Ports & Ships Maritime News

Feb 10, 2010
Author: Terry Hutson

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  • First View – ELIZE

  • Transnet unveils new funding milestone

  • Piracy – Shipping Association warns that Somali piracy methods could be copied

  • Naval base planned for Walvis Bay

  • Interesting salvage ruling involving parties acting in the course and scope of statutory duties

  • Secretary-General calls for stronger partnership for African development

  • News clips – Keeping it brief

  • Today’s recommended Read – Wider Panama Canal could change shipping

  • Pics of the day – OMEGA BAY and PURPLE BEACH


    First View – ELIZE

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    The Durban-based Irwin & Johnson prawn trawler ELIZE (DNA67) prepares to come alongside the fishing wharf at Maydon Wharf. About a year ago the Elize recorded an unexpected catch off the KZN coast. Fishing at a depth of 400m a 3.7m long Oarfish was caught and later taken to the Oceanographic Research Institute at uShaka Marine World for identification purposes. Because of its elongated shape the Oarfish may have given rise to early myths of large sea serpents – the fish resembles a long snake or eel and is the longest of all the bone fishes, with specimens of up to 12 metres being listed. The fish is relatively common in all central latitudes. Picture by Terry Hutson

    Transnet unveils new funding milestone

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    Chris Wells

    Johannesburg, 9 February 2010 - Transnet Limited has successfully established its USD2 billion Global Medium-Term Note Programme (GMTN) on the London Stock Exchange, heralding a significant step forward in the implementation of its plan to fund its R80.5 billion infrastructure investment programme.

    The GMTN will enable the state-owned freight transport and logistics company to issue notes/bonds in either the United States or European Debt Capital Markets when market conditions are favourable and cost competitive. With the GMTN in place, Transnet does not have to go through the cumbersome, lengthy and costly process associated with preparing the legal documentation required for listing a bond each and every time it wishes to raise debt funding.

    Commenting on the milestone, Acting Group Chief Executive, Chris Wells, says: “This achievement will enable us to tap international markets to complement our R30 billion Domestic Medium-Term Note Programme (DMTN). Crucially, it will help us to further diversify our sources of funds – a key objective of our funding strategy.”

    Through the launch of the GMTN, Transnet will become the first South African state-owned enterprise to tap international markets without an explicit government guarantee in recent years. Transnet is a self-funding entity which receives neither government subsidy nor explicit government guarantees. It borrows on the strength of its balance sheet.

    While Transnet says it is confident that it offers an attractive investment proposition, the company is planning road shows in key centres in both the US and UK to assess investor appetite for a possible debut issue.

    “We are confident of the attractiveness of our portfolio of projects and, with the successful establishment of the GMTN, we have met some of the most stringent governance and disclosure standards in terms of Regulation S 144A (as required for any company wishing to issue notes to the US investor community). We believe investors will find Transnet’s offering compelling given their drive for infrastructure investment in well-managed companies in developing countries with sound economic management,” Mr Wells adds.

    Transnet plans to raise about R35 billion in the medium term to fund its capital investment programme.

    So far this financial year Transnet has raised over R24 billion and has concluded bilateral loans worth R7bn. Transnet recently signed the equivalent of a €200 million loan with the French Development Bank AFD while the Japan Bank for International Cooperation provided funding of ¥35 billion towards the harbour widening and deepening at the Port of Durban. Other financing has come from the Finnish ECA Finnvera, the Dutch ECA Atradius, the American Family Life Assurance Corporation (¥15 billion) while locally Transnet has raised over R8 billion in bonds on the South African local debt market.

    The capital funding is going towards the following projects:

    The Sishen-Saldanha Iron Ore expansion programme.
    Cape Town container terminal expansion.
    Ngqura port and container terminal.
    The Port of Durban entrance channel widening.
    A new multi-product pipeline.
    Nearly 500 new locomotives for Transnet Freight Rail.
    Expansion of the coal line to Richards Bay.

    Piracy – Shipping Association warns that Somali piracy methods could be copied

    The success and methods of Somali pirates may easily be copied elsewhere in the world, warns the Singapore Shipping Association.

    “As SSA, we are very concerned with the deteriorating situation in the Somali basin. In the absence of any firm response from the United Nations, the Somali methods of hijack and violent kidnapping can be easily emulated by others elsewhere,” SS Teo, president of the association told a piracy seminar in Singapore.

    Teo’s own company Pacific International Lines (PIL) had one of its containerships, Kota Wajar, highjacked by Somali pirates and held for 75 days before a ransom for its release could be negotiated.

    Teo described to conference delegates just how easily the pirates had extorted and escaped with millions of dollars, which he said was “unimaginable in the modern day and age”.

    On behalf of the Singapore Shipping Association Teo said the current level of response to the piracy situation is simply insufficient.

    “It is vitally important that all governments, at the very highest level, become more engaged in finding a long term solution to this crisis,” he said.

    Naval base planned for Walvis Bay

    Namibia’s Ministry of Defence says that once improvements to the port of Walvis Bay have been completed, the Ministry of Defence will build a new naval base in the harbour basin.

    According to the Namibian Economist, the plan is in line with the Defence Ministry’s Strategic Planning Initiative which was launched on 9 October 2009 by the Minister of Defence, Maj General (Rtd) Charles Namoloh.

    The report said that as with any organisation, the navy requires necessary resources to function properly and for the support of their activities. These include having a naval base at a suitable location where ships can dock. This facility would include an administration block, kitchen, accommodation and sporting facilities in addition to an operational centre.

    The Acting Chief of the Defence Force, Maj General Peter Nambundunga said that construction was already under way and the base would be completed within four to five years, as it was being built in phases on an annual basis. He said the naval base would be able to support the future growth in naval personnel and ships.

    Interesting salvage ruling involving parties acting in the course and scope of statutory duties

    by Gavin Brown, Associate: Bowman Gilfillan

    Cape Town maritime law firm Bowman Gilfillan recently successfully acted for the defendant in the reported matter of the vessel CLEOPATRA DREAM.

    The plaintiff, Transnet Limited, the state-controlled national port operator in South Africa, claimed salvage against the defendant, the mv Cleopatra Dream and cargo for coming to her aid in a time of distress.

    While within port limits and under the direction of a pilot employed by Transnet the vessel experienced a power failure. She was drifting towards shallow water and the pilot requested harbour tug assistance.

    The court found that, given Transnet’s statutory duties within port limits, including its duty to keep the port area safe for shipping traffic, it could not be said to have assisted the distressed vessel voluntarily. Furthermore, it was also material that the vessel was under mandatory pilotage by Transnet pilots who were under a statutory duty to use tugs and other means at their disposal to ensure that the vessel and the port area remained safe, both for the vessel and for other shipping traffic.

    That court confirmed the principle that only in cases where the assistance provided exceeds the bounds of any duty imposed by statute or the common law would the public authority be able to claim salvage.

    The reason for this is that only in those circumstances where the authority has exercised a discretion to act beyond the scope of its duty can its actions be said to meet the requirement of voluntariness. This is in keeping both with the relevant national legislation and the Salvage Convention, incorporated into South African law by the Wreck and Salvage Act.

    Secretary-General calls for stronger partnership for African development

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    The global food and energy crises and climate change, and coupled with the financial and economic crises, have eroded economic and social gains made in Africa over the past decade, Secretary-General Ban Ki-moon warns in a new report, calling for a stronger partnership for Africa’s development.

    In his report entitled Social Dimensions of the New Partnership for Africa’s Development (NEPAD) [downloadable HERE], the Secretary-General wrote that the adverse social consequences of these crises are likely to remain for much longer in Africa, even after the recovery gathers pace in advanced countries.

    “African economies will likely experience decelerated growth, high unemployment and poverty rates and diminished prospects for achieving NEPAD goals and other internationally agreed development goals, including the Millennium Development Goals,” the Secretary-General wrote.

    To mitigate these effects, the Secretary-General recommended that African countries bear the majority of responsibility for their own development by continuing to integrate and mainstream NEPAD priorities – such as infrastructure, agriculture and food security, science and technology, trade, and environment – into their national development plans. Governments concerned should also take advantage of North-South and South-South experiences and best practices.

    The report also called on Africa’s development partners to continue to integrate NEPAD priorities, values and principles into their development assistance programmes. In particular, the international community should assist African countries in addressing the challenge of climate change by raising the resources needed to support adaptation and mitigation actions.

    “For Africa to leapfrog dirty energy solutions, strengthen its adaptive capacity and pursue sustainable low-carbon growth strategies, it will need financial assistance and technology transfers. The region will need not only additional funding but also timely and predictable delivery on existing ODA commitments,” the Secretary-General wrote.

    The report noted that although African countries contribute the least to climate change and sea-level rise. Extreme weather phenomena results in a “growing numbers of climate refugees, social disintegration as a result of social and political instability and conflicts over land-based resources, and new health threats that emerge as a result of the changing frequency and intensity of extreme weather events such as floods and droughts.”

    Adopted by African leaders in 2001, NEPAD lays out an agreed vision of social and economic development on the continent.

    The NEPAD report is on the agenda of the 48th session of the Commission for Social Development, which began last week in New York and continues until Friday (12 February).

    News clips – Keeping it brief

    Costa Deliziosa delivered

    Carnival Cruise subsidiary Costa Cruises has taken delivery of its latest cruise ship, the 92,700-gt COSTA DELIZIOSA. The ship, which has 12 decks and accommodation for 2,829 passengers, was built at the Italian Fincantieri Naval SPA shipyard at a cost of €450 million. With a length of 292 metres and a beam of 32.3m she is a sister vessel of COSTA LUMINOSA.


    KZN trade mission to Kenya

    Trade & Investment KZN (TIKZN) is coordinating a trade mission to Kenya which is scheduled for 14 – 21 March 2010. The mission will spend 14 – 17 March in Nairobi and the balance of the time in Mombasa. KZN companies wishing to participate should contact either TIKZN or the Durban Chamber of Commerce & Industry – enquiries to Christina Pillay on 031 335 1040 or email christinap@durbanchamber.co.za


    Joint German and South African Navy exercises start 15 February

    Joint exercises involving the South African and German navies are due to commence on 15 March and will run for a full month, ending 15 March. Four ships of the German Navy have arrived in Simon’s Town or are due shortly, two frigates, a combat support vessel and a supply ship, and will be joined at sea for the exercises by two South African frigates, a submarine, mine protection vessels and several patrol boats. Aircraft of the South African Air Force and German Luftwaffe will also take part including a number of German Tornado fighter bombers.

    Today’s recommended Read – Wider Panama Canal could change shipping

    There’s little question that world shipping, particularly involving shipping between the Far East and North and South America, is set for a dramatic change once the USD5.25 billion widening and deepening of the Panama Canal is complete.

    The deeper, wider canal will allow AP Moeller-Maersk, China Ocean Shipping, MSC and other lines to ship more cargo directly to New York and Boston instead of unloading it on the US West Coast for trains and trucks to finish the journey east. That could save exporters 30 percent, the canal operator said. As a result Chinese toys and sneakers headed to Walmart and Target on the US East Coast may bypass Warren Buffett's USD33.8 billion railway as the expansion of the Panama Canal slashes the cost of shipping them by sea.

    Read more on this topic HERE.

    If you have any suggestions for a good read please send the link to info@ports.co.za and put GOOD READ in the subject line.

    Pics of the day – OMEGA BAY and PURPLE BEACH

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    In the picture above, the reefer ship OMEGA BAY (3,712-gt, built 1984), owned by the Laskaridis Shipping Company of Athens, is under tow by a couple of harbour tugs and being moved from the Bayhead repair yards to a new berth at the Durban fruit terminal.

    No sooner had the Omega cleared the Esplanade and Maydon Channels than another vessel, the MACS Maritime Carrier Shipping general cargo and container ship PURPLE BEACH (23,401-gt, built 1998), having discharged containers and breakbulk at the City Terminal, moved in the opposite direction down the two channels to begin loading cargo at Maydon Wharf. Both pictures by Terry Hutson

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