WALVIS BAY – Speculation around the new container terminal was finally put to rest when the Namibia Ports Authority announced that they will be leasing it for the next 25 years.
Namport CEO Andrew Kanime on Thursday said in his brief to port users and journalists at Walvis Bay that they have appointed international consultancy firm Maritime Business and Transport Solutions (MTBS) to assist with the process. At least five reputable operators have shown interest in running the new container terminal that was commissioned in 2019. Kanime said the concessioning of the N$4.2 billion investment does not mean that it will be sold, but they will enter into a specialised lease arrangement, where the operator runs the terminal and handles the containers in lieu of an upfront payment to Namport. The deal is expected to be finalised before the end of the year. “The successful operator should be able to make volume-related payments during the tenure of the concession, introduce additional capital for investments, and drive operational efficiencies. The operator will only be permitted to handle containers and limited project cargo, and not non-containerised cargo, for 25 years.
This is in line with international benchmarks which will allow them to recoup their investment, as the contract will entail the expansion of the terminal quay and yard to increase throughput,” he added.
Kanime explained that the decision to lease out became a reality when the dynamics in the shipping industry significantly shifted on the back of depressed macro-economic conditions which negatively impacted industries across all sectors, including the newly- constructed container terminal.
As a result, imports and exports handled through Namibian and other ports across the region and shipping lines moved to larger-sized vessel deployment as part of their own drive towards cost rationalisation.
“These unforeseen and unfortunate developments caused a significant decrease in the volumes’ throughput through the new container terminal. Given the need to earn a return on this very strategic investment, we have been compelled to explore means and ways we can drive the utilisation of the terminal, and amongst the outcomes from our considerations has been the decision to consider concessioning the new terminal to an independent operator,” he stated.
The new container terminal employs less than 300 people, whom Kanime said have been briefed about the development, and that they will be employed by the new operator, once appointed.
“The agreement will see to it that jobs at the new container terminal will not be affected, although the terminal will be operating independently,” he continued.
Challenges posed by Covid-19 resulted in Namport’s revenue declining by 2% to N$1.113 billion (2019/20: N$1.138), overshooting a target of N$1.032 billion for the 2020/21 financial year. Despite these obstacles, Namport still managed to generate an operating profit of N$96 million (2019/20: N$132 million), while the Namport Group’s revenue declined by 12% to N$1.485 billion (2019/20: N$1.688 billion), with an operating profit of N$146 million (2019/20: N$203 million).
“The year ending 31 March 2021 was arguably one of the most challenging in the group’s recent operating history. The commencement of the year coincided with the Covid-19 pandemic reaching our shores, following the initial outbreak in China in late 2019. The financial year was, therefore, marked by rolling lockdowns, which were imposed to stem the spread of the virus,” Kanime stated in their latest annual report.
The decrease in revenue was largely attributable to the decline in volumes throughout and dockings at the ship repair facilities, another direct reflection of the impact of Covid-19 on the business.
Operational performance vessel calls at the Ports of Walvis Bay and Lüderitz during the year ended 31 March 2021 decreased by 444 vessels or 25%, year-on-year.
Top port operators
Concessioning of ports around the world is a common practice, with China Ocean Shipping Company (Cosco), PSA International from Singapore, Dubai Ports World, China Merchant Port Holdings, AP Moller Terminal and the Chinese Hutchinson Port holdings regarded as the top operators.
According to online reports, PSA International owns and operates over 25 ports in Asia, the Middle East, Europe and Panama. The Chinese Hutchinson Port holdings operate 300 berths across critical ports around the world, while their holding company operates 48 ports across prominent shipping routes in Asia, Europe and Africa. Dubai Port World is a relatively new player, but its terminals handle nearly 10% of all global container trade, and they are a major player in Asia and Europe. It now also has interests in Africa, and operates 40 terminals all over the world.