Business
South Africa Upgrades Port, Rail Infrastructure To Boost Exports
South Africa’s National Development Plan 2030 has identified the export sector as an engine for higher, more inclusive and job intensive growth, with an export volume target of 6 percent growth a year. To achieve this goal, the World Bank report identifies three opportunities to help ignite export growth, the least of which is resolving infrastructure bottlenecks.
“Resolving infrastructure bottlenecks and cutting logistic costs present a second opportunity to support export growth. Cutting the charges exporters incur for the use of ports, rail and telecommunications would promote competitiveness and benefit small and medium-size exporters and nontraditional export sectors,” notes the World Bank report.
“Border logistics is also important for trade in the region. The recent South Africa Budget Review sets out the initiatives under way to address the concerns we raise,” World Bank’s Purfield told AFKInsider. Despite “volatile and uncertain economic conditions worldwide,” Transnet SOC Ltd., the South African state-owned company responsible for the ports, as well as freight rail and fuel pipelines, says it “increased revenue by 14.3 percent in the six months ending September 2013 to $2.6 billion, driving profit higher by an impressive 71.2 percent while investing a massive $1 billion on rejuvenating and expanding infrastructure.”
The growth in income was driven by a 26 percent jump in containers and automotive-on- rail, and by a 12 percent increase in mineral and chrome volumes. “In terms of broad categories, the largest exports are Precious Metals, followed by Motor Vehicles, followed by Iron and Steel,” World Bank’s Purfield told AFKInsider.
“More specifically, the top 5 products exported in 2012 were gold, platinum, iron ore, gold, motor vehicles.” According to Transnet, “the performance in containers and automotive-on-rail far exceeds economic growth, confirming that we are winning both market share and the battle to shift rail-friendly cargo off the roads.”
In December, Los Angeles-based engineering firm AECOM Technology Corp. was awarded a three-year, $30 million contract by Transnet for up to 15 separate infrastructure projects in and around Cape Town, Saldanha and Postmasburg. “We have been working with Transnet since 2006,” Paul Dickard, AECOM’s Vice President of Corporate Communications told AFKInsider.
Transnet Port Terminals (TPT), a division of Transnet SOC, operates 13 cargo terminal operations across seven South African Ports – Durban, Richards Bay, Cape Town, Saldanha, Port Elizabeth, Ngqura and East London – which have seen containers increase by a 9.4 percent in the last review period.
