JThe Namibia Ports Authority (Namport) has selected Swiss-based container terminal operator Terminal Investment Limited (TIL) as the preferred bidder to manage the new N$4 billion container terminal.
TIL’s majority shareholder is Mediterranean Shipping Company, owned by the Italian Aponte family, which is the world’s largest shipping company by container capacity.
Friday’s announcement follows an in-principle decision to concession the container terminal and issue a request for proposals in April this year to five applicants who responded to an expression of interest issued by the Namibian Board of investment promotion and development last year.
Namport CEO Andrew Kanime explained that this RFP closed on July 29 and two bids were received from all five applicants. An extensive evaluation process of these bids culminated in the approval of TIL as the preferred bidder.
TIL has interests in more than 60 terminals in 31 countries on five continents and handles at least 60 million container units each year. The Namibian understands that the company operates two ports in West Africa and that South Africa is pursuing a process similar to that of Namibia to acquire the services of TIL to manage its port of Durban, among others.
“We are pleased with the business case offered by TIL and are confident that it is aligned with the fundamental objectives we have set for the concession of the new container terminal,” Kanime said. “If anything, they eventually exceeded our expectations.”
He explained that the next step in the process will be to start negotiations between Namport and TIL on the concession agreement, focusing on detailed operational issues, including the exact terms of the personnel to be taken over by the operator.
Kanime says this will culminate in the signing of the concession agreement and the transfer of cargo handling operations to the concessionaire, possibly by the first quarter of 2023.
One of the main reasons for introducing a private operator was the need to increase container throughput and transshipment volumes through the port of Walvis Bay.
While the container handling capacity of the new terminal (which was inaugurated in 2019) has increased Namport’s overall container handling capacity by 750,000 units per year, only around 168,750 units per year have been handled to date. , which is a very low capacity utilization of 23%.
Kanime explained that it is essential that this asset is used correctly to obtain a good return on investment.
“Unfortunately, local import and export volumes are restrictively low given Namibia’s small captive market,” Kanime noted, adding that an independent operator can drive volume growth, especially for the flow of goods. versatile transhipment business that can be a “game changer” for Namport. volumes.
The operator will also be able to maximize capital investment, improving its operational efficiency, a key factor in attracting new business volumes to the new container terminal. This investment will include widening and deepening the channel to accommodate larger vessels.
Job preservation was also a key consideration, and according to Kanime, the container terminal utilization level at just 23% “is not good for business and poses a real threat to employment levels.” given the very small margin of safety”.
“Any decrease in current volumes can have serious negative consequences for the overall business case for the new container terminal, hence the need to mitigate this risk by targeting growth in sufficient business volumes to deliver healthy margins. and secure employment,” he said.
Kanime concluded that all objectives for the concession exercise will be consolidated into the concession agreement with penalties set for failure to meet set and agreed performance and volume targets.
“We are confident that the concession of the new container terminal puts us on the right track to achieve our ultimate goal of generating the best value for our shareholders and being the best performing seaport in Africa,” he said. he concluded.
This decision increased the handling capacity of the Port of Walvis Bay from 350,000 twenty-foot equivalent units (TEUs) to 750,000 TEUs per year.
Groundbreaking for the new container terminal took place in May 2014. Construction began in mid-2014 and was completed in August 2019.
Prior to the expansion, the Port of Walvis Bay handled approximately 3,000 ships and five million tonnes of cargo per year. It handles container imports, exports, transshipments, and bulk and bulk cargo transportation of various commodities.
Built on 40 hectares of land reclaimed from the ocean in a nearly $300 million project, the expansion has led Walvis Bay to become a logistics hub for southern Africa that aims to meet the growing demand for freight, while promoting new maritime access to serve the landlocked countries of the Southern African Development Community (SADC). The African Development Bank granted a loan of 2,982 million rand representing more than 70% of the financing of the project.
The work included the dredging of over 3.9 million cubic meters of sand, used in part for backfilling, the construction of a 600 meter quay wall, the laying of 304,000 square meters of paved surface and the construction a workshop and administrative buildings. It also involved the installation of four ship-to-shore cranes (STS), the construction of a one-kilometre road, the laying of 2.3 km of railway tracks and the installation of feeder networks. The facility’s power supply was also successfully upgraded.
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