The following abridged article was authored by Suren Naidoo, published in MoneyWeb on 6 June 2019.
Ports and logistics parastatal Transnet is moving ahead with plans to develop a new ‘inland port’ [terminal] in Gauteng and on Wednesday announced the winning bidder that will develop and operate the R2.5 billion Tambo Springs Intermodal Terminal in Ekurhuleni.
Transnet’s says the deal represents a major public-private partnership (PPP) that will see Southern Palace Joint Venture Consortium holding a 20-year concession for the new inland terminal, which will complement the container facilities at City Deep.
A wholly black-owned and managed diversified industrial holding company, Southern Palace is the lead concessionaire in the consortium. Its partners in the project include Italian state rail and infrastructure company Ferrovie dello Stato Italiane as technical partner and supply chain and advisory group Makoya as logistics and marketing partner.
The new terminal in Springs will have an initial capacity to handle around 225 000 TEU [20-foot-equivalent unit] containers in its first phase and ultimately grow to handle some 550 000 TEUs. City Deep, located near the Johannesburg CBD, has a capacity of 400 000 TEUs and has already reached almost 80%.
The new Springs terminal will boost efficiencies as a fully-fledged modern intermodal facility, directly connected to the Natal Corridor (Natcor) rail link between Durban and Johannesburg.
The PPP project will improve the rail freight system in the country and boost economic growth. Transnet has experienced challenges on the general freight rail side, which has been in systemic decline over the years.
The decline of general freight rail has contributed to the growth in the number of trucks on national roads, especially the N3 between Durban and Johannesburg. There is therefore some urgency to get general freight working again on rail. With time-sensitive cargo, rail can play a critical role as part of the intermodal mix.
The Springs terminal is expected to break ground by November and is anticipated to open in 2022.
It will be located on a 67-hectare (ha) site within the broader Tambo Springs Logistics Gateway development, which is being master-planned by the Tambo Springs Development Company on 607ha of land near the N3. Transnet has already purchased 35ha of land within the new development node, with another 32ha being negotiated.
The City of Ekurhuleni will provide major bulk services for the development. The terminal will be developed as part of a next-generation logistics gateway combining direct terminal handling facilities as well as back-of-terminal property development and related value-add logistics services and activities.
The existing Natcor dual directional freight rail line runs directly to the site of the [new terminal]. Transnet will therefore not incur significant additional costs for new rail infrastructure to connect to the new terminal, but rather, leverage off the existing infrastructure.
Once the terminal is developed, it is expected to spur surrounding industrial and commercial property development to the tune of around R20 billion from the private sector.
Southern Palace, told Moneyweb that Southern Palace has brought in international rail and container terminal specialist Italferr, which is part of the Ferrovie dello Stato Italiane group. The joint-venture consortium is also supported by Concor and engineering firm AECOM.
Southern Palace has raised around R7 billion to date through its various businesses, so the terminal will be largely “self-funded”.
See the unabridged article here!
Thanks Mike a very interesting and I guess that means City Deep is here to stay?
CEO CWT Aquarius Shipping
As you may know, this announcement may be a bit premature, given the legal challenges still facing Tambo Springs
Thank you Mike, I guess it’s still positive news given the economic situation. I nevertheless agree that we live in a country of paradox and will just have to wait and see the eventual outcome.
Thanks Mr Mikey, very interesting reading!