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Ports & Ships Maritime News

21 April 2015
Author: Terry Hutson

Bringing you shipping, freight, trade and transport related news of interest for Africa since 2002


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A view of the multi-purpose guard vessel SVS FROBISHER (1010-gt, built 1974) which is undergoing maintenance in Cape Town harbour.The vessel is registered in Palau and is owned by Mauritian interests. Picture by AadNoorland

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Siyabonga Gama, Chief Executive of Transnet Freight Rail and the longest-serving member of the executive team, has taken over the job of Transnet’s Group Chief Executive in an acting capacity with immediate effect.

This was the announcement yesterday (Monday) that followed last Friday’s appointment of Chief Executive Brian Molefe on secondment to act as CEO of the embattled ESKOM.

Mr Gama is assuming all the responsibilities of the GCE for the duration of Mr Molefe’s secondment and performed his first such act yesterday when he officiated at the graduation ceremony held in Durban for Transnet’s School of Excellence (see below).

Although the announcements have emphasised that Molefe, and now Gama’s, appointments are on a secondment basis and in acting positions, Minister for Public Enterprises, Lynne Brown, has also clearly indicated that she wants Molefe to remain in the job long term, saying that the suspended Eskom CEO will be found another position within the organisation.

Which seems to suggest that Gama’s appointment as chief executive of Transnet Group isa likely to become a permanent one.

Gama is the most experienced of Transnet’s officials at the senior level. He has been with the company for 21 years, during which he has been Planning Manager at the Port of Durban, Port Manager at the Port of East London, first Chief Executive of the National Ports Authority, and his most immediate job as Chief Executive of Transnet Freight Rail.

This latter has probably been his most difficult job, in which he could be said to have received a ‘poisoned chalice’ when first appointed. Despite the many obstacles, which included a legal challenge, the rail company has been turned round during his term in office, being transformed from annual losses averaging R21 million in 2005 to R5,1 billion profit in the last financial year.

He has also held several international posts and is an experienced and highly regarded executive, both within and outside Transnet.

He now succeeds to a new position in which he has overall command of over 60,000 employees within the greater Transnet organisation, including rail, ports authority, port operations, pipelines, and engineering.

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Over 100 graduates celebrated the completion of their training from Transnet’s specialist academy for maritime skills as the state-owned company accelerates its training programmes – a key element of the R330 billion investment programme.

In a ceremony held in Durban yesterday, 115 trainees completed courses in various areas of port operations, including:

  • 13 Marine Pilots (to assume command of vessels into and out of South African ports)

  • 21 Tug Masters (to operate tugs or power boats which manoeuvre vessels)

  • 3 Chief Engineers

  • 9 Engineering Technicians

  • 9 Engineers

  • 8 Master Port Operators (for the Namibian Ports Authority)

  • 8 Master Port Operators

  • 36 Operators: Lifting Equipment (ship-to-shore cranes, rubber tyred gantry (cranes) and straddle carrier operators)
  • All 115 graduates completed their internationally recognised qualifications at Transnet’s Maritime School of Excellence campuses situated at the old Durban airport site (main campus) and its satellite campuses in Richards Bay, Cape Town and Port Elizabeth.

    Transnet is spending R7.7 billion on training as it drives to meet its capacity requirements in line with the Market Demand Strategy (MDS). This year’s graduating class, of whom more than 90 percent are black, are now employed in Transnet’s port operations throughout South Africa.

    Encouragingly, and in line with Transnet’s objective of establishing the Maritime School of Excellence as the leader in maritime training in Africa, eight of this year’s graduates are from the Namibian Port Authority.

    Another group of students is enrolled from the Indian Ocean Island of Reunion but was not due to graduate this year.

    The Transnet Maritime School of Excellence is a merger of the School of Ports and the School of Port Operations and is the first of its kind in South Africa. It specialises in the following marine and ports related vocations:

  • Marine Operations

  • Terminal Operations

  • Port Management

  • Port engineering
  • Transnet has spent about R2.5 billion in training over the last two years and has amalgamated its different schools under the Transnet Academy. This is intended to ensure an integrated approach to training delivery across the company, while at the same time benefitting from economies of scale through shared services in areas like Human Resources and Procurement.

    In addition to the Maritime School of Excellence, Transnet has consolidated its training in campuses throughout South Africa under:

  • School of Rail

  • School of Engineering

  • School of Security

  • School of Leadership and Business Training
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    Prasheen Maharaj (left), CEO of Southern Africa Shipyards, seals the deal with Ye Fengsheng of China Shipbuilding Trading Company

    Southern African Shipyards (SAS) has entered into a Memorandum of Understanding (MOU) with China Shipbuilding Trading Company (CSTC).

    The Chinese shipyard is a subsidiary of China State Shipbuilding Corporation. The MoU establishes a meaningful union between the largest shipyard in Southern Africa and the world’s largest shipbuilding group.

    “In terms of the MoU, SAS and CSTC have committed to building a collaborative institutional relationship where we share our experience and expertise, particularly around potential projects which fall under Operation Phakisa,” said SAS CEO, Prasheen Maharaj.

    Operation Phakisa was launched by President Jacob Zuma in 2014. One of its two key focus areas is to develop South Africa’s maritime economy in sectors such as marine transport and manufacturing and offshore oil and gas. It includes the expansion of South African port capacity for repair work for oil ships and oil rigs.

    “China and South Africa are both members of the BRICS strategic global alliance and our MoU is a natural outcome to promote each other’s maritime interests,” added Maharaj.

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    Picture: Italian Navy

    In yet another tragedy involving migrants from Africa, who were seeking new lives in Europe, an estimated 700 people have died after their ferry boat capsized in the Mediterranean.

    Once the death toll has been confirmed this will bring to about 1500 the number of migrants who have died trying to reach safety in Europe. Most were fleeing the ongoing fighting and turmoil in Libya.

    The latest disaster involved a 20 metre boat that sank some 70 n.miles off the coast of Libya, south of the Italian island of Lampedusa.

    At the time when the boat capsized a large merchant ship was approaching. It is not clear whether the migrant boat sought to evade the approaching ship or what exactly happened.

    One report suggested that as the merchant ship approached many of the passengers on the ferry rushed to the one side in expectation of being taken on board the ship, causing their boat to become unwieldy and to capsize.

    Some 28 people were rescued from the sea and one told his rescuers that the boat had been carrying 700 migrants as passengers.

    The latest tragedy has raised questions over a recently introduced and rather callous European policy of reducing its seek and rescue missions in an attempt to deter migrants from attempting to cross the Mediterranean in order to reach Italy and Europe.

    International aid groups strongly criticised the decision and since the latest disaster at sea, a number of European governments have called for urgent talks and a revision of this policy.

    France’s President Francois Hollande said that rescue and disaster prevention efforts required more overflights and more boats and more intense effort against people trafficking.

    Sweden’s Minister for Justice and Migration, Morgan Johansson said more EU countries must take responsibility for the refugee situation and called for an expansion of the EU’s border protection programme.

    Italian Prime Minister Matteo Renzi said that resolving the crisis was more than just search and rescue at sea. He said a concerted international effort was needed to locate and stop people traffickers, many of whom have flourished during the chaos among warring clans in Libya.

    “We mustn’t leave the migrants at the mercy of criminals who traffic human beings,” Renzi said. “We are asking not to be left alone.”

    The prime minister said Italian and foreign navy and coast guard vessels, patrol boats and merchant ships, as well as helicopters, were involved in the search-and-rescue operation, which was being coordinated by the Italian coast guard in Rome.

    Pope Francis repeated his call for quick and decisive action from the international community.

    “They are men and women like us, our brothers seeking a better life, starving, persecuted, wounded, exploited, victims of war. They were looking for a better life, they were looking for happiness,” he told tens of thousands of people gathered in St. Peter’s Square for his Sunday noon address.

    The size of the problem facing Europe can be gauged by the 20,000 that are estimated to have reached Italy this year, so far. This large number is however less than those who arrived in the same period last year but the number of migrants who have died in 2015 has risen nine-fold.

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    Picture: Ian Shiffman

    Since February, freight rates on the three key container shipping lanes has left the erratic up and down movements behind only to slide week after week, according to BIMCO.

    On Friday April 10, 2015 the freight rate including ocean freight and surcharges, i.e. was quoted at US$466 per TEU for the Shanghai to Europe trading lane. This is the lowest on record since the 2009.

    The new all-time low point comes on the back of deteriorating exports from China for three months running in 2015. Export were down by 15% in March y-o-y. Moreover, Imports dropped too to the extent of 12.3%. The link between the global economics, external trade and the shipping industry is once again clearly felt in the freight market.

    The challenges mount again on the Europe bound trade
    “Striking the right level of supply to match the actual demand for transportation on this key container ship trade route has proven impossible recently,” says Chief Shipping Analyst at BIMCO, Peter Sand. “The re-activation of almost the entire idle fleet during the autumn, in a combination with the continued inflow of new ultra-large container ships on the Far East to Europe trades has yet again, developed a situation where overcapacity sours the freight market.”

    In early December, BIMCO wrote: “Following the return of great volatility in freight rates, it is bound to take some time for market conditions to re-establish a more stable market. This is especially true in a declining market, where absolute volumes are reduced in Q1.

    “When adjusting supply, being ‘caught out’ just behind the curve may lead only to falling rates, despite an attempt to strike the balance.”

    Following a brief rise in freight rates on Shanghai to Europe in the first half of January, going from $975 per TEU to $1,256 per TEU, freight rates have only slipped since. Lately, it proved impossible to negotiate higher freight rates, despite the announced general rates increases (GRIs) by most liner companies from 1 April.

    China’s main export partners are the US (17%), European Union (16%), ASEAN (10%), Japan (7%).

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    Mozambique Macuse map CIA 350px Mz map
    Map showing the proposed route from Tete to a new port to be built at Macuse, with other Mozambique railways also shown

    The project to build a railway from the Moatize coal basin in the western Mozambican province of Tete to a new deep water port at Macuse, on the coast of Zambezia province, is in serious trouble, since it has been unable to secure funding, according to a report in Friday’s issue of the Maputo daily Noticias.

    The problem is the collapse in the world market price of coal. Coal logistics projects no longer look as attractive as they did a couple of years ago.

    Building a new port and a 500 kilometre new railway seemed an excellent option when it was predicted that Mozambican coal exports might reach 100 million tonnes a year, and that the existing Sena line, from Moatize to the port of Beira could not cope with more than 12 million tonnes a year.

    Abdul Carimo, chairperson of the Zambezia Integrated Development Corridor (CODIZA), the company proposing the project, said that about four billion US dollars are needed. No-one will provide sums that large without cast-iron guarantees that the railway and port will be viable.

    Speaking in the Zambezia provincial capital, Quelimane, Carimo suggested that one way out is to involve the Indian consortium, ICVL (International Coal Ventures Limited).

    Last year ICVL purchased the Mozambican coal assets of the Anglo-Australian company Rio Tinto for the remarkably cheap price of US$50 million. The main asset is the Benga open cast coal mine in Moatize.

    Exporting Benga coal to India is not dependent on international coal prices since ICVL was set up by the Indian government exclusively for the purpose of acquiring coal mines and other coal assets abroad to meet India’s own coal requirements.

    Carimo said that ICVL currently imports more than 450 million tonnes of coal a year. India’s need for imported coal is expected to rise to 650 million tonnes a year. Much of this could come from Moatize, and would be more than enough to justify the new railway and port.

    Carimo also wanted the government to authorise extension of the planned railway westward, to Chitima. There is good quality coal in Chitima, he said, and over 70 companies have coal exploration licences there – but nothing was yet being mined.

    He was confident that, if the railway were to be extended to Chitima, and ICVL came on board, then the market and logistics problems for the Chitima coal would be solved. - AIM

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    PECT aerial 470
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    URSUS 17 04 15 0631 480

    URSUS 17 04 15 0633 480

    On Friday last week (17 April) the tug URSUS (3216-dwt, built 2008) entered Durban to load bunkers. The 65m long German-owned and managed tug which flies the Antiqua/Barbuda flag, has been out and around Durban anchorage for several weeks, presumably on laybye.


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