It’s a matter of third-time lucky as Transnet National Ports Authority (TNPA) announced the winning bidder for the Durban cruise terminal – KwaZulu Cruise Terminal Pty Ltd (KCT) – a Joint Venture between MSC Cruises SA (a subsidiary of MSC Mediterranean Shipping Company SA) and Africa Armada Consortium (a black empowerment partner).

The flagship cruise terminal project would see over R200 million invested and create significant jobs for Durban.

In announcing the bid winner TNPA Chief Executive, Richard Vallihu said the bid winner had put together an exciting concept and had the experience to deliver a facility that would be the jewel in the crown of the Port of Durban.

Richard Vallihu anounces bid winner
Richard Vallihu anounces bid winner

It would be an asset within Durban’s “Smart People’s Port” that would create more opportunities for surrounding communities to participate in the local economy.

The project planning would start in earnest in October this year once negotiations were finalized, construction would start in May 2018 and the terminal would be in operation in October 2019, said Ross Volk MSC Cruises Managing Director SA and MSC’s representative in KCT.

Ross Volk MSC Cruises Managing Director SA
Ross Volk MSC Cruises Managing Director SA

In terms of job creation he said TNPA’s desktop research showed that an estimated 10 000 jobs could be created by the terminal once in operation.

KCT will be responsible for the design, financing, construction, operation and maintenance and transfer of the cruise terminal for a 25 year concession period.

The cruise terminal will be developed in phases and will ultimately be able to accommodate two 300m cruise liners at a time and it will, in terms of the National Ports Authority requirements, be open to all cruise liners.

The new facility, which will be built A and B berths adjacent to the Point Water Front near the Lion Match offices, will have viewing decks open to the public to view ships entering the port as well as other auxiliary services such as restaurants, tourism related shops, the MSC training school and house the SA Police Services, Customs, Home Affairs and other government departments.

“Despite the global economic situation, the global luxury cruise sector remains one of the fastest growing segments in the tourism industry and in Durban the cruise market had grown from 75 947 passengers ten years ago to 191 412 passengers last season.

“Already we have at least 20 international cruise liners operated by 14 cruise lines calling at South Africa’s ports,” said Vallihu.

TNPA was striving to work more closely with municipalities, provinces and the tourism sector to ensure alignment between goals and planning to cater for this fast growing market.

Currently vessels have been using the port’s N-Shed, which was upgraded ahead of the 2015/16 season.  TNPA’s position in terms of its cruise strategy was to offer new and modern cruise terminals that would provide an ideal gateway to a unique South African experience.

Durban’s “Smart People’s Port”
Durban’s “Smart People’s Port”

Councillor Nkosenhle Madlala representing the eThekwini Mayor Cllr. Zandile Gumede said that the cruise terminal was linked to the City’s Point Water Front, a catalyst development project, and it was expected that the terminal development would boost property values in the precinct.

Only two bids were received for this tender process and the second bid was disqualified because it was submitted late.

The previous two failed bids in 2013 and 2015 were alluded to during the proceedings with Vallihu stating that putting together the bid has been a huge learning curve, but TNPA had continued pushing for it and that is why this bid announcement was so important today.

Lauriette Sesoko TNPA General Manager Commercial pointed out that there had been a lot of collaboration with the eThekwini Municipality about the cruise terminal and this was one of the reasons for having to rework the Request for Proposal.

KCT’s equity is currently divided into 70% ownership by MSC Cruises SA and 30% ownership by Africa Armada Consortium. It is classified as an EME (Exempted Micro Enterprise) and is anticipated to grow into a QSE (Qualifying Small Enterprise).

Africa Armada Consortium is a black economic empowerment investment company aimed empowering its black investors through participation in economic activities‚ especially port and logistics developments.

 

TNPA has only just begun with its Section 56 concessions.

Transnet National Ports Authority (TNPA) had only recently begun to leverage off Section 56 of the National Ports Act, but already there were a number of very positive developments in place at South African ports as a result said Richard Vallihu, TNPA Chief Executive during the announcement in Durban of the preferred bidder for the Durban Cruise Terminal, today.

He listed the Section 56 developments as:

The new cruise liner terminal, and investment of over R200 million by – KwaZulu Cruise Terminal Pty Ltd (KCT) – a Joint Venture between MSC Cruises SA (a subsidiary of MSC Mediterranean Shipping Company SA) and Africa Armada Consortium (a black empowerment partner) – in the Port of Durban to encourage private sector participation in the port;

The appointment of the V&A Waterfront Company as the operator of the Cape Town cruise passenger terminal for a period of 20 years;

The black-empowerment company Burgan Cape Terminals awarded a 24-year lease to develop a new independent fuel storage, distribution and loading facility at the port of Cape Town;

Sunrise Energy awarded a 30-year concession to build and operate a liquefied petroleum gas (LPG) terminal at the Port of Saldanha. Sunrise Energy is 49%-owned by the Industrial Development Corporation (IDC) and 51% by project developers Ilitha Group Holdings.

At the Port of Ngqura a Build, Operate and Transfer (BOOT) agreement was signed with Oiltanking Grindrod Calulo Holdings to plan, fund, construct, maintain and operate a new liquid bulk handling facility.

“Engaging the private sector to participate in our ports for the stimulation of economic growth and creation of jobs is a key element of the Transnet Market Demand Strategy (MDS),” said Vallihu.

With these Section 56 projects TNPA enters into an agreement for the operation of a facility, in accordance with a procedure that is fair, equitable, transparent, competitive and cost effective, as stipulated in the National Ports Act.

“It is a delicate balancing act to ensure that we deliver facilities that are world-class that will comply with our service and operating standards once commissioned, and at the same time, that we open up opportunities for new entrants. It calls for collaboration of role players to develop inclusive models, in the spirit of the National Ports Act,” he said.