21 October 2014
Special Report
Walvis Bay - An African hub in the making

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Special Report

Walvis Bay - An African hub in the making

 

By the Editor*


Walvis Bay: an African logistics hub rising*

 

 

Maersk Drilling has taken delivery of a giant jack-up rig said to be the biggest in the world. XLE-2 set off recently on a 12,000 n.mile journey from the builder’s yard in Singapore to Norway. On the way the rig will pass along the South African coast and will call at Walvis Bay for a crew change and to take on supplies. The rig was built at the Keppel Shipyards as one of three identical oil rigs, which will go to work in the North Sea.


Since Dutch colonialist Jan Van Riebeeck landed in the Cape of Storms to establish a refreshment post for shipping between Europe and the Far East in 1652, South Africa has been regarded as the gateway to sub-Saharan Africa. Ox wagon tracks, followed by rail and road networks into the interior have facilitated this. Even from the 19th century onwards, Cecil John Rhodes envisaged overland transport connections between Cape Town and Cairo to promote global trade with the continent. This used to be one-way trade: Out of Africa.

Independent Sub-Saharan African countries have finally woken up to the fact that they are well positioned to reduce the continent’s exhorbitant transport costs of two-way trading by introducing their own transport shortcuts into and out of the interior strategically positioned for routes to Europe, Asia, North America and the Middle East. Not only will his mean shorter distances, but  also through fewer border posts along the various east-west and north-south, overland transport corridors (see map).

In other words, South Africa with Durban’s expensive port tariffs and its prolonged labour strikes at the bottom of the North South Corridor, stands to lose its historical status as new, major port and overland corridor developments north of the country on both the south-western and south-eastern coast of sub-Saharan Africa are beginning to materialise. On the western coast, these major developments are taking place in Namibia and Angola, while on the eastern coast, Mozambique, Kenya and Tanzania are busy with, or have announced, port and corridor improvements that will also bode well for  their land-locked, neighbouring countries. These include Botswana, Zimbabwe, Zambia, Rwanda, Malawi, Burundi, the DRC and Uganda. 

Some of these projects are now treated as a matter of “urgency” due to the need for resources by primarily three BRICS members, Brazil, India and China.

 



NDP 4

 

Truth is, while SA is still dragging its heels over implementing its National Development Plan (NDP1), Namibia is already following a national development plan it calls NDP4 with a 2017 target date to make the country a state-of-the-art logistics hub for global and interregional trade. This is to be achieved via a container terminal in Walvis Bay and a fuel /ore handling port 5km further north.

NDP4 replaced the NDP3 as part of an overarching strategy to reach its Vision 2030. Unlike the previous three national development plans, NDP4  identified fewer, but more urgent development priorities to leapfrog Namibia to a developed industrialised nation. In addition, government was also going to commission studies aimed at developing a National Logistic Master Plan and a Master Plan on the Development of Regional Urban Centres as part of establishing Walvis Bay, along with the country’s rail and road connections to neighbouring countries,  as a logistics nation. This was to ensure that “by 2017 the volume in cargo handling and rail-transported cargo is double that of 2012 and that the Port of Walvis Bay has become the preferred African west coast port and logistics corridor for southern and central African logistic operations”.

What’s more, the Port of Walvis Bay needed “to be able to accommodate the ocean liner class of container ships and make their turnaround time as short as 24 hours”.

Rail connections to Angola, Botswana and Zambia needed to be completed by 2017, while the Trans-Kalahari Railway would also receive urgent attention.

NPD4  also urged Walvis Bay and other municipalities along the corridor routes to make land available for the  upgrading and development of state-of-the-art storage facilities.

When the NDP4 was introduced in 2012, Trademark Southern Africa (TSA) forecast that the next five years would see huge investments in the expansion of the Port of Walvis Bay.

 




Container terminal

 

TSA was right. Already a conduit for vehicle imports from overseas and SA assemblers, Walvis Bay has been become a ship repair, replenishment, crew change-over and repair station for oil rigs now bypassing Cape Town as well. The existing port at Walvis Bay recently hosted a ceremony to mark the start of construction of the new container terminal on reclaimed land that will see its throughput capacity more than double from the current 355 000 TU pa to 750 000 TU pa by 2017. The project is also expected to increase the port’s bulk and break handling capacity.

The contract to build the new terminal, worth about N$3.38 billion (R3.38-bn) and financed by the African Development Bank (AfDB), was awarded to China Harbour Engineering Company (CHEC) last year. It will see the creation of 40 hectares of land reclaimed from the bay within the Port of Walvis Bay’s current port jurisdiction.

The modern terminal will be linked to the existing port land by a causeway and comprise, inter alia, of quay walls, paved areas, buildings, roads, railway lines, ship-to-shore quay cranes and rubber tyre gantry cranes (RTG’s).

 





SADC Gateway Port

 

The best example of the aforementioned urgency, however, is the construction of Namibia’s new port 5km north of Walvis Bay, which was due to begin in 2016, but is now to start early next year, Namport officials said this month (September).

Already called the Southern African Development Community (SADC) Gateway Port, once completed it will enable several landlocked states to import fuel and export their mineral resources such as coal and copper).

The new gateway port is to feature a $360m oil-tanker jetty, petroleum pipelines and a 75-million litre oil storage facility as part of the first construction phase.

China Harbour Engineering Company (CHEC) and the state-owned Roads Contractor were awarded the tender to build the tanker jetty, which will be able to handle two 60,000 metric tonne deadweight tankers at a time.

The second and third phases of the port, initially scheduled to start in 2020, involve construction of a dry-bulk terminal and a five-berth coal terminal, primarily to cater for 65-million tonnes of projected shipments from Botswana’s Mmamabula coalfields. The new port is also intended to handle increased shipments from the DRC, Zambia and Zimbabwe.

Namibia and Botswana are jointly developing a 1,500km Trans-Kalahari railway to transport coal from eastern Botswana to markets in China and India.

According to Namibia Ports Authority (Namport) CEO Bisey Uirab, the advanced starting date signifies the urgency of the project which had become viable due to growing demand from mining companies for oil and petroleum products. To finance the cost, Namibia has raised its fuel levy on all grades by 10 Namibian cents a litre to 25c, and will increase it further to 40c/l to help finance the tanker berthing and storage facilities, Mines and Energy Minister Isak Katali said recently (August 28).

 

Walvis Bay

 

TSA was right. Ably assisted by the public-private Walvis Bay Corridor Group in its marketing campaign, the Namibia Ports Authority (Namport) was granted a US $338 million sovereign guaranteed loan by the African Development Bank Group (AfDB) to finance the construction of  a “New Port of Walvis Bay Container Terminal Project” in November last year.

AfDB also provided a US $2.3 million grant to the government of Namibia for logistics and capacity building complementing the port project loan.

The project is expected to enable Namport to triple the container-handling capacity at Walvis Bay from 350,000 TEUs to 1,050,000 TEUs per annum. It will also finance the purchase of up-to-date port equipment and the training of pilots and operators for the new terminal.

The grant component will fund the preparation of the National Logistics Master Plan study, technical support and capacity-building for the Walvis Bay Corridor Group and training of freight forwarders with particular emphasis on female staff. 

According to AfDB director of Transport and ICT, Amadou Oumarou, the project will potentially serve up to seven major economies in the SADC region. AfDB would be assisting in the diversification and distribution of port facilities on the southwest coast of Africa, and provide “the much-needed alternative for the region’s landlocked countries.”

He said the project would stimulate the development and upgrade of multimodal transport corridors linking the port to the hinterland while improving the country’s transport and logistics chains.

More importantly, perhaps, it would also boost competition among the ports and transport corridors in the region “with the ripple effect on reductions in transportation costs and increased economic growth”.

The projected project outcomes include improvement in port efficiency and increase in cargo volumes by 70% in 2020 as a result of increased trade in the region. The benefits of the project will include among others, the stimulation of inter-regional trade and regional integration, private sector development, skills transfer and most importantly employment creation, leading to significant economic development and poverty reduction in Namibia, and the SADC region.

A new regional trade route reaching from the Katanga Province in the Congo all the way to Walvis Bay as point of entry, is on the radar of the Walvis Bay Corridor Group following an agreement between Namibia and the DRC.

The Namibian Economist reports that development  of this major link started its first tentative steps recently when the Corridor Group opened an office in Lubumbashi, on the border of the DRC and Zambia, to create a strong business presence in the mineral-rich Katanga Province. The office in Lubumbashi, DRC is now the third branch office of the WBCG beyond Namibia, with the other branch offices in Lusaka, Zambia since 2005 and Johannesburg, South Africa in operation since 2008.

 

 The NDP4 also envisages the attainment of 4 percent real growth in the agriculture sector by 2017, along with a boosted manufacturing output capacity which will contribute 50 percent to the gross domestic product and a 10 percent reduction in the unemployment rate.

The ultimate aim is to distribute the proceeds of the country’s N$82 billion economy to the population of only 2 million. Hence the goal was to start achieving an average economic growth rate of 6 percent every year from 2017 going forward.

By then there should be 90 000 job opportunities created and a significant reduction in the income inequality gap, according to the authors of the plan.

The plan has specific outcomes, of which logistics is a crucial one.

“To make Namibia a logistics nation, government would continue to pursue various international and bilateral agreements in setting up one-stop border posts to ensure the flow of cross-border trade is as efficient as possible,” reads the NDP4 document.

The National Logistic Master Plan will be aligned to the Transport Master Plan to provide a detailed image of Namibia as an international logistics hub.

Last month, Ida Ndjarakana from the National Planning Commission said that the NDP4 identified the logistics industry as one of the economic priorities, an area in which Namibia is said to have a clear comparative advantage and thus a need was identified for the "logistics hub for Southern Africa".

She made these remarks during the information session on Namibia as a logistics hub concept at Oshakati late in August.

A representative from the Ministry of Works and Transport, Leena Endjala, said that the ministry intended to embrace all modes of transport in order to mitigate the challenges of high traffic congestion and improve the roads infrastructure.

"We are having a high challenge of sea ports at the moment. We want people to start making use of sea ports by using ships when traveling to other countries in future because we want to embrace all modes of transport soon," said Endjala.

The intended logistics hub is estimated to cost the government about N$45 billion. Endjala said that the money was not yet available and thus the ministry was encouraging all the private entities to invest towards the realisation of the hub.

Clive Smith, a representative from Walvis Bay Corridor Group, said the hub will be beneficial in many ways such as high safety and security, reduce reliance on South African imports and attract industries to the region.


* This article was written for the October edition of African Cargo News (Nigeria). Copyright: TNT News Services/Prestige Media Publications

 

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