfast
accommodation, catering for a similar niche. Outside of the city, in the
greater region and province, there are few large scale hotels or resorts. Our
greatest challenge is that our province is not geared up for a mass
international tourism market solely from a perspective of accommodation. The
potential of a new daily international air service next year, and the capacity
to expand this connectivity to at least three international markets when the
new airport opens, provides exciting opportunities for major private sector
investment in larger hotels, resorts, shopping facilities and focal points for
international tourism.
The R6,8 billion rand capex spend on this project of which provincial
governmentâs contributions are over R2 billion including commitments to upgrade
the R102 and other provincial department contributions we consider to be
strategic investments. We now expect the private sector over the next three
years of construction to match this investment rand for rand. Once the new
international airport and Dube TradePort becomes operational we expect to
leverage the private sector investment up to five times what government has
spent. In short, we want to be bold enough to say to the private sector we
expect you to invest between 2010 and 2015 up to R35 billion in KwaZulu-Natal.
Government has delivered its part of this strategic infrastructure spend now I
would like to challenge the private sector to come to the party.
Finally, Master of Ceremonies, on behalf of the Provincial Government I
would like to thank the national Minister of Transport for his outstanding
efforts in getting the project off the ground. I would also like to
congratulate Acsa, its management and Board for finally displaying confidence
in the province and pity by investing in the new international airport after 10
long years. I would also like to thank the eThekwini Municipality for all their
ongoing support and bulk service provisioning.
I have no doubt moving forward that all sleeves are rolled up, spades are in
hand, boots are on â everyone together towards delivering the new international
airport and tradeport by April 2010.
I thank you.
Issued by: Department of Finance and Economic Development, KwaZulu-Natal
Provincial Government
14 September 2007
