Question NW27 to the Minister of Planning, Monitoring and Evaluation
02 August 2024 - NW27
Maotwe, Ms OMC to ask the Minister of Planning, Monitoring and Evaluation
(1) What has the impact of the World Bank’s involvement been to improve port performance for Transnet as the entity is reportedly the worst in port management in the world; (2) whether the introduction of the World Bank to improve port performance is intended to make a case for privatisation; if not, what is the position in this regard; if so, what are the relevant details?
Reply:
According to the information received from Transnet
(1)
Work done to date: After the initial Container Port Performance Index (CPPI) report was published in 2021, Transnet engaged with the World Bank (WB) to understand the methodology for the ranking. Transnet Port Terminals (TPT) pointed out irregularities in their data – the dataset contained information from four (4) multi-purpose terminals in Durban and only one (1) container terminal. TPT offered to share its data with IHS-Markit to ensure data credibility, however, this offer was refused because the methodology needed to be consistent for all ports. Despite these discussions, it remained difficult to grasp the intricate mix of ship sizes, call sizes, and the various methodologies employed by the World Bank to determine the ranking.
Data Discrepancies: Apart from including Multi-Purpose Terminals in the South African data, not all Shipping lines participated in the information sharing, therefore rendering the sample unrepresentative.
Actions to resolve: In July 2021, Transnet received a World Bank Consultant assessing the container terminals and making recommendations to improve the performance.
- First Visit (November 2021): Transnet hosted the World Bank Consultant at the Durban and Ngqura Container Terminals. A report with recommendations was submitted, and 45 priority actions were identified. Local meetings tracked progress, involving feedback to the Transnet group and TPT Headquarters.
- Second Visit (August 2022): The consultant focused on Cape Town, spending only two days in Durban and Ngqura each. Feedback confirmed progress, leading to a re-prioritized action list. 44% of initiatives – such as planner training were implemented, and 28% were in progress.
Industrial action (November 2022) and severe storms (April 2022 and September 2023) offset some gains from implementing the recommendations. While some small-scale improvements occurred, the World Bank consultant’s recommendation did not significantly impact Transnet’s ranking on the CPPI. Equipment remains the single biggest critical factor in improving vessels' turnaround time.
(2)
Transnet worked with the World Bank to improve its operations, improve ranking and understand the methodology used. It was not intended to enable privatisation. Transnet has a strategy supported by the Freight Logistic Roadmap that promotes crowding in private capital and to reduce the burden on the fiscus.
Transnet is on record indicating its disagreement about using the CPPI as a productivity measure. It is recommended that we acknowledge the World Bank’s efforts but emphasize that substantial gains require investment in necessary equipment, amongst others.
Thank you