Ports & Ships Maritime News

Oct 29, 2008
Author: P&S

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  • First View – RSS JAMES COOK

  • Transnet posts pleasing revenue returns

  • No crooks or corruption in fast Walvis Bay

  • Govt has second thoughts on limiting export of scrap metal

  • Piracy Report – NATO ships begin operations

  • Nigeria’s Yar’Dua hints at strengthening naval presence

  • Oil drops below 60 dollars a barrel

  • Pic of the day – MAGNATE


    First View – RSS JAMES COOK

    The British research vessel RSS JAMES COOK arrived in Cape Town harbour yesterday morning (Tuesday) on a short visit. The 89.5m long, 18.6m wide vessel which displaces 5,800 tonne ship was launched in 2006 as a replacement for the now retired RSS CHARLES DARWIN, and operates with the Natural Environment Research Council (NERC) across a broad spectrum of the world’s oceans. RSS James Cook has been designed as a multi-disciplinary science platform for ocean exploration using sophisticated instrumentation and equipment including remotely controlled vehicles. She has an operating speed of 12 knots and can remain at sea for a maximum of 50 days. The ship’s accomodation includes berths for 32 scientific personnel, 9 officers and 13 crew and technicians. Picture by Aad Noorland

    Transnet posts pleasing revenue returns

    Johannesburg, 28 October – Transnet Limited has announced a set of pleasing results for the financial half-year ending 30 September 2008, as compared with the same period last year, in which revenue increased 12.9% to R16.8 billion for the half-year.

    In its statement the state-owned company said its focus on volume-driven revenue growth has continued to pay off while the results came amid a worsening global economic downturn.

    Each of the company’s five divisions showed revenue growth with four operating divisions also increasing their volumes. The exception was Transnet Freight Rail (TFR, formerly Spoornet) but Transnet said that importantly, there was evidence of across the board increases in the number of containers railed and handled by TFR, Transnet Port Terminals and Transnet National Ports Authority.

    It says the significance of this is that Transnet has identified containerised traffic as one of the key drivers of growth and is important in reducing the cost of doing business in South Africa, Transnet’s mandate from its sole shareholder.

    “Consequently, the Company is investing significant capital to upgrade and expand its container handling capability in rail and the ports. In the review period, TFR’s general freight business (GFB) transported 9% more containers than it did last year and growth in container volumes was the main driver of revenue increases at both TPT and TNPA,” the company says.

    The interim results showed that EBITDA was up 6.8% to R6.6 billion, Gearing increased to 32.2%, capital expenditure rose 22.3%to R8.3 billion while cash generated from operations decreased by 15.6% to R5.2bn.

    Transnet says the results show significant progress in the roll-out of its five-year R80 billion capital expenditure programme. Having invested R8.3bn in capital for the period under review, Transnet will spend a further R12.6bn in the second half of the year.

    “We are pleased with the success of our capital investment strategy which is reflected in the discernible shift in the bias of our spending towards activities that expand, instead of replacing, capacity for our clients. This means that our strategy to create appropriate capacity ahead of demand for our existing and prospective clients is being implemented”, said Maria Ramos, Transnet Group Chief Executive.

    “Over the last two years, we have primarily used proceeds from the disposal of our non-core assets as well as our cash flows generated from operations to fund our infrastructure expenditure plan. As the capex programme intensifies, we will progressively use the debt capital markets for funding, relying on our considerably strengthened balance sheet to do so.

    “Our gearing has risen to 32,5% which is well below our targeted range of less than 50%. This is indicative of the significant capacity we have to further tap the debt capital markets,” she said.

    The company has made known its plans to tap the debt capital markets to part-fund the R80 billion it intends spending on expanding its existing ports, building new container handling facilities, building a new pipeline and buying in excess of 400 new and like-new locomotives over the next five years.

    But importantly, operational improvements are continuing across the five business units. Whilst volumes railed on the iron-ore export line improved by 5% to 15,9 million tons (mt) and those moved on TFR’s GFB held steady at 43,5 mt, volumes on the coal export line (from mines in Mpumalanga to Richards Bay port) decreased by 6% to 29,9 mt due to constraints such as infrastructure breakdowns and two big derailments at TFR.

    TNPA and TPT both performed well, growing revenues by 9,9% and 14,7%, respectively, driven mainly by container volumes, whilst Transnet Pipelines’ revenue grew 26% to R757 million for the period, benefiting from increased volumes for all major products.

    Mr Fred Phaswana, the company’s chairman, said the Transnet Board was continuing to assess the impact of the global economic environment on Transnet’s business plans

    “We will make necessary amendments to these plans if circumstances require these,” he said.

    Transnet’s spending to date of R8.3bn included the following major capital projects:

    Iron Ore Expansion R961 million
    Iron Ore Expansion R961 million
    Coal Line expansion – R222 million
    Ngqura Container Terminal – R1 billion
    Durban Harbour Entrance Channel widening and deepening – R682 million
    Cape Town Container Expansion – R504 million
    New Multi-Product Pipeline – R426 million
    Capitalisation of infrastructure and rolling stock maintenance – R1,6 billion
    Fleet renewal and modernisation programme – R457 million
    Re-engineering of Durban Container Terminal – R299 million
    Acquisition of floating craft (tugs and dredger) for TNPA – R154 million
    Bulk investments for Richards Bay and PE Manganese – R211 million
    Port National Security – R142 million

    No crooks or corruption in fast Walvis Bay

    There’s nothing like straight talking to capture the attention of an audience, which is what a gathering in Gaberone (Botswana) was treated to last week.

    The occasion was a presentation by the Walvis Bay Corridor Group (WGCB) which is a marketing body targeted to promote and sell the respective transport corridors leading to the Namibian port of Walvis Bay.

    WGCB recently opened an office in Johannesburg to promote its interests in South Africa. Much work has already been done in Zambia and Zimbabwe to promote the corridor through the Caprivi but the real prize for both Walvis Bay and the WGCB would be to gather business in from South African importers and exporters.

    Delegates heard Business Development Manager Zunaid Pochee say that the port of Walvis Bay had good security and zero pilferage and enjoyed a much shorter transit time than any comparative South African port. Overland transit time from Walvis Bay to Gaberone was, for example, just one day while the time to Gauteng was 48 hours. Transit time to Lubango in southern Angola is also one day and to Zambia is three days.

    On top of that the port at Walvis Bay experienced no congestion and excellent service, and has a capacity to handle up to 8 million tonnes of cargo annually. There are 3,000 ship calls a year (that includes fishing vessels) and the port is equipped with a rail service and has excellent ship repair facilities including a floating dock and a hub for oil rig repairs.

    In addition border operational hours with Botswana have been harmonised to facilitate cross border activity while since June this year harmonised axle load limits have been put in place. Transit cargo is now allowed to pass through all borders along the Trans-Kgalagadi Corridor (Trans-Kalahari) using a single customs document and ensuring that commercial traffic is cleared within 30 minutes at the border points. A 24-hour border operation is expected to be in place by May 2009.

    Govt has second thoughts on limiting export of scrap metal

    The South African Government has agreed to place a moratorium on the restrictions of scrap metal exports after meeting with representatives of the industry. Instead it will now await the findings of an independent study into the value-chain of the scrap metal industry.

    The government earlier this year announced it was considering placing a limit on the export of scrap metal exports after an investigation revealed the existence of a cartel running the scrap metal industry. One well-known company was fined R146 million because of its role with price fixing within the cartel.

    Measures have been introduced to tighten export procedures including the imposition of export taxes.

    Local scrap metal users were responsible for bringing the matter before government, with claims of a shortage locally which has been refuted by the National Recyclers Association.

    Piracy Report – NATO ships begin operations

    One of the ships of the NATO fleet that was despatched to the coast of Somali has completed its first mission of escorting a vessel carrying peacekeeping supplies into Somalia. The Nato ships began arriving during the past weekend and will remain on station to escort UN sponsored aid shipments to the troubled Horn of Africa country.

    Meanwhile Somali pirates holding the Ukrainian Ro-Ro ship FAINA with its cargo of tanks and other weapons have threatened to dump the weapons into the sea after the ship’s owner/operators refused to pay a ransom for the vessel.

    The seizure of the ship has attracted world attention because of the nature of the cargo, in particular 33 Russian made tanks that are believed to be destined for South Sudan, although one report suggests they were intended for Eritrea and others claim they were for Kenya.

    The owners of the FAINA, a company identified as Tomex Team says the pirates are at liberty to dispose of the cargo as they see fit. The weapons are worth an estimated USD35 million. Tomex says it is prepared to negotiate only for the release of the crew, which includes two Russians, a Latvian and 17 Ukrainians. The ship’s master died of a heart attack shortly after the vessel was seized.

    There are fears of contamination of the sea if the tank ammunition is dumped – this includes some 14,000 rounds which are reportedly covered in a depleted uranium penetrator.

    While ships from NATO, Russia, the US and several East Asian countries gather in the waters around Somalia, and appear not to be clear on rules of engagement or what to do in the face of the piracy (the NATO ships are officially on station to perform escort duties for UN aid vessel), a privately-owned US security company, Blackwater, says it is ready to send a ship to the area to help protect merchant vessels. The vessel is a former research ship MCARTHUR which was converted in 2006 for security purposes.

    Included in its ‘armoury’ are two helicopters, several rigid inflatable boats and 35 armed security personnel. Critics of Blackwater say the company has a reputation of “shooting first and asking questions later”.

    In West Africa armed gunmen attacked and seized a ship belonging to Canada’s Addax Petroleum. The vessel was carrying a number of oil workers including seven French and Nigerian citizens who managed to regain control of their ship after a short gunfight.

    Nigeria’s Yar’Dua hints at strengthening naval presence

    Nigeria’s President Umaru Yar’Dua has hinted that his government will strengthen the country’s navy in the Gulf of Guinea and off its own coast to be able to provide adequate security from both local and global challenges.

    This was said on his behalf at the opening ceremony of the third annual Chief of Naval Staff being held in Yola. He said Nigeria would acquire equipment to enhance its operational efficiency as well as increasing the number of personnel within the navy.

    Oil drops below 60 dollars a barrel

    Good news on the shipping front was the price of oil which dropped below the USD60 a barrel mark yesterday, reaching a 17-month low in the face of worries of a global recession. The price later levelled at just above the 60 dollar mark at the close of day trading in London.

    Traders said the price fell to a 17-month low because of fears that oil demand will suffer amid a global recession. One trader pointed out that oil prices were more or less tracking the movements of global equity markets.

    Dealers pointed out that Opec had also opted to cut supply.

    Pic of the day – MAGNATE

    The bulker MAGNATE of Wisdom Line in Cape Town harbour with a cargo of logs. Picture by Ian Shiffman

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