MIREILLE WENGER: An efficient Port of Cape Town can help SA weather fiscal storm

Every month the Port of Cape Town, run nationally through Transnet, is slipping further down global port efficiency rankings. It consistently languishes at the bottom of indices measuring efficiency and competitiveness, and at the top of those measuring the most congested ports globally.

Last week, the port was at 10 out of 158 on the Linerlytica port congestion watch of the most congested ports in the world (position one is the worst). All indications and all my engagements with industry reflect a disastrous situation of a barely functional port.

Ahead of the upcoming peak season, amid a management crisis at Transnet and against the backdrop of a national fiscal crisis, Transnet should move with critical urgency to avert impending disaster at the Cape Town port by urgently planning and preparing to ensure that the port is able to keep up with the growth in exports. This includes urgent infrastructure improvements and additions, and providing regular and timely communication with the industry to empower exporters to make informed decisions.

The involvement of the private sector in the running of the port is also vital, as is taking place with the development and upgrade of Pier 2 of the Durban Container Terminal. Private sector investment is what we need at the Port of Cape Town — to ensure that it functions optimally to support the growth of exports to boost economic growth and job creation. 

The Western Cape government is deeply concerned by the socioeconomic effect the poorly functioning Port of Cape Town is having on current and future economic growth, exports and job creation. These are priorities of our Growth for Jobs strategy to enable a R1-trillion, jobs-rich, inclusive, resilient, thriving and diverse provincial economy that is growing at 4%-6% in real terms by 2035. 

Research has shown that an efficient Port of Cape Town, with sufficient capacity and investment in infrastructure, has the potential to contribute at least an additional R6bn in exports, about 20,000 direct and indirect jobs, over R1.6bn in additional taxes by 2026, and a contribution to the Western Cape GDP of 0.7 of a percentage point by 2026. 

The Western Cape’s agriculture sector accounts for more than half of SA’s agricultural exports, and is the primary driver of provincial export growth, recording a remarkable 219% growth in the 10 years between 2012 and 2022. Expanding our agriculture sector would absorb more low-skilled labour and — as a result — alleviate poverty and address inequality.

However, no farmer or investor would be willing to plant additional crops without certainty that they will be able to get their product to market. It is therefore absolutely essential for national economic growth that the Cape Town port is capacitated to support the country’s exports. 

Historically the Port of Cape Town has suffered a severe lack of investment in critical infrastructure as well as equipment. As the Western Cape government we have and will continue to invest time and resources in understanding the constraints and potential solutions to the inefficiencies at the port.

Our next step is to finalise a port needs & priorities report, detailing insights into what specific investment is needed now to ensure the port returns to being an economic enabler over the medium to long term, and not a hindrance.

This report will be published within the year and will be shared with Transnet and all stakeholders in the port value chain. We are confident that this will provide substantive, evidence-led clarity on the actions needed at the port. 

In the immediate term we know we are approaching a peak export season, especially in agricultural produce destined for international markets. Industry body Hortgro reports that SA ranks as the eighth biggest global deciduous fruit exporter out of 88 countries, earning the country valuable forex in a sector that employs many thousands of people. The Western Cape agri-sector is expecting a record season in a variety of produce as a result of the good rains this year.

We have on numerous occasions approached Transnet regarding the problem of the dysfunctional Cape Town port with a determined intention to co-create mutual solutions to unlock growth and productivity. Yet today all indications are that we are heading towards an export crisis at the port in the immediate future. I am advised that in the week from September 11 to 17: 

• Heavy swells continued to have a negative effect on port performance and the ability to dock and sail vessels safely. Only one of three berths is equipped with a shore tensioner.
• The Port of Cape Town moved to position 45 of 143 on the Linerlytica port congestion watch.
• Ship working hours remained at an alarming 22 hours on average for the week, up from 20 hours last week, against a target of 50 hours. Most other international ports do this with a single crane. The erosion has been progressive over the past three years, caused largely by breakdowns in rubber-tyred gantry cranes and ship-to-ship cranes. This is at the core of all terminal performance indicators. 
• Truck turnaround time was 41 minutes, compared with 60 minutes for the previous week and against a target of 40 minutes, mostly due to reduced truck traffic.
• Night shift utilisation was 7% against a target of 20%. Truck turnaround time on night shift is worsening, and equipment breakdowns are increasing. 

Put simply, when the Cape Town port works, the Western Cape and SA economy works, and the fiscus gets a desperately needed injection of funding. We will continue to engage as closely and productively as possible with our colleagues at Transnet towards the urgent priority of increased exports through a well-functioning and efficient port, including by bringing in external partners. We cannot afford to get this wrong. 

• Wenger is Western Cape MEC for finance & economic development.