TNPA lays out plan for Durban’s liquid bulk hub

According to a release, the plan, which sets out to address lease consideration within the major petrochemical hub in the port while encouraging new market entrants, also aims to enhance South Africa’s supply of strategic liquid bulk commodities.

Commenting on the roadmap, Shulami Qalinge, TNPA’s chief executive, said: “The underlying principles of the Island View Precinct Strategy are to promote radical socioeconomic transformation and job creation and to facilitate investment in ageing infrastructure.

“The strategy will also allow us to allocate capacity to new entrants and to introduce an operating model that ensures equal access. This will enhance the security of supply.”

Historically, Island View Precinct (IVP) lessees have had tenancy of over 50 years, leading to slow transformation within the precinct, according to the TNPA.

Most of the precinct’s footprint is occupied by cargo owners who act as terminal operators and are responsible for landing, shipping and/or storage of South Africa’s petroleum, diesel and aviation fuel as well as chemicals, oils and lubricants.

The plan explained

At the moment, 14 leases in the IVP are on a month-month arrangement, with an additional lease expiring in 2020 — which could render vacant three IVP sites.

All of these affected leases will be advertised via an open tender process, beginning this year, which will allow for shortlisting of bidders, with only those shortlisted able to submit final bids.

According to Ms Qalinge, existing operators could re-bid but would have to meet Transnet SOC’s strict transformation and job-creation requirements.

Potential new entrants will need to fulfil certain transformation criteria, like Level 4 in Broad-Based Black Employment Equity (B-BBEE), and TNPA will seek 51% black ownership in the terminal operator company, the national authority said.

All of the IVP’s immovable assets will transfer to TNPA, as existing lease agreements provide for, with leases currently operating on a month-to-month tenure to be extended to allow for the conclusion of the open process as well as for a smooth transition with the IVP strategy’s implementation.

Lease extensions will generally be on the same terms and conditions, but rentals will be market-connected, while tenure will be aligned with the condition assessment of existing facilities and terminal operator investment plans, as well as being capped at 25 years.

Tenants will be responsible for decommissioning, rehabilitation and remediation of IVP lease sites.

This month, TNPA will engage existing precinct tenants individually to discuss and finalise terms and conditions of short-term lease-extensions and asset-transfer, with the company also planning engagement sessions with other interested parties later this year.

To submit comments and suggestions to TNPA regarding the plan, email IslandViewstrategyengagement@transnet.net.