Unpacking the proposed Durban dig-out port

Marc Descoins, Programme Director - Durban Dig-out Port, Transnet Limited: Group Planning and Monitoring

The need for the proposed Durban Dig-Out Port is driven by two dynamics: the expected growth in demand for cargo capacity and the changing needs of the shipping industry.

In spite of the global economy\'s downturn in 2008, the long-term forecast demand for cargo is set to increase dramatically. In South Africa, Durban is expected to continue to handle the bulk of this volume.

Also, the global shipping industry has seen the advent of a new generation of shipping vessels that are longer, wider and deeper. In terms of container ships the latest under construction will carry 18 000 TEU\'s and drafts will be about 15m to 15,5m, compared to the current draft of up to 12,5m. These ships require a deep water port and other facilities which the proposed port will offer. The Port of Durban can accommodate ships with a draft of up to 12,5m. The proposed port will be specifically designed to handle these new generation ships.

Transnet uses a 30 year demand forecast on all commodities, to inform its Long Term Planning Framework (LTPF). The demand forecast found that cargo volumes, including containers, are expected to increase threefold or fourfold over the next 30 years. Container volumes are expected to grow from 2.69 million Twenty-foot equivalent unit (TEU) per year in 2010 to between 9 and12 million TEUs per year by 2040, in Durban alone.

The Port of Durban has historically handled 70% of South Africa\'s containers and is anticipated to retain its position as South Africa\'s premier container port. As a measure to address the increasing demand, the Port of Durban is consolidating and reconfiguring existing terminals to accommodate growing cargo volumes.

If cargo volumes continue to grow at current levels, the existing Port of Durban will run out of capacity by 2019 in spite of the expansion plans. Durban\'s resources in seaward land are extremely limited and the inability to handle growing cargo volumes will invariably have a knock-on effect on the region\'s competitiveness and on the national economy. The proposed Dig-Out Port is thus an answer to a wider, holistic plan of investment and infrastructural development.

When completed, and according to the current concept planning that Transnet has done, the proposed port is envisaged to consist of:

• a 16-berth container terminal to handle an additional 9,6 million TEUs
• an automotive terminal
• a liquid bulk handling facility
• the construction of road, rail and other basic port infrastructure

Over what period will the proposed DDOP be developed?

The proposed port is envisaged to be developed over a period of between 20 and 30 years. The time required to develop the first phase from concept design to commissioning is estimated to take eight years. Therefore the earliest the proposed port can provide additional capacity is in 2020.

Transnet is currently in the concept design phase of the proposed port project. This initial phase constitutes the generation of a number of technical design options that take into consideration important criteria including, but not limited to, environmental, social and economic sustainability. The process of moving from the current concept phase, through the pre-feasibility and feasibility phases is anticipated to take approximately four years, and will follow due legislative and regulatory process. Construction of phase 1 of the port is anticipated to being in early 2016 and run through to the end of 2019.

However, , Transnet will constantly re-evaluate its freight demand forecasts during the planning phases of the proposed port project and a phased port development strategy will be adopted that will enable Transnet to provide capacity that will be aligned to the demand curve. If demand increases, Transnet will be able to respond by bringing some of the proposed phases forward; the converse applies should demand decrease.

How will it influence/complement the existing Port of Durban?

The existing Port of Durban is the leading port in the Southern African Development Community (SADC) region and the premiere trade gateway between South-South trade, Far East trade, Europe and USA and East-West Africa regional trade. It occupies a focal point in the Southern Africa transport and logistics chain with 60% of all imports and exports passing through the Port of Durban. Thus the port assumes a leading role in facilitating economic growth in South Africa.

At an estimated 6% to 8% annual growth rate in containers coming through the Port of Durban, the existing infrastructure is expected to reach its limit in 2019, six years from now, and a lack of container capacity will hamper economic growth. Demand for container capacity in Durban is expected to exceed 9 million TEU by approximately 2040, and there is already pressure on the existing Port of Durban, which handles two thirds of South Africa\'s container traffic. Even with the expansion plans for the current port to increase capacity this will not be adequate to service the demand forecast.

Surrounded by the urban sprawl of the eThekwini Metro, the port\'s limited space for future growth on both the waterside and landside, made authorities opt for the site of the old Durban International Airport (DIA) for a dig-out port. The old DIA site is the only precinct in the province that can accommodate a port of this nature. This would enable an entirely new port to be built, free up space in the old port, relieve landside congestion, and provide sufficient time to address issues of habitat and land-use rationalisation, further assuring the sustainability of the Port of Durban as the premier gateway to Southern Africa.

How will the increased throughput assist in the future economic development of Africa, specifically via the trading and transport corridors?

South Africa has the largest number of intra-regional maritime connections with international carriers providing direct access to 29 other African countries (United Nations Conference on Trade and Development 2009). The demand at South African ports surpasses all countries in Eastern and Southern Africa. With a network of eight ports, the country has a critical role to play in the international trade landscape for the region.

South Africa handled the highest container volumes reaching a peak of 3.9 million TEU\'s in 2008 with the Port of Durban accounting for over 60% of the traffic. The critical location of Durban on the North South Freight Corridor, an important route for transit traffic bound for Zambia, Zimbabwe, Malawi and a connection going as far north as Dar-es-Salaam, puts it in the spotlight and its performance therefore is extremely vital for countries along the corridor.

Durban also enjoys unparalleled dominance in sub-Saharan Africa from a size and performance perspective. Transnet National Ports Authority\'s (TNPA) aspiration to position Durban as a globally competitive shipping hub and a gateway into Africa means that the existing Port of Durban and the proposed new Dig-Out Port have to meet the standards of other international ports such as the ports of Singapore, Rotterdam and others.

According to the United Nations Liner Shipping Connectivity Index and the Georgia Institute of Technology, Durban and Mauritius outshine other ports in the SADC region by a significant margin, with ports such as Maputo posing potential competition.

The existing Port of Durban is well located in relation to the economic activity in the SADC region and has infrastructure linkages with much of South Africa\'s adjacent countries to the north and, in accordance with global trends, is a major link in efficient international supply chains of containerised cargo serving South Africa.

Durban rates as the port with the greatest connectivity in the SADC region and is also on par with ports such as Mumbai (India), Santos and Rio de Janeiro (Brazil). XX