Private operator being considered to run container terminal
Increasing port efficiencies
07 October 2021 | Infrastructure
The Namibian Ports Authority (Namport) is looking at a private sector partner to manage its N$4.2 billion container terminal in Walvis Bay.
In a memo dated 4 October and addressed to staff, Namport chief executive Andrew Kanime said that the completion of the new container terminal facility coincided with a general decrease in container volumes handled.
He attributed this decrease to three factors: The expansion of other ports in the region; the deployment of larger size vessels by shipping lines as part of their drive to save on operating costs; and the concentration of volumes by shipping lines at ports with higher productivity and port efficiencies.
Kanime said that the first mode of operation provides shipping lines with additional capacity to directly handle mainliner vessels and their respective countries’ imports and exports volumes, some of which had previously been transhipped through the Port of Walvis Bay.
The second forms part of a drive to save on operating costs resulting in consolidation of volumes for handling at fewer ports that can handle bigger vessels and for subsequent transhipment to smaller ports.
The third was introduced to reduce the turnaround times of vessels in ports and to streamline costs.
Kanime said that the port authority is currently considering to outsource terminal management to a private operator as part of initiatives to increase container volumes handled at the port and to increase the returns accruing from the investment in the terminal.
He explained that private operators have the capacity to develop the volumes of cargo through the terminal.
“Some of them have relationships with shipping lines and the ability to determine the flow of cargo, especially transhipments. Operators also have greater expertise in port operations and the ability to increase efficiencies given their experiences in the running of ports across the world. They also have more financial resources to invest in port equipment and infrastructure, which are all critical in the efficient handling of the large sized vessels.”
The memo indicates that Namport’s board of directors had taken an in-principle decision to consider the concessioning of the container terminal.
“Government, as the shareholder, has decided that more value may be derived for the country if the private operation of the container terminal is combined with the process of seeking an investor for the National Single Window (NSW) and the Walvis Bay Special Economic Zone (SEZ),” it states
The NSW is a trade facilitation tool that allows for the electronic interchange of information amongst all parties involved in customs clearance and related processes, and the digitalization of import and export transactions.
The SEZ is an initiative to develop an industrial estate in Walvis Bay aimed at attracting various industries, through competitive investment incentives and to create economic development and promote employment.
This process is being coordinated by the Namibia Investment Promotion and Development Board and an expression of interest has been issued to the market inviting potential investors to participate in the three project streams, which are jointly named the Walvis Bay Industrial Development Initiative (WIDI).
Terms and conditions
The memo also indicates that the terms and conditions upon which the investors would operate the terminal (alongside the NSW and the SEZ) will be determined at a later stage and ahead of contracting with the selected party or parties.
Kanime emphasised in the memo that every effort will be made to preserve jobs.
“However, the major considerations in such an award would include the value to be derived from such partnership(s) as well as preservation and creation of employment,” he wrote.
He asked that all employees remain positive and lend their support to the process.
“We will update employees on future developments as the process is rolled out.”