Ports & Ships Maritime News

May 31, 2006
Author: P&S

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  • Minister of Transport highlights government’s strategy

  • SA and Tunisia establish a joint business council

  • COMOROS: Glowing Karthala puts authorities on alert

  • Cape Town’s V&A Waterfront up for sale

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    Minister of Transport highlights government’s strategy

    Excerpt from the Minister of Transport, Jeff Radebe’s budget speech in parliament yesterday

    The Department's timeframes, targets and programmes highlight key components of our strategy to "secure cost-efficient, poverty-breaking integration across the transport system" by entrenching innovation, reprioritising budgets, reinvigorating the department's skills base and the agencies that report to us.

    The Development Bank of South Africa points out that investment in economic transport infrastructure lagged behind social infrastructure investment in the first years of democracy. Transport is about reducing the costs of doing business AND "improving the quality of life" of people and of "increasing workforce productivity."

    Development is more likely if "the infrastructure is purposefully managed and financed to deliver the services where or when the economy requires or people need, at prices affordable to both the economy and the individual." But "infrastructure provision needs to be sensitive to context in order to most effectively enable and support the translation of productive investment into efficient growth and equitable development."

    Coordination, and a "comprehensive, overall transport infrastructure funding strategy … (that matches) financial resources with identified needs to develop infrastructure in a rational, integrated and coherent fashion " are central to success.

    The Organisation for Economic Cooperation and Development describes South Africa's transport system as "stellar" in an African context, but notes that the quality is uneven and requires significant investment." It highlights government coordination as a major factor for success, and singles out roads as regular recipients of investment, but slams the railways and ports as the "weakest links in the South African transport system."

    Both reports provide a starting point for discussion, but there are important silences in them, such as our more recent efforts relating to rural strategies and in the public transport arena. Many challenges bedevil the transport system, but public transport, the freight logistics system, and safety and security of the transport system as a whole are critical to our project….

    …Transport currently contributes some 6 percent to GDP, despite an acknowledged negative impact of continued bottlenecks, non-transport related tariffs and other impediments. But the data shows that we have to exert more transport effort to achieve the same goals than comparative economies around the world. In short, we have to transport freight over much longer distances to create the same unit of GDP as other countries.

    The spatial concentration of economic endeavour in the hinterland is a major contributor to this unhappy situation, and it also influences our corridor traffic densities and invariably the cost of production. Furthermore, although expenditure on roads has increased quite dramatically and is set to continue across the MTEF, real expenditure is under pressure from sources such as the spiralling costs of bitumen. High fuel costs have also increased transport costs.

    Currently the imbalance between road and rail use is wholly inappropriate and getting worse. Heavy vehicle registrations have grown dramatically, while the locomotive fleet for General Freight Business has plummeted. The locomotive fleet for the profitable heavy haulage iron-ore and coal lines has increased by 83 percent over the same period. In short, general rail service capacity is declining, while service capacity to mining companies is outstripping the growth of the economy.

    These trends represent a major challenge to provide cheaper transport services where producers already face cost structure problems brought about through structural and spatial contexts. Government will introduce competitors across the entire rail network, as articulated in the NFLS, with the exception of the heavy haulage lines that are better suited to single operators. Our analysis of the entire freight market suggests that rail services (not infrastructure) supply is inadequate, while road supply (not infrastructure) is higher than levels of demand. The movement of appropriate cargo to rail is an imperative, but we must ensure that rail capacity actually exists to take up whatever shifts are needed.

    Corridor development is a core project. The Gauteng-Durban Corridor, for example, aims to optimise and integrate all activities along the corridor to improve efficiency. Linking City Deep, the planned Harrismith Hub, Durban Container Terminal, Dube Trade Port, the possible freight hub at Cato Ridge and other infrastructure and operational initiatives will greatly improve the situation.

    We have a better understanding of the growth and dynamics of the freight network now as a result of our experiences to date.

    There is an artificial divide between the first and second economy production systems, exemplified by an absent integrated transport network. We cannot starve the second economy participants from economic prosperity. Secondary rail network rehabilitations aim to support second economy integration with the first economy. Targeted investments, rather than large investments are required in these rural and second economy interventions. Current projects include the Kei Rail, Belmont-Douglas and Nkwalini upgrades.

    Self-contained and integrated rural development activity that envisages deep rural areas developing public and freight movements systems both to encourage economic development and interaction within these areas and facilitating access to the outside world and vice versa, are also critical interventions.

    The integrity of the whole transport system relies on adequate safety systems and regulatory regimes to protect people and cargo. Road safety is the most visible and pervasive of all safety systems. It must encompass a range of elements, including technical and engineering standards in road design, signage and of course vehicle safety. But it also involves policing and enforcement of regulations and laws, currently the responsibility of the RTMC and various locally-based structures.

    NB: The minister’s full speech as delivered in parliament yesterday can be seen at

    SA and Tunisia establish a joint business council

    by Zibonele Ntuli (BuaNews)

    Pretoria - South Africa and Tunisia have established a joint business council as part of strengthening bilateral economic relations between the two countries.

    The council is set to provide a regular forum for discussions and promotion of economic activities between enterprises in the two countries.

    It will provide a forum for both countries to meet, discuss and explore business opportunities in trade, investment, transfer of technology and services among others.

    It will help update both countries on economic policy matters and various economic developments, identifying obstacles prohibiting the expansion of bilateral economic cooperation.

    The council will further encourage the business community to participate in exhibitions in both countries, and also encourage small and medium enterprises to link up through one-to-one meetings.

    A memorandum of understanding was signed in this regard yesterday by the Chambers of Commerce and Industry South Africa (CHAMSA) and Chambers of Commerce, Industry and Handcrafts of Tunisia (UTICA).

    In 2002, the two countries signed an Investment Agreement and both had been participating in the Expo Africa Exhibition.

    "This is a story that links our countries in an unprecedented way," said Trade and Industry Minister Mandisi Mpahlwa while announcing that South Africa would ratify the agreement as legally required.

    "The trade between South Africa and north African countries has been very minimal but on the increase. It is a sign that with more contact between the business peoples of Africa more could be achieved."

    He called on the council to discuss a programme which would be supported politically.

    South Africa's exports to Tunisia are said to have grown "tremendously" from over R27 million in 2000 to over R40 million in 2005.

    South Africa's major exports there are paper and paper pulp, steel, laminated metal, acrylic fibres, human and animal vaccines, ethylic alcohols, cotton, pumps, steel tubes and pipes, automotive parts, tanning products, fertilizers, insecticides, chemicals, agric-equipment and exotic fruit.

    With Tunisia representing only 10 million consumers, it plays a major role in the northern region since it is regarded as a "springboard" to Europe, North Africa and the Middle East geographical with its location.

    The country exports to South Africa outdoor furniture, pasta, olive oil, cement, carpets, clothing, syringes, respiratory apparatus and fine porcelain tableware.

    Tunisian Minister of Trade and Handicrafts Slaheddine Makhlouf said trade exchange volumes remained below the potential for both countries; however they had recently started to grow.

    "Our trade and partnership should be reinforced in order to materialise the existing opportunities. I think that we must encourage contacts between businessmen in order to explore and identify the existing opportunities," said Minister Makhlouf.

    He added that the trade agreement concluded by both countries granting facilities to develop trade relations and promoting participation in economic and trade events held between the two countries respectively, deserved to be reconsidered and adapted to economic integration trends that were being conducted throughout the world.

    He explained that Tunisia had taken many steps towards its adhesion to the economic integration process in the African region.

    "Tunisia has also expressed to all African regional subgroups committed, particularly to those of which South Africa is a member, its will to initiate negotiations with each one of them and conclude similar agreements," he said.

    South Africa will participate in the International Services Fair (SISE 2006) and in the International Tunis Fair in June and November.

    COMOROS: Glowing Karthala puts authorities on alert

    Johannesburg, 30 May 2006 (IRIN) - On Grande Comoro, largest of the three islands in the Indian Ocean archipelago, Mount Karthala is colouring the sky red as volcanic activity continues. Initial fears of a full-blown eruption and lava flow have calmed, but authorities remain on the alert.

    The 300,000 people on the island have been admiring the glow above the crater in the night sky since Sunday, but have stayed put.

    image by Pieter Paxton / IRIN

    Piet Paxton, a spokesperson for the African Union Mission for Support to the Elections in the Comoros (AMISEC), told IRIN, "It is a boiling pot up there - a lava lake is forming but it is confined within the crater."

    AMISEC, which assisted in the smooth running of the recent presidential poll, took specialists from the Karthala Volcano Observatory and scientists from the University of La Réunion, a French possession in the Indian Ocean, on a reconnaissance flight over the crater on Monday morning.

    Based on their observations, the team suggested two possible scenarios for further volcanic activity: the fountain of lava could run until it was exhausted and cool down inside the crater, or the lava lake might drain from the crater, possibly coming into contact with ground water and causing an explosion that would spew ash and volcanic debris.

    According to a report by the UN Office for the Coordination of Humanitarian Affairs (OCHA), "authorities have activated the national emergency response preparedness plan" and set up an emergency task force that includes "government departments, United Nations agencies and the Comoros Red Crescent Society".

    The population is being kept abreast of developments through the media and there are vehicles on standby to evacuate people, should the need arise, the OCHA report said.

    The renewed volcanic activity has not threatened people's lives. "For now, things are still very calm," the UN Resident Coordinator in Comoros, Giuseppina Mazza, told IRIN.

    Karthala, which forms most of the landmass of Grande Comoro and is one of the largest active volcanoes in the world, has erupted, on average, every eleven years in the last 200. It erupted twice in 2005, affecting 40,000 in April and 175,000 people in November.

    After the last eruption, volcanic dust and debris covered extensive areas of the island, while toxic volcanic ash contaminated water supplies, raising concerns about the health of people and livestock, and its effect on agriculture in the polluted area.

    (This report does not necessarily reflect the views of the United Nations)

    Cape Town's V&A Waterfront up for sale

    by Shaun Benton (BuaNews)

    Cape Town - The Victoria and Alfred Waterfront, South Africa's premier property asset and a landmark tourist attraction, is up for sale.

    Maria Ramos, the group chief executive of giant state-owned enterprise Transnet Limited, announced the sale today at the Waterfront, along with Bulelani Ngcuka, chairman of V&A Waterfront Holdings.

    Transnet Limited owns a 26 percent stake in the Waterfront, while the Transnet Retirement Fund owns 22.6 percent and Transnet Pension Fund owns 7.8 percent.

    The biggest single shareholder, Transnet Second Defined Benefit Fund, has a 43.6 percent stake.

    The disposal of this key asset by Transnet is in line with Ms Ramos's turnaround strategy for the major state-owned enterprise with the intention to dispose of non- core assets and to release cash for the giant company's key port, rail and pipeline infrastructure investment programmes of R64 Billion.

    While at the moment only 74 percent of the V&A Waterfront is up for sale, this may increase to 100 percent if the Transnet Retirement Fund, holder of a 22.6 percent interest, decides to sell.

    However, the Transnet Retirement Fund (TRF) may decide to up its holding to 26 percent in this real estate venture at the heart of Cape Town's economy, which attracts millions of tourists and has been internationally-recognised as a successful money-spinner.

    The TRF would make a decision on whether to sell off, increase or swap its 22.6 percent interest once final offers have been received or once the pricing for listing of the V&A Waterfront has been determined.

    Ms Ramos emphasised today that the sale would be conducted in a transparent and fair manner: "Transnet and the V&A-linked unitholders have decided to exit the V&A Waterfront via a structured, transparent, and equitable process."

    While an outright sale to a single bidder is the preferred outcome - there will be no disposal of individual properties - the sellers are running a dual-track process to ensure maximum value from the sale.

    This means that Transnet and the linked unitholders might choose to go for a listing process to realise the "maximum value" sought for what is likely to result in a lucrative sale for the state-owned conglomerate and its pensioners, pensioners-to- be and beneficiaries of the biggest shareholder, the Second Defined Benefit Fund.

    "The decision to sell is in part based on a desire to increase the liquidity of their investment profile and reduce the risk to beneficiaries of being exposed to one class of asset," said a statement released to the media after the press conference.

    Ms Ramos earlier said that she believed it "is the right time" for the disposal of this major asset, given the favourable market conditions currently existing. With the property sector having done particularly well over the last 10 years, "this is a good time for us to be selling our shares in the V&A Waterfront", said the Transnet boss.

    In a sale process that started today, interested parties will be required to pay a non-refundable R50,000 documentation fee and to sign a confidentiality agreement. Under other conditions of the sale process, no contact will be allowed with staff and management of the V&A Waterfront, or with any of the V&A Waterfront linked unitholders or their officers and staff without arrangement with the joint transaction advisers, journalists were told.

    Ms Ramos said she wanted to "make it quite clear upfront" that the stakeholders, or linked unitholders, reserved the right to switch to a listing process for the sale.

    Potential buyers will be evaluated according to a list of 100 points, of which up to 85 points will be for the actual purchase price, up to 10 points for Black Economic Empowerment criteria - using codes of good practice issued in this regard by the Department of Trade and Industry - and up to five points will be for the retention of the 750 fulltime employees of the V&A Waterfront.

    Giving some idea of the money that is likely to change hands - Ms Ramos refused to entertain any hypothetical figures regarding an expected purchase price. The Transnet group chief executive said that potential buyers would lose one of the 85 points emanating from the qualifying purchase price for "every R25 million below the highest price [offered]."

    A single buyer is preferred, and offers would only be considered if they were for "at least a 25 percent interest".

    Ms Ramos said she hoped to have the sale concluded by September.

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