Port Natal – Durban Harbour 40s, 50s and 60s

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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Durban “Dig-out” port – a flagship PPP initiative?

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.

 

Grindrod – coastwise feeder expansion to extend services between Durban and Angola

South African logistics and shipping firm Grindrod has continued its expansion programme, with the purchase of Safmarine’s 51% stake in Ocean Africa Container Lines. Grinrdod gave no details of the price paid for Safmarine’s stake in Ocean Africa Container Lines (OACL), but Grindrod now fully owns the company, which operates a feeder service with four vessels between Durban and Angola, calling at several ports in between, including in Namibia and Angola.

OACL’s former COO, Mahmood Simjee, has now been appointed CEO. Grindrod hopes that OACL can continue to benefit from close ties with Safmarine and the latter’s parent company, Maersk. OACL could take advantage of Ngqura’s growing role as a transhipment port, particularly with Angolan ports. The shipping line previously operated between Durban and Mozambican ports and could again resume this role.

Röhlig-Grindrod, a joint venture between Grindrod Limited and Röhlig International, has also acquired Sturrock Group’s clearing and freight forwarding division in exchange for a 15% stake in Röhlig-Grindrod, leaving the founding partners with 42.5% equity each in the venture. The inclusion of black empowerment partners in Sturrock Group helps Röhlig-Grindrod to fulfil its empowerment requirements.

Hylton Gray, the CEO of Grindrod Logistics, said: “We are very pleased with the merger of the businesses and the introduction of the empowerment partners. Calulo, a partner in the Sturrock Group, already has a stake in Grindrod’s South African operations and has contributed significantly by way of existing relationships and experience in niche markets.” Source: worldcargonews.com

Corruption at Durban Harbour – the plot thickens

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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Durban awaiting arrival of 11, 660 TEU container ship

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.

Trade costs and corruption in Ports of Durban and Maputo

Recent years have brought an increased awareness of the importance of trade costs in hindering trade, particularly in the developing world where these costs are highest, says a report in the latest edition of Port Technology. The most salient type of trade costs have often been tariff duties and costs associated with the physical transportation of goods. As a result, several countries embarked on extensive programmes of tariff liberalisation and a significant portion of aid effort was channelled to investments in hard transport infrastructure, such as rebuilding railways and ports (the World Bank alone devotes more than 20 percent of its budget to transport infrastructure projects worldwide).

More recently, new light has been cast on the importance of a different type of trade cost: the cost imposed by the soft infrastructure of transport, defined as the bureaucratic infrastructure handling the movement of goods across borders. While there are many possible sources of inefficiencies stemming from the soft infrastructure of transport, recent research is beginning to document the role played by corruption in transport bureaucracies in driving trade costs. This article provides an overview of this research.

Research into corruption

Corruption can take many forms and emerge in many different phases of the process of clearing goods across borders. Sequeira and Djankov (2011) documented in great detail the ways in which port corruption emerges in Durban and Maputo in Southern Africa – this report is featured in my next post. This research was based on a unique dataset of directly observed bribe payments to each port bureaucracy for a random sample of 1,300 shipments.

The study began by defining two broad categories of port officials that differed in their administrative authority and in their discretion to stop cargo and generate opportunities for bribe extraction: customs officials and port operators. In principle, customs officials hold greater discretionary power to extract bribes than regular port operators, given their broader bureaucratic mandate and the fact that they can access full information on each shipment, and each shipper, at all times. Customs officials possess discretionary power to singlehandedly decide which cargo to stop and whether to reassess the classification of goods for tariff purposes, validate reported prices of goods, or request additional documentation from the shipper.

Regular port operators, on the other hand, have a narrower mandate to move or protect cargo on the docks, and at times even lack access to the cargo’s documentation specifying the value of the cargo and the client firm. This category of officials includes those receiving bribes to adjust reefer temperatures for refrigerated cargo stationed at the port; port gate officials who determine the acceptance of late cargo arrivals; stevedores who auction off forklifts and equipment on the docks; document clerks who stamp import, export and transit documentation for submission to customs; port security who oversee high value cargo vulnerable to theft; shipping planners who auction off priority slots in shipping vessels, and scanner agents who move cargo through non- intrusive scanning technology.

The organisational structure of each port created different opportunities for each type of port official to extract bribes: the high extractive types -customs agents- or the low extractive types -port operators. These opportunities were determined by the extent of face to face interactions between customs officials and clearing agents, the type of management overseeing port operations, and the time horizons of each type of official.

Durban and Maputo

In Durban, direct interaction between clearing agents and customs’ agents was kept to a minimum since all clearance documentation was processed online. In contrast, all clearance documentation was submitted in person by the clearing agent in the Port of Maputo. The close interaction between clearing agents and customs officials in Maputo created more opportunities for corrupt behaviour to emerge in customs relative to Durban.

In Maputo, port operators were privately managed but in Durban, most terminals (for containerised cargo) were under public control, with very lax monitoring and punishment strategies for those engaging in corrupt behaviour. Private management in Maputo was associated with fewer opportunities for bribe payments due to better monitoring and stricter punishment for misconduct. As a result, the organisational features of each bureaucracy determined that the high extractive types in customs had more opportunities to extract bribes in Maputo, while the low extractive types in port operations had more opportunities to extract bribes in Durban. While corruption levels were high in both ports, bribes were higher and more frequent in Maputo relative to Durban.

Finally, port officials with opportunities to extract bribes at each port differed in their time horizons. Customs in Maputo adopted a policy of frequently rotating agents across different terminals and ports, and since bribes varied significantly by the type of terminal at the port, customs agents were aware of the risk of being assigned to terminals with lower levels of extractive potential. On the other hand, port operators in Durban had extended time horizons given the stable support received from dock workers’ unions. Customs officials were therefore the high extractive types with the shortest time horizons, the broadest bureaucratic mandates and more opportunities to interact face to face with clearing agents. As a result, they extracted higher and more frequent bribes, relative to port operators in Durban (the low extractive types) who had longer time horizons and narrower bureaucratic mandates. Source: Port Technology.

Durban – Harbour mafia busted!

A 3-year covert investigation into a multi-billion rand racket at the Durban harbour has exposed an international mafia, allegedly bribing customs and police officials to allow in container-loads of contraband.

This week, a former Sars customs official was taken by surprise when Hawks and Sars investigators swooped on his Umbilo home and arrested him on 80 counts of alleged corruption. Etienne Kellerman, 47, a former Sars anti-corruption task team member, appeared in the Durban Regional Court on Tuesday. He was released on R100 000 bail and the matter was adjourned to next week. Kellerman is suspected of receiving substantial benefits for allowing contraband through. It is alleged that Sars lost millions of rand in revenue as a result. He resigned from Sars three years ago, days after he was quizzed by Sars investigators about his alleged role in the racket. His job had been to profile and identify high risk companies and containers entering the country.

A further seven Sars officials from Durban and Johannesburg were suspended for their alleged roles in the smuggling racket. Hawks investigator and project manager of this undercover operation, Colonel Brian Dafel, said that in coming weeks they would swoop on 100 more suspects in the country, including Sars officials, police and syndicate members, on charges ranging from racketeering, corruption, money laundering, extortion, murder and attempted murder.

Warrant Officer - Johan NortjeHe said the investigation was triggered by informers who tipped them off about the alleged crooked activities and racketeering at the harbour. The undercover investigation was a joint operation by the Hawks, Sars, independent law enforcement agencies and other key role players, Dafel said. He said they were also closing in on suspects believed to have ordered the hit on Warrant Officer Johan Nortjé, an officer in the police’s protection security service. He was responsible for investigating smuggling of goods and drugs through Durban harbour. A hit was allegedly ordered on his life days after he made a R100m counterfeit bust at the harbour. Nortjé was gunned down outside his Montclair home on January 17 last year, 10 days after he had made the bust.

“Nortjé was one of the few honest cops. He was aware of the container racket and was determined to expose it. He was killed because he was hampering the operation of the syndicate members,” Dafel said.

“This is a very dangerous investigation that involves extremely high levels of corruption. “Durban harbour is the biggest port authority that handles 40 percent of the containers nationally. In the past two years, during this investigation, we have seized over R1 billion worth of counterfeit goods and contraband.” He said that several witnesses had been placed in witness protection programmes as they feared for their lives. “People’s lives have been threatened and hits have been ordered. But, none of this will deter this investigation.

Dafel told the Daily News that investigations had revealed that certain SARS and police officials were working in teams between KZN and Gauteng. “This could not be done alone. They worked in groups, including those who cleared the documentation to those who inspected the containers and gave them the final clearance.

Thousands of containers pass through the harbour daily and it is impossible to check each and every one. That is how the counterfeit goods and contraband got through so easily. The syndicate members also communicate through cellphones making it a very smooth operation. He said every member of the syndicate was paid for his or her role in allowing the illegal goods through. The potential value of the illegal commodities was between R10 and R20 million for each container. The international mafia pays bribes of up to R30 000 per container that is allowed to pass through customs undetected. It is reported that one of the biggest problems is the clearing agents who work in cahoots with the police and syndicate members.

Dafel said many of the SARS and SAPS officials who were being investigated stood accused of allowing counterfeit goods or contraband to enter the country illegally, or under-evaluating containers. Since the investigation started, much stricter measures are in place at the harbour making it difficult to smuggle goods into the country. “We have closed the gap significantly for any form of corruption to take place. Also, staff know that they will be arrested and charged if they break the law,” Dafel said.

He said they were also working closely with people abroad and international law enforcement agencies to close in on the racketeers. “There are big name international companies, mainly from China, that are also being investigated. In fact, the goods imported from China are the biggest problem.” Source: Daily News E-edition

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Vetch’s Pier – a relic of floored planning

With recent developments regarding the proposed Durban dug-out port, a colleague of mine shared this gem of an article.

Vetch’s pier (Durban, South Africa) has redeemed itself by becoming a marine sanctuary. Historically, however, it is an expensive relic, a monument to flawed planning, poor workmanship and economic frustration.

Although potentially a major seaport, Durban’s bay was little more than an inaccessible lagoon before dredging and the construction of the north and south piers over a century ago unlocked its real worth. Nature guarded its entrance in the form of shifting sandbanks which made access to the safety of the inner harbor unpredictable and hazardous. As a result entry was restricted to small vessels drawing less than three metres of water. All other shipping had to anchor offshore and endure the extremes of wind and sea. Not surprisingly 66 ships were blown ashore on Durban’s beachfront between 1845 and 1885.

It was obvious from the outset to the British settlers that Natal’s economic prospects depended on the development of Durban harbour. For almost 50 years from 1850 the ‘harbour issue’ was the hardy annual of Natal politics and the correspondence columns of newspapers. Various plans were put forward, that of Captain James Vetch gaining the approval of Governor John Scott in 1857. Vetch, an engineer attached to the Admiralty in London, never actually visited Durban, yet he produced a report and plan to improve the harbour. Despite misgivings, it was rushed through the Natal legislature in October 1859 along with its hefty price tag -£165,000.

Vetch’s solution was to enclose the natural entrance to the harbour by means of two breakwaters, one curving northwards from the base of the Bluff headland and the other curving southwards from present day Ushaka beach. Besides the engineering challenge which that posed, Vetch’s plan ignored the prevailing wind an ocean current directions. But in August 1861 when construction of the northern breakwater commenced, such concerns were lost amidst the optimism of a growing economy and the belief that Vetch’s plan would resolve the frustrations of navigating the entrance to the harbour. A comment in the Natal Mercury on 13 July 1861 summed up the buoyant mood of colonists when it stated that Vetch’s plan would herald ‘new circumstances and be the scene of a busy, all pervading and prosperous industry.

The site engineer, George Abernethy, encountered difficulties with Vetch’s plan from the outset. The method of construction was impractical: sections of wooden framework filled with rubble simply collapsed in the surf, moreover, the contractor, Thomas Jackson, lacked the capacity to carry out the construction. Early in 1863 it was apparent that the six year project was stalled. Yet £90,000 of the budgeted £165,000 had been spent while less than ten percent of the work had been completed. Financial reasons and poor construction methods saw  Vetch’s pier abandoned in 1864. In time the ocean reduced it to what it is today. Both in design and placement, the small craft harbour now being proposed ignores the same natural forces that made Vetch’s plan impractical. Besides, it specifically ignores the pounding effects of the cyclone swells which emanate occasionally from the Mozambique channel.

In May 1864 a furious Natal Legislative Council demanded a detailed report on the Vetch project. In June the contractor walked off the job and left Natal. The Report tabled in August proved an embarrassing indictment. It found that no oversight had been exercised by Treasury officials on certificates for amounts payable and that the contractor had received payments in excess to that which he was entitled. It was also noted that freight for some materials had been paid for twice; that material had been ordered which was in excess of actual needs. To top it all, £113,500 or 70 percent of the allocated budget, had been spent on a project that was scarcely 20 percent complete and the problem of accessing Durban harbour was no closer to resolution.

Far from invigorating Natal’s economy, the submerged finger of an incomplete pier named after its designer, Captain Vetch, proved a drain on the colonial treasury for years to come, interest on the loan for the project amounting to about 17 percent of total revenue. A project born out of economic frustration left a legacy of even greater economic frustration. Until the 1880s Durban harbour languished having gained a reputation as a port of high charges and long delays. But from 1886 when dredging operations began, followed by extension of the breakwaters, the depth of the entrance channel improved. By 1892 it averaged over four metres allowing larger ships to cross the bar.

But the way forward was dogged by controversy. Two camps developed: one which saw the solution in dredging, the other in the extension of the north pier. So great was the agitation that it led to the fall of the government of Harry Escombe in October 1897. Ultimately, a combination of the scour facilitated by the north and south piers and the effects of dredging resolved access to Durban harbour. In 1904, the Armadale Castle, drawing 6,7 metres of water, became the first mail-steamer to enter the port.

Although incomplete and a non-starter, the remains of Vetch’s pier should serve as a reminder of the power of the ocean and the need for fearless scrutiny of public projects. Source: Duncan Du Bois (Ward Councillor) and Facts About Durban

New Durban dug-out Port – tenders released

State-owned freight logistics group Transnet has followed up its recent R1.8-billion purchase of the old Durban International Airport site, in KwaZulu-Natal, with the release of a number of separate tenders in support of its proposal to develop, in phases, a new dig-out port on the property.

The first phase, which was currently scheduled for completion in 2019, was expected to require an initial investment of R50-billion, with the balance of the project to be completed by 2037.

The first request for proposals (RFP) relates to the appointment of a transaction adviser for the project. The adviser will provide technical assistance relating to the establishment of a business model for the development of the harbour.

Transnet currently envisages a phased development of a facility comprising 16 container berths, five automotive berths and four liquid bulk berths. Its high-level infrastructure plan indicated that the container terminals would have the collective capacity to handle 9.6-million twenty-foot equivalent units, or TEUs, once all four phases were completed. That, the group argued, would be sufficient to address South Africa’s container capacity requirements to 2040.

The transaction adviser would be expected to complement and supplement the work, resources and expertise that Transnet had dedicated to the project internally. The consultant was expected to cover the legal, financial, environmental, economic and technical aspects of the proposed development. In order to facilitate the opportunity for financial planning and policy engagement, it is necessary to complete the assignment within an 18-month period.

The second RFP invites consultants to conduct conceptual and prefeasibility studies for the development . Transnet will employ a four-stage project lifecycle process for its capital expansion projects, with the two front-end loading (FEL) studies making up the first two stages. FEL implies upfront planning and engineering in order to reduce, as much as possible, the risk of scope creep and to ensure financial accuracy for the project. The FEL-1, or conceptual study, is scheduled to be completed by the end of March 2013, while the FEL-2 study should be finalised by the end of March 2014. Source: Creamer Media

China leads shake-up in distribution methods

Out of respect for copyright, I would encourage all logistics followers to visit this link to learn more about a significant shift occurring in the distribution of containerized goods. Some food for thought considering local conditions in South Africa which currently appear to marginalize (if not discourage) inland localisation and multi-modal distribution of goods between the hinterland and major air and sea ports in Southern Africa. Source: FT.com

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EU ‘green tax’ will hit South African exporters

At the expense of coming across a bit cynical – what exactly is the aim of the ‘carbon emission’ movement? We know it’s a United Nations initiative; that many politicians, ex presidents, scientists and climatologists warn against the use traditional energy sources and preach of cataclysmic consequences if we do not need heed their call; that it has become the latest excuse for more government imposed taxes; that the very mention of CO2 conjours up animosity between the rich and poor nations in much the same way as the mention of the WTO. Lets not forget there’s even a ‘Green Customs Initiative’ just so that we can all feel mutually inclusive.

An article just published by IFW-net.com suggests that exporting from South Africa could become even more expensive if the country’s free-trade deal with the European Union (EU) is brought to an end and replaced by a shipping tax next year. The current trade deal removes tariffs on 98% of South Africa’s exported goods. Trade between the two regions creates around R400 billion (US$48bn) a year. Seems like taxation is the West’s latest answer to the failing WTO overtures on free trade!

At the United Nations conference on climate change in Durban, the EC will announce plans to tackle emissions. The proposed shipping tax, aimed at lowering carbon emissions, is expected to dramatically increase the cost of imports into the EU.

The EU’s envoy to South Africa, said shipping and aviation was a main contributor to carbon emissions.“That is why we are quite persistent that a shipping and aviation tax must be included in any deal that hopes to limit carbon emissions.” he said.

The EU has also sparked controversy over its plan for Emissions Trading Scheme that will apply to all airlines flying through its airspace from 1 January 2012.

One way or the other, SARS gets the monopoly on collecting the tax, regardless of its form.

For an alternative view on ‘green stuff’ read “The Recession Hits the Green Movement“. It’s perhaps a lot closer to the truth than all the ‘saving-the-planet’ stuff being dished up by the mainstream media.

Cargo Dwell Time in Durban

An acquaintance in the forwarding industry brought this working paper to my attention. Titled “Cargo Dwell Time in Durban“, it is very useful reading for logistics operators, Customs and government agencies, and policy makers. The object of the working paper attempts to identify the main reasons why cargo dwell time in Durban port has dramatically reduced in the past decade to a current average of between 3 and 4 days. A major customs reform; changes in port storage tariffs coupled with strict enforcement; massive investments in infrastructure and equipment; and changing customer behavior through contractualization between the port operator and shipping lines or between customs, importers, and brokers have all played a major role. The main lesson for Sub-Saharan Africa that can be drawn from Durban is that cargo dwell time is mainly a function of the characteristics of the private sector, but it is the onus of public sector players, such as customs and the port authority, to put pressure on the private sector to make more efficient use of the port and reduce cargo dwell time. The Working Paper is the product of the World Bank’s Africa Region, Transport Unit, being part of a larger effort  to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org

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Durban Dugout – more about Transnet’s thought process

Durban DugoutWhile the ‘bean counters’ at ACSA and Transnet continue to finalise the sale of the old Durban airport, its good to  understand  Transnet’s alternative options in so far as port expansion on the eastern seaboard is concerned. I came across the following document which not only details the current ‘dugout site’, but also includes designs for an equally  impressive container terminal at Richards bay.  Click here!

Durban’s Dugout Port Proposal – Reality or Pipe Dream?

Airport Site Overall 1I received these pictures in an e-mail today. 15 minutes of surfing (the web kind) reveals plans by Transnet to procure the old Durban International Airport site from ACSA and dugout a new port to meet future demand and ensure that Durban remains Africa’s busiest port. Point of correction, Durban Harbour seeded this title to Port Said in Egypt a few years ago, so it would appear someone has a grandiose plan to bring about a mega development which is all honesty is ludicrous given the under-utilisation of Port of Ngqura (Coega) and its adjacent ‘white elephant’, the Coega Industrial Development Zone (IDZ). Government realised after 10 years that Coega was not a great strategic investment. Current levels of activity at  Ngqura are due largely to volumes since diverted from Port Elizabeth container terminal and some new transhipment activity. As long as South African high port charges, piracy up the east coast of Africa and the efficiency of the Suez Canal persist, it is highly unlikely that the shipping conferences are going to increase their traffic around the southern tip of Africa.

Airport Site Overall 2The dugout development cost is estimated at R50 billion, with a further R100 billion to be spent on infrastructure and inland logistics. Was FIFA 2010 not sufficient warning on over-capitalisation with limited return? Unless our ports and inland logistics pipelines begin offering significant advantages over Namport, Maputo and Beira, developments such as the old Durban airport will never realise its fullest potential. It has to be admitted that the concept is brilliant and awe inspiring, but realisation of such is but a daunting pipe dream, me thinks! Transnet chairman Mafika Mkwanazi, is most optimistic insisting that the project will happen with development needing to commence in 2015 to be ready for 2019. I would like to share in this optimism but not at the expense of the taxpayer. Source: IOLProperty.co.za