Ports & Ships Maritime News

Jan 18, 2008
Author: P&S

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  • Sage advice from Eskom over Coega

  • Mombasa – Uganda railway line reopened

  • Beira petroleum tank farm is commissioned

  • Kuwait’s Agility buys Kenyan freight forwarder Starfreight for $4.1 million

  • International shipping news

  • Pic of the day – CELESTINE RIVER


    Sage advice from Eskom over Coega

    As the country reels from ongoing power cuts and with Eskom powerless (pun unintentional) to meet an increased demand for electricity, criticism is continuing to mount, reaching the unprecedented point this week of the Public Protector writing to ask for an urgent explanation of the rolling cuts.

    Now Eskom has advised government to cut back on developments and to stop marketing the country for the next five years.

    According to yesterday’s Business Report Eskom informed government that it is ‘inappropriate to be advertising South Africa as an investment destination with low cost electricity. You don’t sell what you don’t have,” said Eskom’s finance director Bongani Nqwababa.

    Instead of reacting to Eskom’s ‘effrontery’ and accusing it of poor planning (there’s evidence that Eskom was denied permission to expand ten years ago), South Africa should now stop and take careful stock of what Eskom is saying. The bald facts are that South Africa can for a while no longer afford large new energy-guzzling projects of the sort used by government to bolster and promote politically-motivated schemes, such as a new industrial base around the port of Ngqura in the Eastern Cape.

    The incentives that Eskom was forced to make available to Alcan – since inherited by Rio Tinto – would have crippled any private company and made it impossible for them to proceed. Not only is the power utility required to provide low cost electricity for the aluminium smelter at a guaranteed low rate but it has to transmit the power in over enormous distances – providing enough energy to light up the equivalent of another Nelson Mandela Municipality - an area which includes the city of Port Elizabeth and industrial centre of Dispatch.

    This at a time when the rest of the country is being crippled by power shedding as Eskom tries to ration out what inadequate supplies it has.

    In addition Eskom is having to investigate building a highly contentious nuclear power station in the Eastern Cape to supplement this new requirement.

    The aluminium smelter at Coega will consume something in the order of 1350 Megawatts which is 3.5 percent of Eskom’s total production at present.

    According to Nqwababa Eskom would rather pay penalties to Rio Tinto than have to go to the expense of building a new power station for this purpose. What his statement seems to suggest is that Eskom would be happy to be out of the contract, which raises previously unanswered questions whether Eskom would have agreed to partner the smelter development were it given the choice.

    As it is Eskom has to return to service a number of elderly mothballed coal-fired power stations – something that will take a number of years to effect, while at the same time it is having to develop and build new sources of energy – be they nuclear, diesel or coal powered.

    It will be at least 2013 before this additional power is available, which is when Eskom suggests government should consider resuming its marketing of South Africa as an investment destination with low cost electricity.

    Eskom’s statement affects not just the Coega project but also expansion plans for BHP Billiton’s Hillside aluminium smelter at Richards Bay and possibly the Mozal smelter outside Maputo in Mozambique. But it is at Coega that government has lent over backward to bring in that elusive animal, an ‘anchor tenant’, which it now thinks it has in Rio Tinto. The full costs of this project including the new port have never been disclosed.

    With it being likely that Eskom’s appeal to government for a five or six year moratorium will be summarily dismissed – such is the political imperative of the Coega project – South Africans can expect the costs, hidden or otherwise, to rise even higher.

    Mombasa – Uganda railway line reopened

    The strategic railway line between the Kenyan port of Mombasa and Kampala in Uganda has been reopened, reports Uganda’s New Vision.

    The line was damaged in the unrest that swept Kenya following the election results, with a section near Kibera outside Nairobi being damaged when housing shacks were set alight.

    Another factor that held up rail operations was the sudden scarcity of fuel for locomotives with trains being unable to complete full return journeys. With the resumption of fuel loading from Mombasa this obstacle has been lifted and trains which were reported to have recommenced from Monday are now operating the full length into Kampala.

    Kenyan authorities say that security along the railway route has been restored while earlier this week the managing director of Kenya Ports Authority, Abdallah Mwaruwa gave assurances that security within the port was tight and that cargo was being cleared normally.

    Mwaruwa said that road transport had also resumed and that the crisis concerning backlogs at the Mombasa port, particularly the container terminal, were now over.

    However it is expected that it will take another week before the full backlog has been cleared.

    Beira petroleum tank farm is commissioned

    A new fuel tank farm at the port of Beira has been commissioned recently by the presidents of Mozambique and Zimbabwe.

    The nine tanks have a capacity of 95,000 cubic metres of various types and grades of fuel. Construction of the tanks took 18 months and cost US$25 million and the complex is equipped with the latest sophisticated safety controls. The project came into service almost a year ago but hadn’t been officially inaugurated.

    Casimiro Francisco, Chief Executive Officer of Mozambique fuel company Petromac, said after the ceremony that the two presidents had met to sign the protocol to develop the Beira Transport Corridor which consists not only of the road and rail between the port city of Beira and the Zimbabwe border but the Sena railway line to Malawi as well, which is currently being rebuilt by the Indian company Rites. The Indian company will also operate the line.

    The port of Beira and the railway to Zimbabwe were built from 1898 by the British South Africa Company of Cecil John Rhodes to provide easy access to Southern Rhodesia. The original railway, known at the time as the Mashonaland Railway Company, was built to simple 2ft narrow gauge but was soon widened to the more familiar Cape gauge of 3ft 6ins, which is in use throughout most of southern Africa.

    A secondary line at Dondo outside Beira leads off in a northerly direction to the sugar centre of Sena on the Zambezi River before crossing the river and heading northwest into the Tete Province and the Moatize coal mines, which are currently being redeveloped.

    Another secondary line branches off from Sena and heads further north into Malawi, providing that landlocked country with a second railway route to the sea.

    Because of the economic problems being experienced in Zimbabwe rail traffic along the Beira Corridor is not particularly high, although the corridor can be used for traffic from Zambia, Botswana and the DRC.

    Mozambique’s President Guebuza said the port’s new fuel terminal would provide great stimulus to regional economic integration. "From Beira, the supply of fuel to the region is guaranteed, both through the Corridor and through the pipeline", he said.

    The pipeline, which is owned by the Mozambique - Zimbabwe Pipeline Company, carries fuel from Beira to the eastern Zimbabwean city of Mutare.

    Kuwait’s Agility buys Kenyan freight forwarder Starfreight for $ 4.1 million

    Kenyan freight forwarder and Custom Clearance specialist Starfreight Logistics Ltd has been bought out by a Kuwaiti company, Agility, in a deal that cost the Kuwait company US$4.1 million.

    Agility said the acquisition forms part of a strategy to expand into Africa as a means of reducing its reliance on US military contracts in Iraq and other neighbouring countries.

    Agility began buying up a number of smaller companies last year as it seeks to reduce its dependency in the event of a gradual military withdrawal from the Arab region. The Kuwaiti company employs 29,000 people in more than 550 offices across 100 countries and has an annual revenue of US$5.6 Billion.

    Starfreight, which is headquartered in Nairobi provides logistics and transport freight forwarding and clearing services to several areas of Africa. The company has two offices in Kenya and employs about 150 people and includes in its services warehousing and project forwarding, transport, cross-border documentation and transport, air freight and customs examination.

    Among Starfreight's top customers are Hewlett Packard, Mitsubishi and Nestle. Their regional clients include mostly large Kenyan manufacturers in various sectors such as automotive, pharmaceutical, plastic products, glass, paper and agricultural equipment.

    International shipping news

    NYK slows down

    NYK has joined shipping lines that are cutting speed in order to save on fuel costs. Company president Koji Miyahar said in his 2008 New Year’s message that the 740 ships owned and operated by NYK must cut speed by 10 percent to effect fuel savings if the company is to remain in the black.

    “A 10 per cent slowdown of voyage speed will produce more than a 25 per cent saving of fuel oil,” said Mr Miyahara, adding that fuel prices, rising from US$164 a ton five years ago to $500 today, have got to the point where the shipping line must adopt a new business model to stay profitable.

    “If a single containership daily consumes 200 tons of fuel costing $ 500 per ton, its fuel cost will reach as high as $100,000 in just a day,” he said.

    He said that efforts were also called for to improve business patterns, such as reviewing the freight rate structure while obtaining customers' understanding.

    In December NYK announced that an associate company had produced a new engine governor that could adjust the fuel injection volume in a ships’ main engine cylinder to maintain a consistent rotation of the propeller despite wave disturbance, thereby maintaining the ships’ speed and helping also to save on fuel. The governor was being introduced this year on nine NYK ships – seven 6.500-TEU container ships and two car carriers. In the third quarter additional ships would be fitted.

    Ice Prince

    The UK is taking steps to minimise the navigational and environmental impact of the loss of cargo and possible oil spillages following the sinking of the cargo ship ICE PRINCE, which went down off the English Devon coast this week. The crew of 20 were safely evacuated when the ship took on a dangerous list as its cargo shifted.

    Ice Prince was carrying about 2000 tonnes of untreated sawn timber of different sizes. Some of this was deck cargo which broke free on board and helped cause the sinking. Cargo owners are in discussion with authorities with regards the cleanup of cargo but the timber is expected to start coming ashore along the coast of Hampshire, Dorset and East Sussex.

    There are also reports of a light sheen of oil on the sea surface near the wreck site but authorities are hoping that rough sea conditions will help break up any concentration. The ship was carrying just over 300 tonnes of fuel oil.

    Meanwhile police forces along the English south coast have been alerted to act on behalf of the Receiver of Wreck in the event of wreckage and cargo coming ashore.

    Pic of the day – CELESTINE RIVER

    Click on image to enlarge – with some browsers click twice

    The Bahamas-flagged, British-owned and managed LNG tanker CELESTINE CARRIER (117,895-gt), which entered service in 2007, has been at anchor in Table Bay for the best part of a week awaiting orders to proceed to Nigeria to load cargo. Ian Shiffman arranged to fly out over the anchorage and photograph the ship, using a 500mm lens to achieve this result. Picture by Ian Shiffman

    Don’t forget to send us your news and press releases for inclusion in the News Bulletins. Shipping related pictures submitted by readers are always welcome – please email to info@ports.co.za

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