EXPANSION PLANS FOR THE PORT OF DURBAN: WHAT ARE THE ISSUES FOR THE CITY OF DURBAN?

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1 EXPANSION PLANS FOR THE PORT OF DURBAN: WHAT ARE THE ISSUES FOR THE CITY OF DURBAN? by A.A. Mather 1 and K. Reddy 2 ABSTRACT The development and operations of the Port of Durban and City of Durban have been and will remain interconnected at many levels. It was during the 1840s that Natal became a British Colony but it was soon obvious that the British Government had hopes that the fledgling colony would stand on its own feet by becoming the gateway for various products to flow both in and out of the Port Natal harbour. In the mid 1850 s development of the port entrance channel began. Up to about 1901, an entrance level of approximately 5.5m was maintained. Starting in 1903 through to 1939 the depth at the entrance was progressively deepened up to its present day depth of 13 m. A contract to deepen to a depth of 18m has recently commenced. With the deepened harbour came larger ships and as the economy grew these increased in numbers. Development and planning of the Port and City continued in isolation of each other. This situation came to a head in 2005 when both role-players realised that a common vision for the sustainable expansion of the Port and City was needed. Over the years both parties had prepared separate plans of their respective areas of jurisdiction. Transnet had prepared a draft masterplan for the Port of Durban. The plan indicates future spatial port development requirements to meet the objectives of Transnet. The masterplan was focussed on providing a development plan, within the existing Port of Durban, to increase the capacity of containers from 2.7 million to 8 million Tenfoot Equivalent Units (TEU s). The objectives of the two organisations are very different and understandably this plan was in conflict with the City s plans. The need for joint planning became clearly essential as this would provide for coordinated future growth and ensure their successful co-existence in an increasingly competitive global environment. Both parties agreed to implement a joint planning initiative, using the current planning work undertaken in each organisation as a basis, to formulate a joint plan for the City and Transnet. This planning process called The Transnet ethekwini Municipality Planning Intiative (TEMPI) commenced in 2006 and involved key sectors in both organisations.the TEMPI process resulted in suggested changes to the original port master plan produced by the port authorities. The proposed port expansion is now estimated at R60 billion (US$10 billion) and will provide additional port capacity until 2025 enabling Durban to retain its position as South Africa premier port and one of the largest port in the Southern Hemisphere. Two viable areas of port expansion emerged, the Bayhead digout which will provide 2.5 million TEU s the digout port on the Durban International Airport site which will provide 3 million TEU s, a new strategic petrol and oil storage facility and a direct export berth for Toyota. The largest change was the inclusion of the existing Durban International Airport site as a possible dig out port because of the relocation of the airport to the King Shaka International Airport site north of the city. Other proposed changes included a new car terminal site, review of port usage in the point, bayhead dig out access route and the Maydon wharf extension that will be discussed. Environmental issues arising from the proposals have been a major component of the expansion debate that seeks to achieve a balance between these concerns and economic and social issues. There is difficulty in supporting additional development in the Port of Durban given that it is located in the Bay of Natal, a functioning estuary that has three major rivers flowing into it. The bay provides a range of free environmental goods and services to the citizens of Durban. Substantial modifications have occurred within the Bay over the years and only a very small percentage of the range of habitats it had previously survives. The expansion proposals require the dredging of a widened navigation channel within the bay to allow post-panamax vessels to enter. The areas identified for dredging are the last remaining sections of the sand banks, which typifies the Bay s environment at low tide. This has resulted in strong calls, from environmental scientists not to reduce the natural functioning of the 1 Mr, Pr. Eng., Project Executive: Coastal Policy, ethekwini Municipality. mathera@durban.gov.za. 2 Mr, Pr. Eng., General Manager, Transnet. Krishna.Reddy2@transnet.co.za. 1

2 Bay any further as this would likely lead to the ecological collapse of the estuarine system and the subsequent loss of the associated environmental goods and services. Equally important is that economic growth in the region has been strong in the last decade and this has resulted in strong demand for imported goods into the region, a trend expected to continue into the future. Demand for employment, given high unemployment rates has seen the demand for labour intensive activities around the port including shipbuilding and repairs being promoted by the city. Durban is the key port for Johannesburg, the industrial and commercial heartland of the country and its role is entwined into the national economy. This increasing demand has seen the spare capacity in the Port of Durban rapidly used up and at present, demand exceeds supply. This has resulted in the reallocation of containers to other ports and has lead to an increase in transportation costs of these goods. This is in contradiction to the stated objective of Transnet to reduce the costs of transporting goods through our port and rail systems. The need for the city and country to grow, remain competitive, and develop economically is not up for debate. The process in which development will be authorised has commenced with an Environmental Impact Assessment process in which all these issues will be debated and traded off. 1. INTRODUCTION The Port of Durban, which is the busiest in the African Continent, is located in the Bay of Natal, on the east coast of South Africa. The Port is surrounded on all frontages by the sprawling City of Durban, which forms part of the ethekwini Municpality, which is one of South Africa s fastest growing regional economies. Over the past ten years both the Port and City have experienced phenomenal growth. The City s growth has been based on high levels of urbanisation and growth in the light industrial, manufacturing and tourism industries. This growth has provided challenges for the City in dealing with issues of basic services for the rapid population growth, traffic congestion and scarcity of suitable industrial land close to the Port. Figure 1: Location of the Port of Durban The Port of Durban on the other hand has always been South Africa s premier Port. The primary role of the Port is two fold; apart from the key role it plays in supporting the regional economy of Durban through the diverse port facilities it offers, it is also the international gateway for the Gauteng region, which is the main economic hub of the South African economy. Figure 2 indicates the Port of Durban s ideal location to service Johannesburg located 600kms inland. The high levels of sustained international trade between South Africa and its main trading partners of Europe, North America and South East Asia has resulted in unprecidented growth in the volume of cargo moving through the Port of Durban. This has placed extreme pressure on the cargo handling capacity in the Port, which has undergone various forms of ongoing upgrades and expansions over the past ten years to cope with the increase in demand. Projected cargo demand forecast indicate that the present growth being experienced will be sustained in the medium term and will require significant expansions in the Port. The location of the Port of Durban at the tip of Africa is also ideally suited to take advantage of the growing maritime trade between the growing economies of South America and South East Asia as illustarted in Figure 3. The resultant growing spatial requirements, operational densification and social and envorionmental challenges facing both the Port and City in its desire to grow, provides a complex set of issues and interdependencies in determing how the Port and City can achieve their growth objectives in a manner which will be mutually beneficial and sustainable. Figure 2: SA port network Figure 3: Global shipping routes 2

3 2. THE CURRENT PORT LAYOUT. The current layout of the Port of Durban has been driven by various factors over the last century not least has been the changing ship sizes and other technological innovations in the maritime sector. As ship sizes increase, it brought new requirements for navigation and berthing and this has played itself out within the port with regular port redevelopment to accommodate these changes. At present Durban is unable to handle post panamax vessels and to retain its status as a hub port in the Southern African context, the Port has commenced construction of a widened and deepened entrance channel which will be completed in 2010 and will cost approximately R2.7 billion (US$ 300 million). Figure 4: Current Port layout. The Port, historically being a major logistics hub for the Durban regional economy, provides a diverse range of Port facilities. The Port has clearly demarcated precincts providing specialised facilities for the handling of break bulk, dry bulk, liquid bulk, motor vehicles and containers. The Port currently contains the largest container terminal, car terminal and liquid bulk (petro-chemical) facilities in South Africa. These facilities play a significant role in servicing the hinterland of South Africa. 3. PORT OF DURBAN MASTERPLAN (2005) In 2005, the National Ports Authority of South Africa prepared a masterplan for the Port of Durban, which defined and confirmed the future role of the Port, proposed development plans for the Port to meet its role, and the projected cargo demand forecast for the Port up to The masterplan confirmed the Port of Durban s premier status in the South African Port system and as the main Port in servicing the hinterland of South Africa. In terms of this role, the Port was required to handle a phenomenal growth in containers, motor vehicles, and liquid fuels. To provide for this growth, the masterplan reviewed operational efficiency improvements and spatial expansions to provide the necessary capacity up to 2025 when it was anticipated that the Port would reach its ultimate capacity. Figure 5 below illustrates the proposed future layout of the Port, which identifies two significant expansion proposals mainly to cater for additional container capacity. The first is an infill in the bay between Pier One and the naval base at Salisbury Island, to provide an additional 1.2 million s container capacity, and secondly a dig out basin in the Bayhead area of the Port to accommodate a new container terminal with a 6 million capacity. The Bayhead expansion will expand the Port into 3

4 currently underutilised rail staging and shunting yards, but would also reduce the ship repair and building precinct in the Port. Also reflected in the future layout is the widened and deepened entrance channel currently under construction. Figure 5: Port of Durban Masterplan. Figure 6 below gives a representation of the phasing of the container developments to meet demand up to The scale of the future development plans for the Port had obvious social, economic and environmental implications for the City. When the masterplan was presented to the ethekwini Municipality, the City raised various concerns with regards the impact of the plans on the City. The City s main concerns were fourfold. These were the ecological impacts of the expansion on the Bay, the ability of the City s road infrastructure to deal with the additional road traffic generated by port developments, the negative social and economic impacts of the reduction of the ship repair and building industry in the Port, and the enhanced conflict of Port and City land uses in the Point precinct of the Port. These main areas of conflict were understandable considering the differing planning objectives of the Port Authority versus the City. While the Port Authorities objective is aimed at running a complementary national port system and reducing transport logistic costs at a national level, the focus of the City was maintaining a balance of social, environmental, and economic issues at a regional level. The conflicting objectives of the Port Authority and City came to a head when both role-players realised that a common vision for the sustainable expansion of the Port and City was needed. The need for joint planning became essential, as this would provide for future growth and ensuring their successful co-existence in an increasingly competitive global environment. The both partied therefore agreed to implement a joint planning initiative, using the current planning work undertaken in each organisation as a basis, to formulate a joint plan for the City and the Port. This planning process was named the Transnet ethekwini Municipality Planning Initiative (TEMPI) which commenced in 2006 and involved key sectors in both organisations. 4

5 Port Container Handling Capacity 12,000,000 Salisbury Island ,000, Container Moves (TEU's/annum) 8,000,000 6,000,000 4,000, Bayhead Container Terminal PH2 Bayhead Container Terminal PH1 Pier 1 2,000,000 Durban Container Terminal Year 4. TEMPI PROCESS Figure 6: Proposed container capacity growth programme. This process was structured to allow both organisations an opportunity to understand and appreciate each others objectives and goals and to allow some space to come together and provide a framework to inform independent decision-making, based on a shared vision and understanding of the future development requirements of the Port and the City. MATHER, REDMAN and AKKIAH (2006). A joint team representing Transnet and the Municipality was established and with a team of specialists split up into five work streams, which was to form the basis of creating a joint vision (Figure 7). 5

6 City Manager Tempi Project Team GM Transnet Capital Projects Transnet-eThekwini Port Planning Forum Port/City Forum City Team City Project Director Adrian Peters Transnet Project Director Krish Reddy Port/City Forum Port Team City Co-ordinator Andrew Mather Transnet Co-ordinator Dave Stromberg Project Manager/ Integration Facilitation Team Economic Environment Port Engineering Transport Point/Precincts Planning Figure 7: TEMPI organisational structure. The TEMPI process allowed the Port Authority to appreciate the impact Port expansion will have on the City and for the City to appreciate the necessary land use and infrastructure planning required to support the port expansion. The process yielded a vision which for the first time took into account the different port frontages and their respective roles in city and port development. Four main frontages were identified as follows: 4.1 Point/City frontage This area consists of the oldest areas of the Port where the Port Authority made significant investments over the past few years to create modern multi purpose cargo and motor vehicle handling facilities. These new facilities in the Port are adjacent to one of the City s flagship urban regeneration projects, the Point Waterfront Development, consisting of commercial, recreational, and upmarket residential developments. While the current types of cargoes handled in the Port in this precinct is compatible to the surrounding city land use, all traffic flow both rail and articulated road vehicles enter this area along the Victoria embankment, one of the most congested streets in the Durban Metropolitan Area. Conflicts with passenger vehicles are already occurring and will be discussed later in the paper. In the interim, the plan is to continue with constrained cargo handling activities in this precinct, with the longer term vision for this area over time, to be transformed to a city-port frontage, and provide an extension to the central business district and adjacent Point redevelopment area. The success of this longer-term vision is based on the ability for the Port to expand and thus provide opportunity to create alternative capacity for cargoes currently being handled in this precinct. 4.2 Maydon Wharf frontage This area, which currently is used for break-bulk and dry bulk cargo handling, requires a substantial upgrade. The Port Authority has initiated a redevelopment program in conjunction with the City which will include the rationalization of road and rail infrastructure within and servicing the precinct, the relocation of non port related activities out of the precinct, the provision of new berths, and the rationalisation of current property and service lease agreements. 6

7 Figure 8: Maydon Wharf redevelopment 4.3 Bayhead frontage This area is by far the most underutilised area within the Port of Durban and presents the biggest opportunity to increase the ports handling capacity. The old railway marshalling yards and associated servicing facilities adjacent to the Port are currently under utilised and have become the focal area for much of Durban s warehousing and back of port logistics activities. The lack of planning and coordination of the transformation of land uses in this area over time has resulted in a very inefficient utilization of the area. The rationalisation and part relocation of rail infrastructure from this precinct provides the opportunity to convert this precinct into a premier post-panamax container terminal to meet the expansion requirements of the Port shown in Figure 9. Figure 9: Bayhead redevelopment proposal 7

8 4.4 Bluff frontage The area immediately below the Bluff will be reconfigured and would remain as a port-port area principally serving the petrochemical industries. 4.5 Conclusion of TEMPI process The TEMPI process was unable to provide an agreed future spatial layout of the port as originally envisaged with the main point of uncertainity being the best navigational route to access the Bayhead precinct. The Port and City authorties did however agree on certain key principles which will inform the process going forward:- The port needs to expand in a sustainable manner in the interests of the city and the country. Expansion is required to retain the port s premier status in the country and is fundamental to sustain and drive the economic development of the region. Capacity should be provided ahead of demand to avoid congestion and deterioating service levels Expansion should provide capacity for Containers has a priority cargo, however the Port should retain its diversity in support of the regional economy. The way in which expansion occurs its physical layout is to be an outcome of an Environmental Impact Assessment (EIA) process which in South Africa is a regulatory requirements for the expansion Economic, social and environmental dimensions will form part of the EIA process Commence with the EIA to arrive at a preferred spatial layout. The Port and City continue working together in the already established forum to implement other development plans not affected by the EIA process. Negotiations should be initiated to secure first option on the current Durban International Airport land for future port expansion. TODES (2007). 5. THE ISSUES FOR THE CITY OF DURBAN. The issues for the City of Durban can be condensed into four key areas, namely traffic and transportation, environmental, social and economic issues. 5.1 Traffic capacity and related road/rail infrastructure. In terms of the current cargoes handled in the Port and in the proposed Port expansions, containers are, and will remain the main contributor to traffic on the inland transport network. Of all import and export containers handled in the Port, approximately 60% of containers are destined for Gauteng, with the remaining 40% destined to go into the Durban region. From an economic perspective, it is only the containers destined for Gauteng that provide an opportunity to utilise rail in their transportation. Currently, the rail: road modal split is 20%: 80% on this transport link. This provides traffic and transportation challenges at two levels, at a local level; traffic capacity and circulation in and around the Port, and at a national level; capacity of the road transportation corridor between Durban and Gauteng. The challenges at a local level can be separated into two focus areas. The southern area of the Port where the container terminals and petrochemical precinct are located, and the northern area (Point & Victoria Embankment) which is the location of the Car Terminal and Multi Purpose Terminal which is immediately adjacent to the Central Business District (CBD) of Durban. Bayhead Road, which provides the only access to the Southern area of the Port, is already seriously congested with heavy road vehicles destined for the container terminal periodically staged on the road and thus blocks off through traffic to passenger motor vehicles attempting to gain access to the Bluff residential area. The main problem is the misalignment of the operating hours of the terminal versus cargo owners. While the terminal has a 24/7 operation, most road hauliers call at the terminal between 8am and 6pm, Monday to Friday, causing major congestion on the city road network. Various initiatives are currently in progress to manage the arrival pattern of vehicles to the terminal and to increase the traffic capacity to this part of the Port. Capacity development plans include the construction of Khangela Bridge to provide a more direct access to the Port from the national road and the planning of a second strategic access, the Edwin Swales Bayhead Road Link. Access to the northern area of the Port servicing the Car Terminal and Multi-Purpose Terminal is mainly via Victoria Embankment and Point Road, Victoria Embankment is one of the busiest roads in 8

9 the Durban CBD, while Point Road is also the main access road to the Point Waterfront Development. The increase in background traffic of the City and additional traffic generated by the Point Waterfront Development provides major restrictions to Port operations in this area of the Port. Alternative land transport via rail is also constrained by conflict of rail operations with recreational, commercial and residential developments along the Victoria Embankment. This constraint on inland transport capacity to the Port has proved a major challenge in expanding the car terminal to accommodate the export program of Toyota. Toyota is the only car manufacturer located in Durban and a major contributor to the regional economy of Durban. Current road traffic volumes indicate that Toyota are unable to achieve the service levels required in the road transportation of export and import vehicles from their manufacturing plant approximately 30km south of the Port to the car terminal. This has necessitated the development of a rail shuttle solution between the car terminal and the manufacturing plant, which will include very intensive operational management between the Port and City Authorities on the movement of trains along the Victoria Embankment. The ongoing operation of the Port in the Point will require very close working between the City and Port Authorities as the City s regeneration project in the Point takes off. The Port of Durban s premier status is dependent on it retaining its role as the gateway to Gauteng. This role and status is critical in the Port underpinning the growth of the regional economy of Durban. The Port of Durban s role in servicing Gauteng is not solely dependent on the Port s ability to expand and provide adequate capacity for cargo handling, but revolves around the ability of the Durban- Gauteng logistic corridor being more competitive than other Gauteng-coastal logistic corridors developing in the country. The Richards Bay-Gauteng and Coega Gauteng corridors are fast developing with a number of port, rail and road infrastructure investments being made on these corridors. The efficiency and cost competitiveness of the transportation link between Durban and Gauteng is therefore of vital importance. For example, the current average container vessel waiting time at the Port of Durban is 36 hours, and a further 3 to 4 days from the time the container is discharged to when it reaches its final destination in Gauteng. These service times need to be drastically improved for the corridor to retain its competitiveness. This can be achieved by ensuring there is adequate capacity within the Port, both from a marine service and terminal operations perspective, but also by providing integrated inland transport logistic solutions. The movement of containers via 50 truck block trains from the Port Container Terminals directly to strategically located and efficiently operated inland terminals, where road carriers then distribute containers to its final destination, provides the greatest opportunity to improve the competiveness on the corridor. Various initiatives are currently in progress to maximize the benefits of this solution. Traffic issues were also high up on local residents and stakeholder s agendas and they have already been very vocal about the congestion they experience on a day-to-day basis. The city believes that the future of the city has to be built around transport logistics and other forms of connectivity. 5.2 Environmental impacts Over the years, the Bay of Natal has seen large changes (Figure 10) in the natural environment so that now only: 43% of the original bay area remains, 4% of the original shoreline remains, 14 % of the original sand banks and tidal flats is left and 3% of the mangroves remain. With this in mind, the proposal to reduce these assets even further has drawn criticism from environmental scientists. To understand the issues it is important to understand the various environmental roles the Bay of Durban plays at the municipal, provincial, national and international levels. Within the municipal and provincial context, the bay plays a role in waste assimilation particularly when the existing sewerage systems are compromised during rainfall events and power failures. This is important as Durban has it s major tourist swimming beaches located north of the bay. The ability of the system to deal naturally with pathogens and viral diseases effectively is based on the size and structure of the system. The large water expanse, the inter-tidal and sub tidal sand banks create a pleasing and desirable landscape character, which is sort after by residents and has resulted in higher property prices and rental with a benefit in rates income for the city. The sand banks provide for subsistence bait collection and food production. The open water areas and public fringe also provided for recreation and leisure activities for residents of the city. 9

10 Figure 10: Changes to Durban bay between the 1800 s and As far as National roles, the bay provides a safety net for other estuaries particularly given the limit duplicity of our estuarine system in the region. The bay provides a nursery for juvenile fish, which restock adjoining estuaries when required, and a regional important refuge for birds. This was a strong point put forward that Sixty five estuaries and their associated economies are linked to the welfare of Durban Bay. The coastal towns - from Thukela to Port Edward - are all tied to the quality of their estuaries by a sense of place, residents quality of life, property values and associated rates, tourist perceptions, fishing quality and estuary recreation It is linked to the other estuaries in this region by virtue of the coastal water movements driven by wave action, the Natal Gyre and the Agulhas current and, despite major reduction in total area, still constitutes some 60% of the total estuarine habitat on this stretch of coast. It has the widest variety of estuarine habitats in the region and supports a disproportionately much higher proportion, arguably as much as 80% of the total estuarine biodiversity and biomass in the region. The abundance of the sand prawn or cracker is arguably also several orders of magnitude greater than in any other estuary in the region. This diverse and still abundant invertebrate fauna is capable of providing a source of planktonic larvae, which act as dispersal phases in the life cycles, and therefore has the capacity to supply recruits to these other less stable systems. MANDER (2007). The Bay provides a habitat for a variety of reef associated marine fish as well as a critical life cycle component for those migratory marine species, which spawn at sea but utilise estuaries as nursery grounds. This latter aspect is enhanced by the size of the Bay, its sheltered nature in comparison with the local marine environment, its general physical and chemical stability and critically by the variety of habitats with their associated faunas, which still survive. These factors combined would, as mentioned above, confer a disproportionately greater significance on the Bay than might be suggested solely by its contribution of 60% of the total estuarine area in the region. As was the case with the invertebrates, it is again quite reasonable to assume that the Bay supports 70-75% of the total estuarine fish biomass and biodiversity in the region. The bay is still a key habitat for local water associated and migratory wading birds. Its role and significance in inshore coastal and estuarine biological processes is indisputable Due to the key role the Bay plays in regional ecological processes, the Bay is a keystone provincial habitat. It is critical natural capital, which cannot be replaced at any cost. The scarcity of the services supplied by this single asset implies that the value nears infinity. MANDER (2007). The bay is convenient located near the University and provides an important laboratory for a significant amount of research, understanding of our natural system and knowledge creation in the region. The bay also plays a role in landscape conservation, as required by national legislation, particularly the types found in the bay. Many school learners have benefited from the education visits to this area. The international role of the bay is focused around the International conventions, which protects the migratory species, which come to Durban Bay and rest out the European winter in our waters. 10

11 The environmental impacts are centred on the possible changes to the last remaining inter tidal and sub tidal sandbanks within the harbour and the mangrove area which is a natural heritage site. The proposal to site the new container expansion on the Bayhead land brings with it the complication that the largest ships the port is able to handle must now navigate to the most extreme end of the port. For this to be possible, the route needs to be widened and deepen to accommodate these vessels. This led to closer investigations into possible access routes to this area as shown in Figure 11 below. Figure 11: Possible navigation routes to Bayhead. These three routes were investigated from a feasibility point of view and in the process, the central route through the sandbanks was discarded because of the severe negative impacts this would cause to the complex and sensitive ecosystem. This left two remaining options namely the Northern and Southern channel routes, which are discussed below Northern Channel This entails approaching from the north side of the Port and because of the larger ships to handled. This would require the navigation channel to be widened to accommodate these ships. This widening is proposed to occur to the south side and into the existing sandbanks. The reduction of shallow water habitat (and subsequent increase in deep-water habitat, which is less productive) will affect the natural system adversely. These changes are seen by the environmental sector as significant enough to start a escalate the downward spiral in the health of the system and result ultimately in the collapse and complete loss of environmental goods and services the bay currently freely enjoyed the residents of Durban Southern Channel The southern channel, while on one-hand addresses the concerns about the removal of the sand banks, is not without its environmental issues. The length of the proposed approach will require a turning area in mid channel that will require cutting into the natural heritage site, which protects the last remaining mangroves in the bay. Both remaining options have potentially negative environmental consequences and therefore the applicant will be required to undertake additional work to ascertain the extent of possible impacts on the environment. Entering into an Environmental Impact Assessment (EIA) process requires the 11

12 applicant to consider all options and all locations for expansion of port infrastructure. This requirement will compel Transnet to consider the feasibility and desirability of container expansion on the Durban International Airport site as well as at Richards Bay given its location relative to the Gauteng region. The process is yet to start and there is no doubt that the process will be a difficult and trying time for all parties. 5.3 Social impacts The busy port and its transportation systems are cheek to jowl with large residential areas and this co-existence has not been without its problems in the past. The port is operating 24 hours a day, which has associated impacts on adjoining land. Historical planning has a legacy, which continues to cause conflict with adjoining landowners and occupants. Large residential areas (i.e. Bluff) are located on higher ground with magnificent inland vistas overlooking the busy port. Residents continually complain about the operational issues, which emanate from the port. Vehicle congestion is most often raised and this been dealt with above in section 5.1. Residents complain about the amount of noise and light pollution they experience on a day-to-day basis. Air pollution while relatively minor from the port is a major issue in the area as a result again of poor historical planning in the area. This has created health problems for residents and not surprisingly, residents are very vocal about any increases to the current pollution levels that development might bring. Old historical residential areas located in the basin adjacent to the port (i.e. Clairwood) are slowly being transformed from residential accommodation to informal businesses serving the port. This has resulted in increased traffic as well as articulated vehicles using the existing residential roads, which were not designed to handle this traffic. The city is continually repairing the damaged roadways in this area and it would seem that there is a need to re-examine the land use in Clairwood, particularly given the need for additional logistics and backup areas that will be required in the expanded Port of Durban. The lack of job opportunities is a major issue in the region with the high levels of unemployment and perhaps a complete rethink in the way this area is structured and configured will go some way of addressing these issues. 5.4 Economic impacts South Africa suffers with high levels of unemployment and the country is constantly looking at ways to promote and grow the number of job opportunities. Highly intensive labour based industries provide and ideal opportunity to create a large number of jobs. In terms of the proposed expansion, the city is particularly interested in the potential growth in the job market and its multipliers into the local and regional economy. These potential job opportunities are examined in terms of ships calls, ship repairs and container handling Employment created by ships calls Specific employment levels are always difficult to allocate across such a diversity of activities, but a very rough estimate would peg port-ancillary employment at about 40,000 jobs in service providers directly dependent upon the port, or supporting these direct port players. This constitutes approximately 4.5% of the total ethekwini regional workforce. Figure 12 below, shows the major categories of expenditure by a typical container vessel working 950 boxes in a single 2-day call at the main container terminal of the Port of Durban (these are early 2006 tariff levels but excludes cargo dues). Data were drawn principally from the disbursement accounts of ships agents, from detailed bunker data, from quite detailed discussions with the clearing & forwarding fraternity, and from discussions with ship chandlers and the repair industry. Rail and container support (depots, logistics, etc) estimates are less robust and have been extrapolated from a comparable 1995 study. Item/Service Expenditure R % total NPA marine infrastructure & services 1 135, SAPO Terminal charges 675, Stevedoring & Tallying 2 13, Ships Agency 33, Ship Chandlers 45, Clearing & Forwarding 616, Container depots, logistics etc 125, Road haulage 3 430, Rail charges 3 100,

13 Ship repair services 77, Bunkers & fuel 772, TOTAL EXPENDITURE PER CALL 2,941, Fig 12 - Profile of container vessel spending, 2006 tariff levels Notes: 1 The category of cargo dues, payable by cargo owners to the NPA has been excluded from these spending profiles. This charge is raised to finance the cargo-working infrastructure of the ports (replacing the old Ad Valorem Wharfage charge), but associated revenue has historically not been retained by the individual port communities in question. NPA charges are consequently limited to those to relate to tangible activities conducted on the land or on the water in the Durban port area. 2 Container carrying lines pay an all-in terminal charge that include stevedoring, with the latter in turn offering their services to SAPO. For the purposes of this exercise, these charges have been unbundled to separate out the (small) stevedoring component. 3 Based on a 70%/30% road/rail split of cargo distribution and 35%/65% split of container volumes across Durban/non- Durban cargo owners. Local cartage activities and 20% of Durban-inland transport is assumed to be controlled by service providers in the ethekwini metropole. A typical breakbulk caller consequently generates less expenditure than a typical container ship, occupies berth space for longer (on average five days as opposed to two), but is still responsible for major additional expenditure, notably for such labour-intensive recipients as private stevedores and road haulage enterprises (Figure 13). The loss of multi-purpose and/or breakbulk cargo-handling activity from the Port of Durban would consequently deprive the wider port community of substantial job and expenditure benefits. Item/Service Expenditure % total R NPA marine infrastructure & services 1 99, DoT SAMSA 4, Terminal charges Private leasehold 42, (Terminal charges if SAPO) (150,000) (8.1) Stevedoring, Tallying & cleaning 2 96, Ships Agency 13, Ship Chandlers 45, Clearing & Forwarding 78, Road haulage 525, Ship repair services 77, Bunkers & fuel 772, TOTAL EXPENDITURE PER CALL at Private/Leasehold Terminal 1,752, TOTAL EXPENDITURE PER CALL at SAPO Breakbulk Terminal 1,860, Fig 13 - Profile of typical multi-purpose/breakbulk vessel spending, 2006 tariff levels Notes: 1 The category of cargo dues, payable by cargo owners to the NPA has been excluded from these spending profiles. This charge is raised to finance the cargo-working infrastructure of the ports (replacing the old Ad Valorem Wharfage charge), but associated revenue has historically not been retained by the individual port communities in question. NPA charges are consequently limited to those to relate to tangible activities conducted on the land or on the water in the Durban port area. 2 In these instances, cargo principals or carrying lines would deal directly with stevedores. It has been suggested that an initial spending injection of, say, R10 million stemming from various payments from vessels or their cargoes as a result of a call at the Port of Durban, would raise final income or output in the Durban area by R19 million. If this multiplier concept is applied to the spending patterns set out above, then a representative container caller to the port would be responsible for firstround local spending of some R2.94 million per call, but this would ultimately raise local income by 13

14 R5.6 million, while total annual calls by container vessels (at 2004 activity levels, but 2006 price/tariff levels) would generate first-round local spending of R3.7 billion, but would raise final local incomes by just over R7 billion. Similarly, a representative breakbulk caller is assumed here to spend roughly R1.8 million per port call in the first round or a multiplied expenditure of R3.4 million; if such a caller is indeed representative, then the 800 general cargo callers to the port in 2004/5 would have generated R1.44 billion in terms of first-round effects, or R2.7 billion if multiplier effects are considered. URBAN- ECON AND UNIVERSITY OF KWAZULU-NATAL (2007). The combined revenue generations of the combined container and break-bulk activity is a not inconsequential first round local spend of R5.14 billion and when multiplier through the economy a significant R10 billion per year The ship repair industry Historically ship repair is an area where Durban was well capacitated and where in recent years this has unfortunately become much smaller. From an employment point of view this activity, because of its labour intensity, is ideal to create jobs in the region. This has to be balanced against the demand for the service and several key advantages/potential strengths have been identified:- Durban has terminal port status as vessel calls are made annually by nonbunker/transit callers, representing approx different ships. It can provide a regular, planned, survey maintenance need from this substantial baseline to fully exploit the potential demand for ship repairs. The ship repair industry is less vulnerable than shipbuilding to vagaries of market cycles and the provision of ship repair facility for the largest diversified general cargo port in southern hemisphere is essential. Durban already generates approximately R300 million in annual revenue from ship repairs. Our hostile coastline generates opportunities for repairs by reasons of force majeure. Accidents and bad weather can provide windfalls to the industry which are also able to potentially undertake large jobs. There are relatively poor alternative repair sites in South, East Africa & Southern Indian Ocean. Cape Town is preoccupied with offshore oil industry and fishing. East London has limited facilities and shallow back-up cluster. Mombassa is similar to East London. Antsiranana (Diego Suarez) in Madagascar has fair infrastructure but woeful backup services. Nearest good facilities are Dubai & Singapore which gives Durban a competitive advantage in this region. Durban also has powerful backward linkages, multipliers to local industries/activities, such as, steel fabrication, mechanical & electrical engineering, paint and outfitting which gives strong employment and expenditure multipliers. South African steel prices are globally competitive. However, there are significant limitations/challenges for Durban to provide this service on a large scale, The graving dock is currently unsuitable for modern, beamy, dry-bulk and container vessels and has a limitation of a 3000 container vessel. The repair facilities are out of alignment with future deepened port access and there is an urgent need for post-panamax dimensioned docking to be provided. There is limited superstructure and equipment at the current graving dock leading to poor services and generally indifferent housekeeping. There is clumsy public/private sector interfaces particularly at the graving dock, the small floating dock and repair piers. The larger floating dock, yards, berths controlled by private repairers work more efficiently. There is however a need for articulated the repair cluster strategy. The ship repair industry is substantial, generating annual turnover of some R300 million, and providing over 900 jobs, but has not realised its full potential. A strategy must be determined to recapture the lost market of previously regular and committed patrons. Major service providers lack dynamism and require a rethink in their approach. It is also clear that not all organisations have not fully grasped the diverse terminal port opportunities of a wider port and are able to seize the competitive advantages that this will bring. 14

15 5.4.3 Container handling. Currently virtually all container handling, once the container has been offloaded, is done within the immediate surroundings of the port. Many companies have set up land hungry container parks to store and provide transit areas for de-stuffing and repacking outbound containers to Gauteng. With South Africa being a net importer of containerised goods, the issue of empty containers and their storage is also an important issue to be dealt with. The container parks, while conveniently located for the operators of these facilities are on land that could possibly be better suited to port expansion. The need for alternative facilities linked to a better transportation network in which containers can be moved efficiently, preferably by rail, to a remote destination(s) is clearly worth pursuing. This will provide several benefits to the region not least of all being a change in the modal split to rail. The initial thoughts are for three such strategically located and efficiently operated inland terminals located north, south and west of the city to serve the movement in and out of the port. These hubs will receive containers via 50 truck block trains from the Port Container Terminals directly to where road carriers will then distribute containers to their final destination. This provides the greatest opportunity to improve the competitiveness on the Durban-Gauteng corridor. Various initiatives are currently underway to think though ways to maximize the benefits of this solution. 6. CONCLUSION The phenomenal growth of the Durban region, underpinned by the logistics hub of the Port of Durban and surrounding back of port logistic activities, has created interesting but complex challenges for both the Port and City authorities. The ability for the Port to expand in a sustainable manner, within the timeframes required, will be critical to ensure that the Durban region flourishes in the future, and sustains its role in the South African economy. Over the next five years, very close and collaborative working between City and Port authorities would be required to ensure a viable and sustainable port expansion solution, which is acceptable to all stakeholders, is achieved. Apart from arriving at a workable expansion solution for the medium term, challenges of dealing with short term operational conflicts in a mutually beneficial manner will be the key to dealing with the growth challenges faced. 7. ACKNOWLEDGEMENTS The authors wish to acknowledge the work undertaken by their respective organisations and consultants during the TEMPI process. The views expressed in the paper are those of the authors and do not necessarily reflect those of the ethekwini municipality or Transnet. 8. REFERENCES Mander, M Durban Bay Ecosystem Services Supply: A review of the ecological-economic model, Futureworks, Durban, South Africa. Mather, A.A., Redman, T. and Akkiah, P Joint planning for the Port and City of Durban. 10 th International Cities and Ports Conference, Sydney, Australia. Todes, A Transnet ethekwini Municipality Port Initiative (TEMPI): Key Points Emerging from the Process, HSRC, Durban, South Africa. Urban-Econ and University of Kwazulu-Natal Report for ethekwini Municipality: An economic perspective arising out of the TEMPI process, University of Kwazulu-Natal, Durban, South Africa. 15