Growth for Jobs strategy (launch and implementation); Inefficiencies at the Port of Cape Town

Meeting report

Briefing on the Initiatives to improve efficiencies at the Port of Cape Town by Transnet SOC

The Committee was taken through the presentation. The presentation presented an overview of the Port of Cape Town:

R15.8 billion in Total Assets

• Total Port Area 9350ha
• Land Area 620ha
• Water Area 8730ha
• Distance around the Port is 20km
• 42 Berths
• three Ship Repair Facilities
• Marine fleet (4 tugs, two pilot boats, two launches & two work boats)
• 11 Licensed Terminal Operators (1 Container, 2 MPT, 6 Liquid bulk, 1 Cruise & 1 Breakbulk)

Port of Cape Town 8-Point Plan

1. Optimise the Port as a Delivery Platform
2. Combat Adverse Weather Conditions
3. Improve Truck Operations
4. Optimise Marine Services
5. Improve Information & Operations Visibility
6. Terminal Equipment & Port Infrastructure
7. People
8. Immediate Crisis Management

Members were taken through the long term strategy for Cape Town terminals and improvements to date to reduce port stays of vessels.

The presentation also looked at initiatives to attract private sector investment to support agriculture value chains

[Please see presentation for more information]

WCG: Port of CT Container Logistics Presentation

The Committee was taken through the presentation. 2019 was good rain after devastating drought

Fruit and wine represent almost 50% of WC exports. Yields also increased from improved rootstock

Port congestion drove stakeholders together. Root causes of congestion were identified as:

• Institutional, including poor logistics integration, communications, industrial relations, data and weak voice of cargo owners,
• No strategy for cargo growth, seasonal peaks, high wind speeds and ranging,
• Bunching of truck arrivals in the morning, with queuing on Marine Drive and Duncan Road

Six priorities

1. Inadequate operational Port and terminal equipment for growing cargo volumes

2. Improved communication in the Port Logistics Chain

3. Transporter Congestion

4. Data and Logistics Chain Integration

5. Comparative Best Practice Performance Indicators – Logistics Dashboard

6. Inland Terminal Development

It is estimated that container terminals contributed towards R72.5 bn of the GVA in Western Cape in 2021 (8.6%) and to the creation/sustaining of 225,000 jobs. Taxes paid from these activities was almost R20 billion. DEDAT interventions aim to facilitate the high-growth outcome in collaboration with all agencies in the port logistics chain.

Current situation summary

• Citrus export season started on 15 May.
• WTTB improved from >6 days March - 2 days May
• VTAT improved from >15 days March - 4 days May
• Big improvement on Linerlytica global port congestion watch: Position 7 on 28 March to  position 61 on 2 May (position 1 is most congested, with 143 ports on the list)
• Operational availability of rubber tyred gantries remains a critical constraint.
• Shore tensioners on two berths brought relief – 1 berth remains vulnerable to ranging
• Belcon will provide additional plug points
• Loadshedding is a significant constraint

Synopsis of successes to date

• Effective platform for collaboration established in Port of Cape Town Logistics Chain – Fourth Annual Port Stakeholder engagement held on 20 January 2023
• Hydraulic tensioners on two berths are mitigating the impact of ranging
• Port Manager has implemented a policy of zero tolerance for marine delays
• Transnet Port Terminals deployed a 9th ship-to-shore crane and a 3rd mobile harbour crane
• Critical indicators have improved, such as WTTB from >6 days March to 2 days May; and VTAT >15 days March to 4 days May
• Record performance of 21,000 TEU’s moved in the two TPT terminals during 1st week of April 2023
• PoCT position on Linerlytica global port congestion watch improved significantly
• First version of Port of Cape Town Container Logistics Dashboard Released
• Belcon will provide additional plug points for refrigerated containers at inland terminal

[Please see presentation for more information]

Discussion

Mr L Mvimbi (ANC) welcomed the presentations. What were the serious challenges and inefficiencies that the Port has faced? Can there be more information on the RTGs and OEMs? Has there been any mitigation on this matter? Are there any economic activities happening along the garden route?

Mr I Sileku (DA) referred to the first presentation and asked: would competent people fill the critical skills needed for certain positions due to the possible lack of these skills in the country? In the second presentation, can there be more information on the improvement initiatives that are currently in progress? On security issues, how much is Transnet spending on vandalism problems and how are they planning to mitigate this issue?

The Chairperson asked for more information on anchorage times, occupancy, utilisation container dwell times and loading rates. On the Port being at capacity, she asked what involvement there has been with the private sector in this regard, and on the shipping route, what areas could be included to increase exports.

Ms A Bans (ANC) said that on critical skills, the main issue was optimising marine services. This is a much specialised maritime environment and the skills needed are very critical and unique to the environment. There is also tailor-made training to materialise these skills for selected candidates. On improvement initiatives – various forums are used to discuss improvements in the Port of Cape Town and this is how issues are being raised.

The Department answered that there is constant engagement with the stakeholders to try to improve operations on the inefficiencies mentioned. The Port is not where we want it to be but there are improvements. On Real-Time Gross Settlements (RTGs) and other equipment – over-the-counter partnerships meant that a partnership was envisaged that extended beyond just a point of sale so that after the equipment had been bought, there may be possible investments in the country in skills and so on. On critical skills, there are OLEs which are being trained.

Ms Bans said that on the private sector involvement, there had been effort being put into seeking a private terminal operator. The briefing occurred on the 19 May and the RFP submission is closing on the 15 June. This is to allow the private sector to operate in our terminals.

Ms Bans said that on other opportunities, the traffic line is currently being revived from George to Knysna. On security, a lot of money has been spent.

The Department responded that on RTGs there is no idea of the RTGs that are required and there is no reliability to handle the volumes currently. One Original Equipment Manufacturer (OEM) has been awarded to handle the five RTGs. The plan is to acquire more RTGs so that one can build. There needs to be more investment in RTGs. It was difficult for the OEMs to invest because it would have undergone normal processes that are required for public entities and it is not certain that if there is maintenance required that they would get this and would lead to them getting tenders from time to time. The OEM is a long term plan consisting of seven years and once you have it, it needs a maintenance plan.

The Chairperson asked to who the dashboard is visible. When was it launched? How often is it updated? On Green Hydrogen – to what extent is the Port being capacitated to transport Green Hydrogen? If not in Cape Town, are there other Ports nearby facilitating this?

The Department answered that the dashboard is in development and is a pilot and has been designed for the Port and just outside the Port and there are plans to take it into the supply chain. The dashboard has been given to key players in the supply chain. Other players will be engaged with on-the-rollout of the dashboard.

The Department said that access the dashboard has been given to 20 users and they will provide feedback on the dashboard. The dashboard is updated every 30 minutes and it works with satellites. The developers will take feedback and improve the systems. The users are the representatives of the Cape Chamber, exporters, trucking, Transnet and operating divisions, and cold store managers. The dashboard will be given to shipping members.

The Department said that the organisation works with a complimentary port system on the Green Hydrogen. There are sector specialists appointed within the organisation that focus on different areas.

Mr D America (DA) asked what the level of efficiencies for a comparison between the Cape Town Port and the Durban Port were. On the topic of specialists - what strategies are the ports using to attract and retain the skilled personnel required to ensure long term operational efficiencies? To what extent is there consideration for artificial intelligence to be used for enhancement and efficiency in the Port of Cape Town?

The Department said that in terms of comparison of the Durban and the Cape Town ports, Durban is performing better and one factor was its equipment. The Port was aware of the faults in Cape Town and was working on it.

On artificial intelligence, this is being considered as well and the internet and connectivity. TPT requires these types of technologies. OEMs will provide equipment and technologies needed. The delay in Cape Town is also due to the weather conditions that other regions are not facing. There are considerations to lease out some RTGs available during the 3rd Quarter of the year. Four RTGs may be deployed to Cape Town to support operations.

Briefing on Growth for Jobs Strategy

Vision

A provincial economy that achieved break-out economic growth, resulting in sufficient employment and opportunity and a sustainable, resilient, diverse and thriving economy – generating confidence, hope and prosperity for all.

Goal: By 2035, the Western Cape will be a R1-trillion inclusive economy in real terms and growing at between 4% and 6% per annum. This will be achieved by enabling a competitive business environment in which businesses exploit opportunities to drive growth.

Seven priority areas:

1. Driving growth opportunities through investment;
2. Stimulating market growth through exports and domestic markets;
3. Energy resilience and transition to Net Zero Carbon;
4. Water security and resilience;
5. Technology and innovation;
6. Infrastructure and connected economy; and
7. Improved access to economic opportunities and employability.

The G4J Strategy embraced the consolidate, capitalise, cluster and connect spatial logic that identified four focus areas for spatial transformation:

• Improving the places where people live.
• Creating more opportunities for people to live in better locations.
• Creating better linkages between places.
• Creating spatially and economically vibrant growth points.

[Please see presentation for more information]

Discussion

Mr America said that the strategy is exciting and can promote economic growth in the province. The time frame is too long. This strategy needs to be expanded to different municipalities and provinces. There needs to be a strategy for unskilled workers.

Mr Mvimbi asked if the strategy can be broken into short-, medium- and long-term goals. Will there be a consultation process? Can the Committee have a workshop to provide its views and output on the strategy?

Mr Sileku asked how the Department is going to address not working in silos in every sphere of government. With the various problems in local government, how is this being addressed as a risk?

The Chairperson said that this is an ambitious plan but much needed. Are KPIs being considered? What engagement has taken place on the different levels?

Ms Bans said that this is a 12-year plan. The strategy is broken down into three time horizons – 2023 to 2026, 2030, and 2035. Targets are necessary to ensure staying on track. If areas of the economy change, there are points to pivot. There were extensive consultations, more than three surveys, 181 engagements, more than 700 unique individuals and more than 2000 people engaged with. There were consultations with different stakeholders, municipalities etc. Silos are difficult to break. HODs in different departments have given input. The implementation plan will be provided in August or September and will provide more information.

The Department said that implementation is crucial and the strategy will find resonance and traction at the local level. The team has gone out and engaged with Municipalities on the strategy.

An engagement plan has been developed. There are local level engagements such as in George, DCF channels and so on. Implementation discussions with the private sector have begun. Some partnerships have formed and there is awareness for the G4J programme. Cape Town is a key strategic partner and there are many engagements with it.

KPIs are being considered to see how they can provide deliverables. Municipalities are viewed as a delivery space. The PFA’s will be taken care of by the organisation. There needs to be an enabling environment to implement the strategy and stable municipalities and services are needed. During engagements, municipalities pointed out the challenges they faced, such as energy, water, etc. However, the top municipalities in South Africa were found in Cape Town; some are ready and stable for the strategy.

Committee Resolutions

• Mr America said that more time needs to be allocated for this strategy to be unpacked further. There needs to be a workshop to understand the strategy.
• The Chairperson said that instead, it would be better to invite the Committee to discuss the implementation plan when it was completed.
• Mr Mvimbi asked if Transnet could provide a written report on the expansion of rail networks from George to Knysna and others. A workshop on the G4J strategy was needed.
• The Chairperson said the Port needed to be visited later in the year to see the projects. Can there be timelines for projects from Transnet? Can there be feedback on shipping routes and more information on loading rates and anchorage? The Green Hydrogen specialists from Transnet will be invited to the Committee.

The meeting was adjourned.