The good times are back
Apr 16, 2004
Author: Terry Hutson
This article first appeared in The Mercury newspaper (www.themercury.co.za) dated 25 March 2004, as the first of a series looking at the capacity and competing interests of ports in the Southern African region
Recent media reports have highlighted the number of importers and exporters who are clambering to reuse the port of Maputo as an alternative to either Durban of Richards Bay.
These port users complain of continued delays at the two KZN ports, because of a non-performing and expensive railway, and of port congestion resulting in costly delays. And with the cost of chartering ships having escalated tenfold in the past few years, any unnecessary cost is no longer acceptable.
Among the disillusioned exporters ready to make the switch are companies like Highveld Steel & Vanadium and Columbus Steel, in addition to many of the ferro and coal producers. Disgruntled importers include a list of motor manufacturers, particularly those from the Pretoria cluster.
And that list hasn’t even mentioned the container industry.
Just how serious are these threats and should they be taken seriously? What effect would such actions have on Durban and Richards Bay? There is certainly some official concern and the subject of Maputo has even been discussed in the lofty halls of parliament, where a government committee said it was not yet too worried by the trend.
There’s little doubt the reports reflect accurately the concerns of various producers and manufacturers who are forced to re-examine options, including a switch to the port of Maputo. As long ago as 2001 the international metals group BHP Billiton warned that it might be forced to close its South African manganese operations and switch production to Australia because of high transport costs, mainly rail. This hasn’t happened, although it is significant that one of the key sponsors driving the Maputo Corridor Logistics Initiative (MCLI), which aims at marketing and facilitating the corridor, is BHP Billiton.
The large number of interested parties who recently conducted a two-day inspection of the Maputo Corridor and the port is an indication of the amount of interest out there. Among these were a significant amount of Durban-based companies, no doubt looking for opportunities.
This upsurge in interest and even confidence in Maputo follows a number of initiatives aimed at putting the port, as well as the road and rail corridor from South Africa, back on an even footing somewhere close to where it was prior to the outbreak of Mozambique’s civil war.
Almost 30 years ago the war sent the port of Maputo into decline. Up to that time the port of Lourenço Marques, as Maputo was then called, averaged between 14 and 15 million tonnes of cargo annually, much of it traffic from the former Transvaal but including iron ore exports from Swaziland and sugar from Zimbabwe. Within a short few years cargo throughput at Maputo had dropped to about 2.5 million tonnes and much of the infrastructure and equipment at the port had fallen into disrepair.
But now, with the civil war behind it and the concessioning of the entire port a reality, the happy times are back and those in charge of Port Maputo, its new name, believe it is a port whose time has come.
Operated as a joint venture between the national transport company CFM and a consortia headed by the UK’s Mersey Docks & Harbour Company, the privatised Maputo Port Development Company has registered 25 percent growth in just nine months and is targeting 15 percent for this year.
The initial aim, says CEO Alec Don, is to restore the port’s basic land and marine infrastructure and to supply urgently required plant and equipment.
Tangible infrastructural improvements coming from a USD70 million investment has so far included two harbour tugs, a new pilot boat and cargo handing equipment. Dredging of the port entrance channels has increased the maximum draft to 12.1m, permitting ships not unlike those using Durban to call and work cargo.
Other improvements include security systems and a new port entrance, the latter creating easier access to traffic directly off the South African road system. Cargo handling sheds are undergoing rehabilitation and internal road networks brought up to standard.
“We’re not trying to compete with Durban, nor should we be regarded as a threat to South African ports, as some in South Africa seem to think,” says Jorge Ferraz, CEO of the port’s container terminal, which is operated by P&O Ports.
Ferraz points out that the terminal has a capacity of only 100 000 teus (twenty foot container equivalents), and last year handled no more than 40,000 boxes compared to Durban’s 1.3 million, which he said was hardly likely to make much impression on the Durban Container Terminal. “We’re capable of complementing the Durban container terminal,” he emphasised.
What Ferraz says applies to other elements in the port. Maputo’s future does look rosy and will prove a boon to exporters and importers particularly from the Mpumalanga and Limpopo provinces and to some from Gauteng. A newly awarded railway concession won by Spoornet will provide a seamless railway between the two countries, although Mozambique’s border post with South Africa at Komatipoort will remain an Achilles Heel until customs and immigration formalities are streamlined into a single modern border post.
The real secret to Maputo’s success lies in its greatest asset – its proximity to the Limpopo and Mpumalanga provinces. The distance from the major citrus growing region of Limpopo to Durban is 1 156km compared with just 450km to Maputo, which exporters estimate will save them up to 30 percent in railage costs alone.
Exporters in Mpumalanga, including a majority of SA’s coalmines and a large sugar and timber industry, are even closer. This is the sort of issue, along with the upgrade of the road and rail and a seamless border post that will decide the resurgence of Maputo as a port.
The port even has ambitious ideas of developing a cruise terminal to capitalise on Maputo being within a 90-minute drive from the Kruger National Park.
Meanwhile, what Maputo takes away from Durban and Richards Bay will quickly be absorbed with other commodities. Who knows, it might even help reduce some of the congestion.