The South African government has approved a plan that paves the way for separating the management of the country’s eight commercial ports from Transnet Group and creating a separate state-owned company.
The Cabinet approved the start of work on the structure of the new organization. The decision is part of a reform program aimed at improving port efficiency. State-owned Transnet Group currently oversees both port management and terminal operations.
Transnet National Ports Authority is to be transformed into an independent company. The new structure will also be able to attract a minority investor from among South African development finance institutions. This could provide additional funding for modernizing port infrastructure and management. At the same time, the government has promised to preserve current employment levels.
Transnet Group, which operates South Africa’s ports, railways, and pipelines, will receive compensation and be able to focus on its operational activities. The government had previously allowed for the emergence of competing port operators and urged Transnet to privatize its operations.
Transnet has already signed a long-term concession with Philippine company International Container Terminal Services (ICTS) to operate the Durban container terminal. In addition, tenders have been announced for the management of other key terminals, including those at the ports of Ngqura and Cape Town.
The government says the reforms are aimed at improving the reliability, efficiency, and competitiveness of South Africa’s cargo operations and supply chains.
Critics, however, called the creation of a separate company “largely cosmetic,” saying it does not address the fundamental problems that have hampered port operations for years.
South African ports consistently rank among the lowest in efficiency ratings. Their operations are accompanied by disruptions and delays attributed to inefficiency, bureaucracy, insufficient investment, and staff shortages.
Supporters of the reform believe that the new model will allow each area to focus on its own responsibilities. They also note that independent port authorities are common practice in Europe and other parts of the world.
GLOAPM.COM