DAVID MAYNIER: Why it’s time to privatise the Port of Cape Town

When there is a disruption or delay at the Port of Cape Town, the knock-on effects can be disastrous, especially for the agricultural sector, and especially during peak season.

We know that removing obstacles to exports is a critical lever in our strategy to grow the economy and create jobs in the Western Cape. We know that to become the most competitive region in Africa we need the most competitive port in Africa.

While the Western Cape government does not have a formal mandate or jurisdiction over the Port of Cape Town, we could not sit back and do nothing given the importance of the port and the huge potential it has to either compromise or grow our regional economy. That is why we created a port task team, including key stakeholders and decision-makers across the port logistics chain, to address the numerous challenges at the port.

At the beginning of February we held our third Port of Cape Town stakeholder engagement, which brought together key representatives of the port logistics chain. We had the opportunity to reflect on some of the successes achieved by the Port of Cape Town task team, but also to have an open, frank, and honest discussion about the challenges at the Port of Cape Town.

According to the recent World Bank global container port performance report, the Port of Cape Town is ranked 347 out of 351 ports globally. While this places our port highest in SA, with Gqeberha at 348, Durban at 349 and Ngqura at 351, this is nothing to be proud of.

To further compound the challenges with ports in SA, the total cost to users is 146% higher than the global sample average. If we then look at the performance of the Port of Cape Town compared to benchmarked targets, over the past month:

• The average waiting time at anchor was 5.9 days versus the target of one day;
• The average total turnaround time (for vessels) was 12.25 days, versus the target of four days;
• The average number of containers moved per week was 16,284, versus the target of 18,000 during peak times;
• The truck turnaround time was 42.2 minutes, versus the target of 35 minutes; and
• The average crane moves per hour for 2021 was constantly about 24 per hour. 

It is clear that the Port of Cape Town continues to face multiple challenges, which compromise the efficient running of the port and cause significant lost opportunities for the economy of the Western Cape.

While I agree with the sentiment expressed by President Cyril Ramaphosa in his state of the nation address, when he said inefficient ports can compromise economic growth and compromise businesses, I question why he made absolutely no mention of private partners for the Port of Cape Town.

While Transnet will work with private partners in the ports of Durban and Ngqura, any talk of private sector investment in port operations in the Port of Cape Town seems to have evaporated and, we believe, is unlikely to materialise within the next two years.

Key to unlocking the potential of the Port of Cape Town is making sure critical infrastructure is maintained and that there is investment in new infrastructure. However, a big part of the issue at ports across SA is significant capital under-expenditure, which translates into a shortage of equipment and poor maintenance of equipment, which in turn has severe consequences for a port’s ability to manage inevitable breakdowns.

If we look at Transnet Port Terminals’ annual report over the past three years, capital under expenditure amounted to R2.3bn, or almost 30% of its capital budget. The situation is even worse when it comes to the Transnet National Port Authority, with capital under-expenditure amounting to R4.2bn over the last three years, or 57% of its capital budget over this period.  

Since the establishment of the Port of Cape Town task team there have been some notable successes, including more infrastructure investment and an important national policy shift with a commitment to exploring partnerships with the private sector. This would bring new investment, technology and expertise to port operations and could be a huge step forward.

Some other notable successes include:

• The acquisition of some essential terminal equipment;
• The development of a decision-making tool for efficient container deliveries into the terminal on the basis of data integration; and
• The root cause analysis of several congestion choke points in different parts of the port logistics chain.

It is critical that we remove obstacles to exports so we can grow the economy and create jobs in the Western Cape. But the systemic challenges, specifically when it comes to capital under-expenditure, remain.

While many in the port logistics supply chain have shown commitment to working together to find solutions to these challenges, our efforts and ability to increase exports, to grow the economy, to create jobs, and to give hope, will fail unless we urgently deal with the challenges at the Port of Cape Town.

That is why it is now time to look at privatising the Port of Cape Town. At the end of the day, when the port works our economy works in the Western Cape.

• Maynier is finance & economic opportunities MEC in the Western Cape.