Container terminal considered for Richards Bay

Transnet has embarked on a process to test the market for a container terminal at its Richards Bay harbour in KwaZulu-Natal – but business leaders say without a functioning railway connection the huge benefits such a project could unlock will not be realised.

The town currently has 400 to 500 trucks driving through its industrial area to the harbour every day. After off-loading they return by the same route, which results in a total of up to 1 000 trips.

This is because the rail service has all but collapsed due to cable theft and a bottleneck at the single-line Overvaal tunnel between Vryheid and Ogies.

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Transnet has issued a request for information that may lead to a formal procurement process at a later stage. It has invited proposals from the private sector for the design, development, construction, financing, operation, maintenance, and eventual transfer of the terminal to Transnet.

It proposes that one of the current multi-purpose wharfs be converted and dedicated to container handling.

The deadline for submissions is 28 November. Transnet has identified a specific site for the terminal, but also allows proposals for other sites.

Port of Richards Bay Master Plan at a glance

Source: Transnet National Ports Authority, KZN Logistic Hub – Port of Richards Bay Master Plan

Not a new idea

Jan Scheepers, CEO of Siyakhuphuka Investment Holdings, submitted an unsolicited proposal for such a terminal in 2008. He believes the terminal can be ready for operation within two years, once the procurement is concluded, which could take another year.

Siyakhuphuka launched a legal challenge after its proposal was rejected, only for Transnet to announce its own plans for such a terminal. The state-owned logistics group however failed to follow through with its plans.

Siyakhuphuka asked the court to review and set aside Transnet’s decision to reject its unsolicited proposal for the container terminal, but the case was dismissed in September on a technical point.

Scheepers is however excited about the fact that Transnet is once again looking at a dedicated container terminal in Richards Bay and says Siyakhuphuka will submit a proposal.

“The Transnet [National] Ports Authority has recently started operating much more independently, which has resulted in this initiative,” he says.

Economic revival

In its request for information Transnet says it has in the past received numerous requests from the private sector for such a container terminal, to serve the demand from KwaZulu-Natal and surrounding provinces.

Currently containers are being handled together with other freight at the multi-purpose terminal, but the capacity is limited. Vessels are increasingly bigger and deeper as shipping companies seek economies of scale, and harbour infrastructure must accommodate such changes.

The request for information is aimed at testing the market for the possible development of a dedicated container terminal.

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Mike Patterson, deputy chair of the Zululand Chamber of Commerce and Industry, says a dedicated container terminal will mean a lot for future development in Richards Bay and the surrounding area. “If it gets easier to import and export, investments in Zululand will increase,” he says.

He says the agricultural industry, especially fruit farmers, will benefit.

“In the past we had citrus production in the Nkwaleni Valley between Empangeni and Eshowe, and such a facility could result in its revival.”

Patterson says the rail service will however need urgent attention.

Rail service an issue

Henk Langenhoven, economist at Minerals Council SA, agrees. He says mines are battling to get their product exported through Durban and increasingly prefer Maputo in Mozambique.

“The rail service to Richards Bay cannot even deal with the pressure now. There is only a single railway line through the Overvaal tunnel, that is why there is a bottleneck. Cable theft is also a huge problem. Last week there was not a single train running as a result.”

Langenhoven says Transnet is always talking about new projects instead of fixing existing systems. “Harbours are made to receive goods via rail, not from trucks.”

Scheepers says it will take five to 10 years to enlarge the Overvaal tunnel and the tonnage does not currently justify it.

He doubts it will happen, in light of the uncertainty around the future of coal.

He does however see a different solution.

“The railway line from Johannesburg to Durban passes Dundee. From Dundee there is also a line that runs through Vryheid to Richards Bay that is currently being underutilised. This can be a feeder line to the dedicated container terminal at Richards Bay.”

According to Scheepers traditional mining companies exporting chrome, ferro-chrome and coal are battling to get slots at the multi-purpose terminal in Richards Bay, due to the increase of coal exports by junior miners.

“A dedicated container terminal will be a good solution for them.”

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