Cape Town welcomes Transnet call for private port partners

The City of Cape Town has welcomed Transnet's request for proposals to redevelop and operate the multipurpose terminal at the Port of Cape Town under a 25 year concession.

Transnet is seeking private sector partners to upgrade the multipurpose port terminal. This follows recent requests for proposals to operate the cold storage and liquid bulk terminals.

The RFP, issued on 17 July, covers the terminal's B, C and D berths. The successful bidder will design, finance, construct or refurbish, operate and maintain the facility before transferring it back to TNPA at the end of the concession period. The terminal handles containers, breakbulk, dry bulk and other compatible commodities, but excludes petroleum products, and will continue operating as a common-user facility serving multiple shipping lines and cargo owners.

Bidders must submit a comprehensive business plan and works programme covering proposed capital investment, equipment upgrades, operational improvements and implementation timelines. They will also be required to meet environmental, health and safety requirements, B-BBEE and supplier development obligations, and TNPA's Terminal Operator Performance Standards (TOPS), against which key performance indicators including cargo throughput, productivity, vessel turnaround times, berth occupancy, road and rail efficiency and equipment availability will be measured. Compliance will be assessed quarterly throughout the concession period.

Cape Town Mayor Geordin Hill-Lewis said the move represents a major reform the city has long called for. He stated that a more efficient port could lead to job creating economic growth for the region through greater private sector involvement, with the successful bidder responsible for financing the required capital investment in operations.

Exporters Western Cape has also welcomed the concession. Chair Terry Gale said the organisation has consistently called for improvements in port performance and believes meaningful private sector partnerships are the only way to achieve them. Gale noted that delays at the port disrupt delivery schedules, increase costs and weaken South Africa's competitiveness in global markets, and said Cape Town has long had the potential to be one of Africa's leading container ports, with a more efficient port set to strengthen supply chains and support economic growth.

Research commissioned by the Western Cape government indicated that improving port efficiency could unlock approximately R6 billion in additional exports. The study also suggested the improvements could support nearly 20,000 jobs and generate more than R1.6 billion in additional tax revenue for the provincial economy.

The most recent Container Port Performance Index ranked Cape Town last among 400 container ports worldwide, with Durban ranked 398th in the same index after improving from the previous year, underlining the scale of the challenge facing any incoming operator. Andrew Pike, head of the ports, transport and logistics practice at law firm Bowmans, said greater private-sector participation could help improve operational efficiency and strengthen service delivery, though he cautioned that the success of any concession would depend on effective implementation, regulatory certainty and sustained investment in infrastructure and equipment. Pike noted that Treasury has been putting pressure on Transnet to bring about fundamental reform with the private sector and improve general performance, adding that the process appears to be moving in that direction, albeit slowly.

Economic Growth MMC Alderman James Vos said port performance is a consistent concern for regional businesses, exporters, and investors. He noted that the port currently acts as a constraint on economic growth for agricultural producers, manufacturers, and logistics operators. Vos added that Cape Town should have one of the most efficient ports given its strategic location on one of the world's busiest shipping routes.

The initiative aims to transform the port from a bottleneck into a competitive advantage for trade and investment. The city has been advocating for Transnet to accelerate plans to improve efficiency at the facility.

The concession forms part of Transnet's broader Reinvent for Growth turnaround programme. Group chief executive Michelle Phillips, speaking at a Sapics supply chain conference in Cape Town, said Transnet plans to invest more than R129 billion over the next five years to restore operational sustainability and credibility, with private sector partnerships, equipment renewal and improved operational discipline at the core of the strategy.

Prospective bidders must attend a compulsory briefing session on 6 August before submitting proposals by 20 November.

This follows earlier local coverage of Minister demands urgent Port of Cape Town repairs.

Frequently asked questions

What is the 25-year concession at the Port of Cape Town?

Transnet is seeking a private sector partner to design, finance, construct or refurbish, operate and maintain the multipurpose terminal at berths B, C and D, before transferring it back to the Transnet National Ports Authority at the end of the concession period.

How did Cape Town's port rank in the Container Port Performance Index?

Cape Town ranked last, in 400th position, in the most recent Container Port Performance Index. Durban ranked 398th in the same index after improving from the previous year.

What is Transnet's Reinvent for Growth programme?

Reinvent for Growth is Transnet's broader turnaround programme, under which the entity plans to invest more than R129 billion over the next five years to restore operational sustainability and credibility through private sector partnerships, equipment renewal and improved operational discipline.

What economic benefits could a more efficient Port of Cape Town bring?

Research commissioned by the Western Cape government suggests that improving port efficiency could unlock approximately R6 billion in additional exports, support nearly 20,000 jobs and generate more than R1.6 billion in additional tax revenue for the provincial economy.

What is the deadline for submitting bids for the port concession?

Prospective bidders must attend a compulsory briefing session on 6 August before submitting proposals by 20 November.

Source: polity.org.za, capetownetc.com, freightnews.co.za, primediaplus.com, moneyweb.co.za