Archives For Durban Harbour

Artistic impression - Durban Dig-out Port

Artistic impression – Durban Dig-out Port

An international ports expert has expressed serious reservations about Durban’s proposed dig-out port. He said plans for a dig-out port should be put on hold, with efforts rather directed at maximising the existing facilities and potential at Durban Harbour.

International adviser and expert on port development Jamie Simpson, of Canada, has warned Transnet and the eThekwini Municipality against pursuing the dig-out port, saying the current port has to “keep going”. Simpson was a guest speaker at a ports and cities dialogue with Durban businesses, hosted by the municipality’s Edge (Economic Development and Growth eThekwini) at the Moses Mabhida Stadium yesterday. His point of view was supported by two other speakers.

However, Transnet group strategy general manager Irvindra Naidoo was adamant that the parastatal was forging ahead with the project, saying Durban was “running out of capacity” and had to expand.

Naidoo said: “The question was: ‘Okay, do we now go off somewhere else and develop a new maritime cluster around Richards Bay or somewhere else, or do we try to embed or strengthen the cluster… (by extending) the Durban port?’ That’s what this dig-out port really is about. It’s an extension of an existing cluster.”

The port, the continent’s busiest, caters for 2.6 million TEU (twenty-foot equivalent units) a year. These result in about 8 000 daily container-related heavy vehicle movements around the Bayhead area. Transnet has repeatedly said that the port will battle to provide the capacity for future demand.

Naidoo said with a dig-out port at the old Durban International Airport site, the containers could reach 8.2 million TEU by 2040, resulting in about 17 500 heavy vehicle movements daily in the South Durban Basin.

Simpson told the panel that the move “might not be a very good solution”. He said: “In view of the likely availability of financing – a lot of uncertainty – I think the port has to keep going and develop a capital investment plan and operational improvement plans to meet demand in the next five to 10 years.”

From there, he said, the parastatal could “weigh up” whether a bigger port “makes sense in view of market conditions… and availability of finance at the time”.

The first phase of construction of the dig-out port was expected to start between 2021 and 2025. A pre-feasibility study started in 2013. To read the full article click here! Source: iol.co.za

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Old Durban airport - site for new Dig Out Port (Picture credit: ACSA)

Old Durban airport – site for new Dig Out Port (Picture credit: ACSA)

The first phase of Durban’s dig-out port, which was expected to generate hundreds of jobs and turn the city into the shipping hub of Africa, would not be ready by 2020 as planned, and the current harbour might have to be expanded to provide a short-term solution. This emerged at a KZN Freight Task Group meeting recently where Transnet dig-out port programme director Marc Descoins admitted that a new completion date was being investigated.

‘The actual start date of the new port is uncertain as we are still in the early design phase,’ Descoins said last night. Technical issues, such as the requirements for the construction of a new single buoy mooring to replace the existing one, were affecting timelines. Other factors affecting the development were being re-examined, but Descoins did not give further reasons for the delay.

Transnet was still tracking demand forecasts to ensure that capacity creation was aligned to demand, he said. Nevertheless it had other plans for port expansion to ensure capacity met this demand. If an alternative could be found to expand the capacity of the port, the dig-out port project at the old airport site could be set back by a few years, he said.

However, a previously discussed option – the expansion of the current port into the Bayhead area – was ruled out by Descoins, as complex problems involved in developing the area as an additional container terminal would take at least 15 years to resolve. Engineering and technical businesses in Bayhead did not appear shocked at the news yesterday, saying they knew expansion in the area would not happen.

One of the most seriously considered – and quickest – options would be for the container terminal on Pier 1 to be expanded in the direction of Salisbury Island. This would also provide Durban with increased container capacity. A decision on this could be made soon, but if this option was decided on, the dig-out port might be even further delayed as Transnet would not develop both projects and create unnecessary capacity in the short term.

However, the dig-out port project would not be cancelled, and preparations at the old airport site would continue, Descoins said. Transnet had warned that without the dig-out port Durban would not be able to meet medium- and long-term shipping capacity demand. The project would increase the volume of container trade at the Port of Durban from the current 2.69 million twenty-foot equivalent units (TEUs) to between 9 million and 12 million TEUs over 30 years.

Durban was also the first choice for a port upgrade because of its good infrastructure, although the road and rail systems need to be considerably upgraded. Completion of the feasibility study was scheduled for the end of 2015 followed by a four-year construction phase. The first ships were expected to come into the port in 2020. For this to have been achieved groundwork would have had to begin by the end of 2016. Transnet bought the old airport land in 2012 for R1.85 billion. Building the port was expected to cost R75bn to R100bn over the next 30 years.

Desmond D’Sa, chairman of the South Durban Community Environmental Alliance, was pleased with the delay, but said the project should be abandoned.

‘Why do we even need another port? It is only going to become another white elephant like the Coega Industrial Development Zone in the Eastern Cape.

‘This is all about people with big pockets, and the extra time will only allow corruption.’

Durban Chamber of Commerce and Industry chief executive Andrew Layman said imports and exports from the harbour were not accelerating as much as expected.

‘This is reflected in the international trading market. South Africa is not the flavour of the month.’

There had always been plans for expansion of the current harbour, he said.

‘This is because ships are bigger these days – it needs to be deepened and widened. So I don’t think it is a case of one or the other.

‘The need for the dig-out port is not as imminent as originally thought, and money is probably not as readily available either.’

Layman said it was not ‘a train smash’ as jobs had not been created yet, but it was unfortunate that job creation would be delayed.

‘It is understandable that it would be further delayed in the current climate.

‘It would be pre-emptive to start construction as the system still needs a lot of work, such as our tariffs, which are higher than most ports around the world, and our service delivery.’ Source: The Mercury

Related articles

During December 2013, I received a fabulous book from a business acquaintance. Titled ‘Durban Harbour’, this special souvenir issue tells the fascinating history of Durban Harbour from 1835 to the present day. It reveals the extraordinary engineering skills and resilience that shaped Durban harbour into the largest and busiest harbour on the African continent and a major player in Global trade.

Recently another milestone was achieved for Durban harbour with the arrival in Durban of the largest container ship to dock in South African waters the MSC Sola – a giant of 131,771 tons and capable of carrying 11,660 containers, with a length of three and a half rugby fields. The ship’s visit to Durban was as a result of the widening and deepening of the port in 2010. See post – Durban awaiting arrival of 11, 660 TEU container ship.

But the story of Durban as a viable deepwater port is weaved in rich history and as Durban harbour approaches its second century – it is also time to toast the entrepreneurs for their innovation and the workers, harbour pilots, tug and train crews who played such a vital part in the day to day operations of the harbour.

For more information regarding the publication, and details of purchasing it visit the author, Stuart Freedman’s website – History of Durban Harbour.

Related articles
Transnet moves ahead with Maydon Wharf upgrade plan. (Picture credit:  Duane Daws, Creamer Media)

Transnet moves ahead with Maydon Wharf upgrade plan. (Picture credit: Duane Daws, Creamer Media)

Port Technology reports that the IMO’s stricter sulphur emission standards are likely to have a profound impact on the maritime industry. With this in mind, PTI’s sixtieth edition pays a particular focus to the challenges ahead if LNG is to become the shipping fuel of the future and if this is the most viable option for shipping lines vying to meet these new regulations. Elsewhere, we have contributions form Drewry, Liftech consultants and a host of key industry experts, engineers and analysts.

The Port of Durban is situated on the east coast of South Africa, in the KwaZulu- Natal Province. The port is the busiest on the African continent, and the biggest in terms of container capacity with 44 percent of South Africa’s break-bulk cargo and 61 percent of all containerised cargo flowing through it. In 2010 alone, the port handled 2.5 million TEU.

The port has 57 berths and is protected by the north and south breakwaters, which are 335 metres and 700 metres long respectively. It was developed primarily for import cargo but over the years, cargo flows have changed significantly and exports have become more important. Over 4,000 commercial vessels now call at the port each year.

The Maydon Wharf terminal

The Maydon Wharf multi-purpose terminal (MPT) handles a variety of containerised, break-bulk and bulk cargo, and specialises in the handling of specific commodities. The terminal also handles both import and export containers, taking it to an average of 15,000 TEU. It has an annual throughput of more than one million tonnes of break-bulk and neobulk commodities. The Maydon Wharf area consists of 15 berths and the MPT operates principally between berths eight and 13.

Transnet National Ports Authority (TNPA) has initiated an extensive upgrade of the infrastructure at the port. One of the major projects is to rebuild and deepen seven of the 15 berths in the Maydon Wharf area. The new quays will be able to accommodate larger vessels and provide suitable load-carrying capacity for the handling of cargos over the berths. Source: Port Technology

Thaba Mufamadi, chairman of Parliament’s finance committee. Picture - Financial Mail

Thaba Mufamadi, chairman of Parliament’s finance committee. Picture – Financial Mail

Parliment’s standing committee on finance (SCoF) has decided to postpone its deliberations on two draft customs-related bills until next year to allow importers and the freight-forwarding industry more time to comment on the proposals which threaten the status of City Deep as an inland port. This followed an appeal by the South African Association of Freight Forwarders that it had had insufficient time to consider the substantially revised draft Customs Control Bill and Customs Duty Bill, which required that imported goods would have to be cleared at the first point of entry.

The association, supported by a range of other business organisations, including the Johannesburg Chamber of Commerce and Industry, warned that the bills could be challenged on constitutional grounds if the process of consultation was deficient. All political parties supported the proposal by finance committee chairman Thaba Mufamadi on Wednesday that the deliberations on the bills be postponed until next year. He instructed stakeholders to make their submissions to the South African Revenue Service (SARS) by December 15.

Mr Mufamadi also took cognisance of concerns raised by Business Unity South Africa that parliamentary processes did not allow sufficient time to comment, for example, on the medium-term budget policy statement. Industry has warned of port delays and trade disruption if the proposals were to be adopted. The Customs Control Bill proposes that goods be cleared at the first port of entry into South Africa. This will mean that inland ports such as City Deep in Johannesburg would no longer be designated places of entry or exit for customs purposes. In the past, containerised cargo could move directly to inland ports on arrival in the country under cover of a manifest. A new declaration — of the nature, value, origin and duty payable on the goods — would replace the manifests.

SARS said these did not provide sufficient information to undertake a risk assessment. Another bone of contention for industry was the “extremely severe” penalties proposed in the draft Customs Duty Bill. Following the uproar about the proposals SARS offered a compromise earlier this week as a way out of the impasse. Instead of a clearance at the port of entry, a mandatory advance customs clearance of the goods three days before their arrival at the first port of entry would be required. Goods consigned to inland terminals such as City Deep would be released conditionally. The system would be tested for the whole of next year to iron out any problems.

An alternative option would be for the goods to undergo a lesser form of clearance at the first point of entry. This would still entail providing customs authorities with the same level of information on the tariff, value and origin of goods, which would be submitted by electronic data interchange. The importer would be held accountable for the information that was provided. SARS official Kosie Louw said that because this document would not have the formal status of a clearance certificate, it would not disrupt existing legal contractual arrangements, as claimed. The goods would still move CIF (cost insurance and freight) from the port to City Deep. SARS has also proposed softening the penalty provisions so that errors not resulting in any prejudice to customs revenue will be subject to penalties only after three warnings. These penalties will be discretionary and applied leniently in the first 12 months of the bill coming into force to allow business time to properly prepare for the change. An appeal process has been included. Source: Business Day Live. 

Proposed Durban-Free State-Gauteng Logistics and Industrial Corridor Plan (SIP2)

Proposed Durban-Free State-Gauteng Logistics and Industrial Corridor Plan (SIP2)

Notwithstanding on-going discontent amongst industry operators in regard to proposed legislative measures mandating customs clearance at first port of entry, the South African government (GCIS) reports that work has already commenced on a massive logistics corridor stretching between Durban and the central provinces of the Free State and Gauteng. Most of the projects that form part of the second Strategic Infrastructure Project (SIP 2), also known as the Durban-Free State-Johannesburg Logistics and Industrial Corridor, are still in the concept or pre-feasibility stage, but construction has already started on several projects.

These include:

  • the building of a R2,3 billion container terminal at City Deep
  • a R3,9 billion project to upgrade Pier 2 at the Port of Durban
  • R14,9 billion procurement of rolling stock for the rail line which will service the corridor.

Work has also started on the R250 million Harrismith logistics hub development to set up a fuel distribution depot, as well as on phase one of the new multi-product pipeline which will run between Johannesburg and Durban and transport petrol, diesel, jet fuel and gas.

The aim of these projects and others which form part of SIP 2, is to strengthen the logistics and transport corridor between South Africa’s main industrial hubs and to improve access to Durban’s export and import facilities. It is estimated that 135 000 jobs will be created in the construction of projects in the corridor. Once the projects are completed a further 85 000 jobs are expected to be created by those businesses that use the new facilities. Source: SA Government Information Service

Interested in more details regarding South Africa’s infrastructure development plan? Click here!

Old Durban airport - site for new Dig Out Port (Picture credit: ACSA)

Old Durban airport – site for new Dig Out Port (Picture credit: ACSA)

Transnet has concluded the first in a series of early stakeholder engagement sessions with local organisations on the proposed Durban dig-out port project. If built, the new port will be to the south of Durban on the site of the former Durban International Airport and 15 minutes by car from the existing port. It has been proposed that it will consist of 16 container berths, three Ro-Ro berths for the automotive business, and several oil and product tanker berths.

The engagement sessions just concluded form an integral part of the project’s concept phase which includes the development of a Sustainable Port Development Framework (SPDF) that will inform all future designs as well as operations. Transnet commenced with high-level technical and environmental studies in 2012 as part of the proposed Durban dig-out port project process. The current concept phase is scheduled to conclude in July this year, and comprises the generation of a number of technical design options.

The engagement sessions involved key representatives from local business, property, environmental and civic associations who met in order to comment on a discussion document which was distributed to them in mid-February 2013. The discussion document included important information on the background to, and process involved in, validating the viability of constructing a major container port on the site of the old Durban International Airport.

The sessions were held at various public venues and were facilitated by an independent sustainability consultancy. All feedback obtained during the engagement sessions was captured and will be factored into the development of the SPDF which will ensure the effective implementation of sustainability objectives throughout the life cycle of the proposed port project.

Along with promoting the long-term sustainability and operational excellence of the port, the framework also seeks to integrate environmental and social principles into the planning process. The series of engagement sessions, which will continue throughout the project’s lifespan, will also form part of the Department of Transport’s requirement for engagement during the strategic level environmental assessment as part of the legislative requirement for the promulgation of the port.

The process of moving from the current concept phase through the pre-feasibility and feasibility phases, and finally to actual implementation is anticipated to take approximately four years. The next phase, which is the pre-feasibility phase, is expected to proceed in July this year when the viability of the preferred design option will be thoroughly investigated.

The proposed port forms a key pillar of Government’s Strategic Integrated Projects (SIPs) to upgrade the Durban-Free State-Gauteng Freight Corridor (otherwise known as SIP2 in the National Infrastructure Plan). Source: Ports.co.za

MSC Fabiola - sets new record for Durban container vessel capacity

MSC Fabiola – sets new record for Durban container vessel handling capacity

 

The visit to Durban, a fortnight ago, of the MSC FABIOLA has again raised the limit in terms of container ship sizes to call at the port. The previous largest box ship to call at Durban was the 11,660-TEU MSC Luciana, whereas MSC Fabiola can carry up to 12,562-TEU.

Obviously the ship was not fully laden otherwise the port would not have been able to accommodate the ship. The deepest berths at the Durban Container Terminal are 12.8m and those at Pier 1 are about the same.

MSC Fabiola is a charter vessel and is currently deployed on MSC’s pendulum service between Northern Europe and Singapore via Durban, Cape Town and Ngqura. The rotation is Northern Europe ports, Cape Town, Ngqura, Durban, Singapore, Durban, Ngqura, Northern Europe.

The next objective to aim at is to have the 14,000-TEU box ships deployed on the South African service, defying all previous projections, as indeed has been the case with the 12,500-TEU MSC Fabiola.

Of course, the main obstacle in having these post panamax ships calling at Durban is that the country’s main container port lacks a deepwater berth. This is despite the entrance channel having been dredged and widened several years ago to -19m decreasing to – 16.5m in the harbour inside entrance. In the process South Africa has once again been exposed by rapidly moving circumstances and questions need to be asked as to why the process of providing Durban with deep water berths is being delayed. Source: SAPorts.co.za

2012 World's Container Ports With Most Potential (Mercator)

2012 World’s Container Ports With Most Potential (Mercator)

According to the Shanghai International Shipping Institute’s (SISI) ‘Global Port Development Report 2012’, rapid growth in throughput has been pushing Chinese ports up the global ranking in terms of development potential.

The report also revealed that throughput in China’s ports was stable, with a growth rate of around 3% to 10%, affected by the worsening economic environment, growth in international shipping and a decrease in trade volume.

But, with global economic, trade and shipping centres moving eastward, some small and medium sized ports have recorded double digit growth (over 20% in some cases). As a result, Chinese ports, including Hong Kong, have taken up five positions among SISI’s Top 10 2012 World’s Most Potential Container Ports, nine positions among the Top 20 global container ports and 13 positions among the Top 20 global ports in terms of cargo throughput.

The report says that European ports are likely to see a return in stability, with a limited growth of less than 3%, while American and African ports may see some growth in throughput following the slow recovery of international trade volume and stronger cargo handling capacity.

Durban_Harbour_Photo Hi-ResA tad of nostalgia? No, this is relevant and historic. Look what Africa’s busiest seaport looked like 60 (or more) years ago. I am very grateful to Lois Crawley and Cecil Gaze (fellow customs colleagues in Durban) for sharing these historic gems. For purposes of contrast see the modern-day harbour (above). Real estate in the harbour area is in short-supply and significant operational expansion over the last 10 years has placed huge strain on the road and rail networks and the surrounding industrial areas. In recent times the expansion of containerised handling facilities has radically affected the traffic flows, even in nearby residential areas such as the Bluff. With increasing demand for premium containerised port handling facilities, the old Durban airport has been sited for development of a new port, perhaps the biggest and most ambitious construction project yet in South Africa. While one can marvel at the development over what is a relatively short period of time (a generation), spare a moment and view the seemingly archaic slideshow of Durban harbour purportedly between 1940 and 1960 – which some amongst us can even remember. Enjoy!

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Artistic impression – Durban Dig-out Port

Freight and Trade Weekly (FTW) reports that a team has been assembled to sort out the funding for the new dig-out port on the old Durban International Airport site (FTW November 9, 2012) – a project that represents a potential major shot in the arm for the economy of the region and the country. The consortium is composed of the well-known Dutch port consultants, MTBS; the highly respected international engineering firm, Arup; and Durban-based lawyers,Van Velden Pike Incorporated, in association with Nichols Attorneys.

This consortium is to act as transaction advisers to Transnet, on what is, according to government, likely to be SA’s flagship public/private sector partnership initiative.That will be part of the team’s studies, according to Andrew Pike, partner in Van Velden Pike. However, the study, although started, is still very much in pre-feasibility stage, and there is obviously still no firm comment to be made on what direction the public/private element will take, he told FTW.

Further abroad, AECOM has announced (Oct 2012) that Transnet has awarded the company a US$3.4-million contract to initiate the design of the Durban Dig Out Port in South Africa. AECOM’s has experience delivering creative design services for major ports around the world, such as the New Port Project in Doha, Qatar. As part of the contract, AECOM will provide concept and pre-feasibility design services for the new port and container terminals, including all associated infrastructure relating to its operation. A critical aspect of the design will be ensuring the sustainability of the port throughout the construction phase as well as all of the operational phases of its development.

The Mercury reports that work on the multi-billion rand project is expected to commence in July 2016, with the first phase of the project completed by 2019. Development of the project is to be over a 30-year period. The construction phase will provide an estimated 64,000 jobs, while 25,000 permanent jobs are envisaged in the functioning port.

The scale and details of the project are staggering. The port will involve liquid fuel, automotive and container cargoes. The siting of the entrance to the port will require the relocation of the Shell and BO Refinery’s (Sapref) single buoy mooring. The construction of the southern breakwater alone will absorb 16% of the total cost and will require special sources of quarry stone. Environmental concerns are being taken very seriously. For example R85-million has been budgeted to relocate some 2,000 chameleons which inhabit a part of the northern section of the airport site.

Of particular significance is that without the dig-out port, Durban will stagnate as a port of call and experience decline. Already Cape Town does not have the capacity or berths deep enough to handle the new generation of 18,000 TEU ships that are due soon. Durban’s proximity to the Witwatersrand makes it the logical and preferred destination for container shipping. Studies have shown that the old airport site is ideal for the construction of a new harbour designed specifically to manage the size and volume of container shipping. Durban’s geographical location in the southern hemisphere is particularly advantageous as regards intercontinental shipments from the east to South America and beyond to the north Atlantic. Sources: FTW, AECOM, and The Mercury.

 

On a subject close to my heart. The National Detector Dog Unit of the South African Revenue Service (SARS) is getting a boost with more than 70 new dogs and handlers being trained to make up a number of new dog units around the country. Apart from filling a couple of current vacancies, the new recruits will form part of Detector Dog Units in Port Elizabeth, Zeerust, Mahamba, Vioolsdrift, Nakop, Maseru Bridge and an expanded Mpumalanga unit. All the additional units are expected to become operational in the first quarter of 2013.

“By next year, most of the major land, sea and air ports should have their own detector dog units (DDU),” said the senior manager of the DDU, Hugo Taljaard. “The ultimate aim is to have dog units at every port, with a total of 500 new handlers and dogs needed. However, this is a long-term (four-year) project, aimed at enhancing our non-intrusive capabilities at ports of entry to prevent cross-border smuggling.”

The SARS Detector Dog Unit has also been asked recently to assist with training in Namibia and Angola, following the assistance we gave the Mauritius Revenue Authority (MRA) to establish a Detector Dog capability. The DDU continues to see major successes countrywide, with a recent copper bust in the news last weekend.

Detector dog Umaga, an 18-month old German Shepherd, sniffed out 84kg of copper at the Beit Bridge border post during his first operation. Umaga recently completed his training as a copper sniffer dog. The copper was concealed in luggage in a trailer entering South Africa. Umaga is the second sniffer dog to be trained to sniff out copper. Milo, a five-year-old Labrador, has also already nosed out his first contraband copper. There has been an increase in the smuggling of copper wire across the border into South Africa, since copper has a much higher value here than in the other member states of the Southern African Development Community. The increase has meant that Customs has had to beef up its ability to detect contraband copper. The wire is usually concealed in compartments under trucks.

The Detector Dog Unit was the first in the world to train “dual application dogs”, Hugo explained. So instead of being trained or “imprinted” to detect only one scent, they are able to detect a combination of scents, e.g. narcotics and currency, tobacco and endangered species. Both Milo and Umaga are dual dogs and they can detect narcotics/tobacco and copper wire. The explosives detector dogs are the only dogs not dual trained due to the safety risk.

The dogs are an integral part of our Customs workforce and are seen as officers in their own right. They are therefore looked after with the utmost care and attention and are even provided with special reflector jackets, cooler jackets for the heat and dog shoes made to protect their feet from hot surfaces. Source: SARS Communications Division

With reference to an earlier post “Trade costs and corruption in Ports of Durban and Maputo” (March 2012) the following article ‘Hawks probe Khulubuse Zuma’s pal’ published by the Daily News (Durban) suggests more sinister individuals involved in the scam which saw a policeman being gunned down at his home and no less than 10 SARS officials placed on suspension. A web of intrigue indeed.

A wealthy South Africa-based Taiwanese businessman and former business associate of Khulubuse Zuma, a nephew of President Zuma, is being probed for alleged links to a multibillion-rand racket at Durban Harbour. In June the Hawks in KwaZulu-Natal secured a warrant of arrest for Jen Chih “Robert” Huang, CEO of Johannesburg-based company, Mpisi 74, when investigators from the elite unit also raided Huang’s business in Bedfordview, and his home.

Huang, a convicted murderer, was in Hong Kong on business when the warrant was issued, and it has not been executed after he side-stepped the Hawks by directly approaching the National Prosecuting Authority (NPA) to make representations as to why he should not be arrested. The businessman, part of a delegation that accompanied President Zuma on a state visit to China in 2010, is wanted on multiple counts of alleged corruption.

According to Daily News, Huang denied having any links to alleged illegal activity at the harbour, and referred all queries to his attorney. “I have been out of the country. “Speak to my attorney in Durban. He is handling all matters related to my company.” His attorney, Quintus van der Merwe, confirmed representations had been made to the State, but declined to comment further.

The warrant for Huang’s arrest came weeks after a former South African Revenue Service (Sars) anti-corruption task team member, Etienne Kellerman, was arrested on 80 counts of alleged corruption. Kellerman, 42, is suspected of receiving substantial benefits for allegedly allowing contraband through the harbour. The Daily News broke the story when Kellerman was arrested in April this year after a three-year covert investigation. An international syndicate that was allegedly bribing customs and police officials to allow in container-loads of contraband, was also exposed by the Hawks.

Sars spokesman, Adrian Lackay, told the Daily News that following the joint investigation with police over several months into the existence of a criminal syndicate operating at Durban Harbour, 10 Sars employees had been suspended. “Their suspensions follow the arrests of other suspects outside of Sars. These employees were suspended over a three-week period following the arrest of Kellerman on charges related to fraud, theft and misconduct,” he said.

“The 10 employees remain suspended pending the outcome of an internal investigation into alleged involvement with clearing agents.” Over the past two years, during this investigation, police seized more than R1 billion worth of counterfeit goods and contraband. The alleged corrupt Sars and police officials are believed to be working in teams between KZN and Gauteng. They are allegedly paid bribes of up to R30 000 for each container allowed to pass through customs undetected. Big name international companies, mainly from China, are also being investigated. Kellerman has pleaded not guilty and is on R100 000 bail.

According to its website – before it was removedMpisi 74 is a massive concern, offering a range of services, including import, export, forwarding, warehousing, cellphone telecommunication and machinery, as well as vehicle manufacturing. Just days after Huang was contacted by the Daily News, the website was taken down.It had even boasted pictures of the president’s nephew, Khulubuse Zuma, with the Taiwanese businessman at the company’s headquarters in Bedfordview, on December 9, 2009. The Mail and Guardian, in January, described Huang as the influential middleman in deals between Chinese companies and Khulubuse Zuma. It said Huang was also instrumental in introducing Chinese vehicle manufacturer, Dong Feng Motor Corp, to Khulubuse Zuma, who at one point was the “chairman” of Mpisi.The report said that in 2010, Dong Feng announced a joint venture with Khulubuse Zuma and Huang to distribute its products in South Africa and the rest of the continent.In 1998, Huang was convicted of the murder of a Taiwanese businessman, Ching-Ho Kao, who was found shot dead in March 1996, in the Free State. His body was set alight. The trial began in the Bloemfontein High Court in November 1997. The indictment claimed the motive for the murder was that Kao’s family owed Huang money. Huang was sentenced to an effective 12 years in prison. But, through remission of sentence, he was released in 2003 and set up Mpisi 74.

Source: Daily News (Durban)

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FTW Online last week ran an interesting article in response to a proposed change in Customs’ policy concerning the national transit movement of containers from coastal ports to inland container terminals and depots. In February 2011, I ran an article Customs Bill – Poser for Cargo Carriers, Handlers and Reporters alluding to some of the challenges posed by this approach. The following article goes a step further, providing a trade reaction which prompts a valid question concerning the practicality and viability of the proposed change given logistical concerns. I believe that there is sufficient merit in the issues being raised which must prompt closer collaboration between the South African Revenue Service and trade entities. For now it is sufficient to present the context of the argument – for which purpose the full text of the FTW article is presented below. In Part 2, I will follow-up with SARS’ response (published in this week’s edition of the FTW) and elaborate on both view points; as well as consider the matter  on ‘raw’ analysis of the ‘cargo’ and ‘goods declaration’ elements which influence this matter. Furthermore, one needs to consider in more detail what the Revised Kyoto Convention has to say on the matter, as well as how other global agencies are dealing and treating the matter of ‘security versus facilitation’.

Customs’ determination to have all goods cleared at the coast does not bode well for the South African trade environment, Pat Corbin, past president of the Johannesburg Chamber of Commerce and Industry (JCCI), said. Speaking at the Transport forum in Johannesburg Corbin said the Customs Bills have been on the cards for several years now and while consensus had been reached on most issues in the Nedlac process, the determination of Customs to not allow for any clearing to take place at inland ports will only add more pressure to the already overburdened ports in the country. “Customs maintains that despite the changes they propose it will be business as usual. We disagree. We have severe reservations about their intention to terminate vessel manifests at the coastal ports in all cases and have called for further research to be undertaken in this regard,” said Corbin. “By terminating the manifest at the coast it has severe ramifications for moving goods from road to rail. International experience has shown when you have an inland port and you have an adequate rail service where the vessel manifest only terminates at the inland port, up to 80% of the boxes for inland regions are put on rail while only 12% land on rail if the manifest terminates at the coastal port.” Corbin said the congestion at both the port and on the road would continue and have an adverse impact on quick trade flows. “It also raises issues around the levels of custom security and control at inland ports and then the general implications on the modernisation project.” According to Corbin, government’s continued response has been that no provision exists for inland ports and that goods must be cleared at the first port of entry. “They maintain that it is about controlling goods moving across our borders and thus the requirement that all goods must be cleared at the first port of entry. The security of the supply chain plays an important role to avoid diversion or smuggling of goods,” said Corbin. “Government says that the policy change will not clog up the ports or prohibit the seamless movement of trade. Labour organizations and unions seem to agree with them.” But, Corbin said, the Johannesburg Chamber of Commerce differs and is worried about the ramifications of this dramatic change to the 35-year-old option of clearing goods at an inland port or terminal. “With this policy change all containers will have to be reconsigned after not only Customs clearance on copy documents but also critically, completion of shipping lines’ requirements ie, payment of freight, original bill of lading presentation and receiving delivery instructions prior to their issuing a delivery order.” Corbin said the issue had been addressed directly with Transnet CEO Brian Molefe on two occasions, but that he had said he accepted Customs’ assurance that nothing would change and the boxes would still be able to move seamlessly once cleared. “It is not understood that the manifest will terminate at the coast where all boxes will dwell until they can be reconsigned,” said Corbin. Source: FTW Online – “New Customs Bill ruling will put pressure on port efficiency.”

Ports.co.za reports that  the largest ever container ship to enter a South African port on 1 July 2012 to work cargo will arrive in the Port of Durban, vindicating the recent widening and deepening of the harbour entrance.

The ship is the MSC SOLA (131,771-gt, built 2008) which is arriving from Port Louis and the Far East. Although she will not be fully laden the arrival of the 364 metre long ship becomes another justification for the recent harbour entrance channel project, which saw it widened by an additional 100m to a minimum width of 222m and deepened to a working draught of -16.5m. Once work on deepening at least one of the container terminal berths on Pier 2 has been completed ships of this size will be able to arrive or sail fully laden.