Ports & Ships Maritime News

Aug 31, 2006
Author: P&S

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  • Transport minister reveals governments commitment to logistics infrastructure

  • Bunker delays could continue

  • New shipping service proposed for West Africa

  • SA, Namibia and Angola sign marine management pact

  • China offers to aid Rwanda railway project

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    Transport minister reveals government’s commitment to logistics infrastructure

    The following is an excerpt from a speech given in Johannesburg last Friday by the Minister of Transport, Jeff Radebe, to visiting members of the American Chamber of Commerce on developments in transport infrastructure. The speech contained important references to government’s commitment on spending for infrastructure in the ports and railways.

    Regarding freight transport, Transnet has committed to invest R41 billion over the next 5 years to improve services and ensure seamless freight logistics. Investments will be made in the areas of ports, pipelines and rail. Of the rail portion, R8.9 billion will be invested in the coal line and R2.7 billion in the iron line, while R10.8 billion is planned for improving infrastructure in the General Freight Business.

    Eskom and Spoornet are also concluding talks to develop a new coal rail line that will supply the Majuba power station, estimated at about R2 billion. Government is also finalising a rail branchline development strategy, which will pave the way for the development of an investment plan for branchlines across the country. Currently, three projects are underway i.e. the Kei Rail, Nkwalini and Belmont-Douglas at costs of over R100 million, R10 million and R89 million respectively.

    Transnet is planning expansions at most of South Africa's ports, as well as a R3.2 billion rand investment in the new port of Ngqura. Some of the major investments will be made at Durban port, i.e. R6 billion to improve the car and container terminals and Maydon Wharf. Another R6 billion will go toward the expansion of the Bayhead complex. Cape Town and Richards Bay will also get around R billion each worth of improvements (amount missing in transcript). These investments are critical for increasing the throughput of our ports in line with the National Freight Logistics Strategy.

    On the passenger rail side, Government is finalising the National Rail Plan and associated business plans, which will focus on upgrading infrastructure and improving services in priority corridors across the country, as part of our efforts to improve public transport in our country.

    As part of our preparations for the 2010 World Cup, R3.5 billion has been allocated for public transport infrastructure. R241 million, outside of the above figure, has already been allocated to host cities for the improvement of public and non motorised transport in the vicinity of the stadiums; in Central Business Districts and stadia linkages; in key corridors linking residential areas with CBDs and stadia; as well as in communities where people live. The R3.5 billion will be allocated across the next three years to 2009 with R700 for 2006/07, R1.8 billion in 2007/08 and R1 billion in 2008/09. Projects to be funded include dedicated public transport infrastructure, interventions to ensure public transport friendly routes, non-motorised transport facilities including pedestrian facilities, and intelligent transport systems.

    As identified in the process culminating in the formulation of the Accelerated and Shared Growth Initiative for South Africa (ASGISA), our country has some key inhibiting factors that are constraining the growth of our economy. These constraints are evident at both the macro economic and sectoral levels and need targeted focus to be effectively addressed. They include a need for job creating activities; the development, acquisition and retention of skilled personnel; ensuring sufficient amounts of resources (i.e. delivery capacity - funds, human capital, materials, equipment and machinery); input sector focus on supporting economic growth sectors; reduction of input costs; regulatory environment constraints; and Government specific organisational and delivery capacity, among others.

    We regard Job creation an area critical for first and second economy integration. As we know, our economy has not created jobs faster than there are entrants to the market, notwithstanding the positive growth we have been able to sustain for several years. From an infrastructure perspective delivery through the Expanded Public Works Programme (EPWP) is critical for success in job creation. This approach involves the application of labour intensive methods to provide infrastructure. Success of this programme relies on the mobilisation, training and effective use of the workforce on site to ensure a streamlined and high quality delivery of infrastructure. This approach has meant a change from conventional practice in the construction industry, and in certain cases the learning curve has been steeper than expected causing delays in programme rollout. However, Government is geared up to address key challenges in this regard.

    Skills shortages have also been found to be a major inhibitor to the rollout of key government programmes. This is so for both Government internal capacity and industry capacity. The recent study by the South African Institution of Civil Engineering called "Numbers and Needs" clearly articulates the challenge we face in the area of engineering, and the picture is equally worrying in other fields within and outside of the transport sector.

    Just recently I was told that in Gauteng alone in excess of R50 billion will be invested in infrastructure projects in the next 5 years, and all these will be competing for the same construction industry capacity. It is thus very necessary that industry supports Government in implementing capacity development initiatives such as the Joint Initiative for Priority Skills Acquisition (JIPSA) to bring the urgently needed skills to South Africa, while also rolling out our medium to long term capacity development strategies.

    The construction industry not only faces a challenge in mobilising human capital, but the sheer demand for construction will put a strain on the supply of materials such as cement, steel, concrete, and other raw materials. This will particularly be a problem in places such as Gauteng where projects such as the Gautrain, the Freeway Improvement Scheme, SARCC/Metrorail infrastructure improvement programme, JIA expansion, and stadium development are all expected to happen at the same time.

    This period will also require heavy machinery and equipment supply, which will be thinly spread across the various projects. Going back to human capital, specialised skills such as project management, engineering design, artisanry will be highly sought after. This presents a threat that is already being observed in industry, that of price inflation in view of the increase in demand. This trend needs to be arrested soon, otherwise team South Africa will generate less infrastructure per allocated spend.

    The National Freight Logistics Strategy identified the key bottlenecks in the logistics system that inhibit seamless movement of cargo, as well as increase the cost of doing business in South Africa. The strategy went further to define a vision for seamless logistics and identified the necessary key interventions to improve this situation. Our main challenge now is to accelerate the rollout of the strategy to ensure implementation of elements such as economic regulation in the rail and port environments, the improvement of rail infrastructure, rolling stock and operations, the introduction of competition to bring down costs and improve service and the achievement of an appropriate modal split of cargo movement.

    Among others, environmental regulations were identified as a challenge, the sheer time it takes to obtain the go ahead to initiate development and the cumbersome nature of the processes involved. Many projects across various sectors are held up by this agreeably important step, which urgently needs simplification and streamlining. However, Government has realised this challenge and is working towards its resolution, as evidenced by the introduction of new EIA regulations early this year.

    As you hear from this input, we have a long way ahead. The success of these plans depends on all parties, the private sector, government and civil society playing their part. We implore on you to identify areas of mutual benefit that would bolster our investment program.

    Bunker delays could continue

    The shortage of bunker fuel at South African ports may continue for longer than anticipated following the announcement that the Durban Sapref Refinery, which is operated jointly by Shell and BP, has extended its maintenance shutdown beyond the end of August.

    Most of the refinery units were due to begin starting up next week after their annual shutdown for maintenance. The shutdown left a chronic shortage of bunker fuel at Durban and Richards Bay and spread further afield to Cape Town, forcing the diversion of a number of ships.

    Sapref has now extended the shutdown period by at least another week to provide more time for some of the units, which it says haven’t been able to complete the maintenance programme in time.

    The country’s supply of petrol and diesel has not been adversely affected this year, thanks mainly to the importation of diesel fuel from India to cover reduced supplies from the local refineries. However bunker fuel, which is a byproduct of the refining process was not imported, leading to the shortage of supplies.

    Shipping companies with contracts for bunker fuel are given preference for their requirements but other vessels that arrive in the hopes of taking on fuel are in some cases finding themselves being turned away.

    The Sapref refinery normally produces 180,000 barrels a day. Durban’s second refinery, Engen has been unable to keep up with demand and there have been inexplicable shortages at Cape Town’s Chevron refinery.

    Meanwhile gale force winds along the KZN coast yesterday and on Tuesday afternoon brought about a severe disruption to ship movements and cargo working at the two ports. The strong winds coincided with high seas along much of the South African coast.

    New shipping service proposed for West Africa

    According to reports a Moroccan shipping company is studying the feasibility of establishing a new shipping service between Tangier, Casablanca and other West African ports.

    The company already operates a service to Senegal and is keen to expand to additional West African ports, including reopening the Dakar-Casamance line, which closed in 2002.

    SA, Namibia and Angola sign marine management pact

    by Shaun Benton, BuaNews

    Cape Town - South Africa, Angola and Nambia signed an interim agreement on Tuesday to formally establish the Benguela Current Commission, allowing for their joint management of the current's marine resources.

    The Benguela current extends from east of Port Elizabeth and north to Angola's Cabinda province.

    Environmental Affairs Minister Marthinus van Schalkwyk joined ministers and deputy ministers from Namibia and Angola to launch an institutional structure that will link the three countries in the management of the Benguela Current Large Marine Ecosystem, one of richest and most productive marine ecosystems on earth.

    The agreement was signed against a stunning backdrop of sharks and large fish at Cape Town's aquarium.

    The Benguela Currrent Commission is the culmination of over 10 years of shared efforts by scientists from Angola, Namibia and South Africa who began to share knowledge and understanding of this rich stretch of ocean in 1995.

    Namibian Minister of Fisheries and Marine Resources Dr Abraham Iyambo signed the interim agreement to establish the Benguela commission with his counterpart Mr Van Schalkwyk, while, as Angolan protocol would have it, the signing by Namibia's northern, oil-rich neighbour was delayed by the absence of its Minister of Fisheries, who was represented by his deputy, Pedro Joao, who left the formality for his senior at a later stage.

    The three countries will collectively manage trans-boundary environmental issues such as shared fish stocks and will work together to mitigate the impacts of marine mining and oil and gas production on the marine environment.

    With the support of the Global Environment Facility (GEF), which finances environmentally sustainable projects and its implementing agency, the United Nations Development Programme (UNDP), this collaborative effort has now resulted in the Benguela Current Commission, the first of its kind in the world.

    The GEF has been holding its third assembly in Cape Town this week.

    Mr Van Schalkwyk thanked the GEF, whose new chief executive, Monique Barbut, was present, as well as the governments of Norway and Germany, along with Birdlife South Africa and the Worldwide Fund for Nature for their support of the Benguela Current Large Marine Ecosystem programme (BCLME) and the earlier Benguela Environment Fisheries Training Interactions Programme.

    Now in its fifth year, the Benguela Current Large Marine Ecosystem has already allocated more than US $ 10 million in support of 75 scientific and economic research projects in the region.

    One of the concrete results of the scientific collaboration is the implementation of early warning systems to monitor the effects of climate change on the region's ecosystem, which are seen in increased storm activity and the gradual migration of fish stocks.

    For the past few years, fisheries scientists have noticed a marked shift eastwards to several species endemic to the continent's west coast, including rock lobsters and sardines, as well as several bird species, which are now breeding hundreds of kilometres further east than they did several years ago.

    Global climate change is being looked at as a possible cause behind this migration, which has potentially devastating consequences not only for marine and bird life but for the west coast fishing industries that support thousands of jobs.

    China offers to aid Rwanda railway project

    As Africa proceeds further with the rejuvenation of its ailing railway networks, China has offered to fund a study into the feasibility of a railway project linking the Burundi and Rwanda capitals of Bujumbura and Kigali.

    Local press reported this week that a visiting senior Chinese Communist Party member had announced that China is prepared to finance the feasibility for the construction of the railway. Hopes of building the railway had earlier been dashed when the African Development Bank failed to provide funds for the project, forcing the project to be put on hold.

    Did you know that Ports & Ships lists ship movements for all ports between Walvis Bay on the West Coast and Beira on the East Coast?

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