Private Sector Participation in Eastern Africa Ports

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Private Sector Participation in Eastern Africa
Ports

• Olivier Hartmann PMAESA

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Summary

• A few words about PMAESA
• Port activity in Eastern and Southern Africa
• Focus on the East African Ports of Djibouti,
  Mombasa, Dar-Es-Salaam and Port Louis
  
• Productivity comparisons in ES Africa

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PMAESA

• PMAESA is the regional port industry association
  for Eastern and Southern Africa (Governments,
  Port authorities and operators)
  
• Angola to Sudan, including Islands and landlocked
  countries

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Scope of PMAESA
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Port activity in Eastern and Southern Africa

• Current situation can be summarised by growth of
  container volumes leading to saturation of
  facilities

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Port Activity

• 81 in TEU for total container throughput
  between 1997 and 2003 (equivalent to 10 per
  year). 2004 is stagnant compared with 2003.
  
• 93 in TEU for transhipment between 1997 and
  2003 (equivalent to 12 per year). In 2004,
  transhipment decreased in Mauritius (result of
  congestion), and almost disappeared in Djibouti
  (PIL returned to Aden)

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Container growth
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Transhipment in ES Africa
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Congestion

• Most container terminal are reaching or have
  reached capacity limits
  
• Durban has had a congestion surcharge imposed by
  shipping lines since 2 years
  
• Yard saturation in Dar-Es-Salaam is affecting
  productivity
  
• Mombasa is operating above design capacity, and
  shipping lines threatened the port to impose a
  congestion surcharge
  
• Mauritius had experienced problems linked to
  explosion of transhipment traffic
  
• Djibouti is facing problems due to saturation of
  the terminal by transit containers affecting
  productivity

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Response to congestion

• There are two ways to reduce or eliminate
  congestion
  
• Improve efficiency when possible
• Develop additional capacity
• Other the last 10-15 years, capacity development
  has been extremely limited
  
• Container terminals in Reunion and Mauritius
• Additional handling equipment in some ports
• Private sector participation has been a standard
  response to improve efficiency

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Focus on selected Eastern Africa ports

• Djibouti, Mombasa, Dar-Es-Salaam, Port Louis

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Status of Ports
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Status of Ports
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Container Terminals
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Mauritius (1)

• In 2003, several shipping lines signed agreements
  with MPA to use Port Louis as a hub, resulting in
  increasing volumes of transshipment traffic
  
• Consequence was development of congestion,
  characterized by pre-berthing delays

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Mauritius (2)
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Mauritius (3)

• The situation was becoming unacceptable to lines,
  which started to review their options.
  
• Concurrently, the port adopted drastic measures
  to ease congestion, through
  
• Additional handling equipment
• Adoption of a berth window scheme
• Revamping terminal operations

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Mauritius (4)
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Mauritius (5)
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Mauritius (6)

• in September 2004, MOL and PO Nedlloyd
  relaunched a direct Singapore Indian Ocean
  Islands service, instead of the transhipment
  operation through Mauritius, reducing volumes

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Mauritius (7)

• Procurement of 10 tractors and 13 trailers
  (Delivery Sept. 2004)
  
• Procurement of 2 additional SSG (by mid 2006)
  with total capacity to 550,000 TEUs for 5 cranes
  
• Replacement of current yard equipment by 4 RTGs
  in mid 2005 with option for 2 more units
  
• Deepening of basin and channel to 14.5 m (mid
  2005)

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Djibouti (1)

• Djibouti is handling the transit traffic of
  Ethiopia, representing most of the activity of
  the port.
  
• In a situation of limited capacity, transhipment
  and transit are not fully compatible, and most
  lines using Djibouti as a hub stopped
  transhipping there after the outbreak of the war
  between Eritrea and Ethiopia.

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Djibouti (2)

• Additional handling equipment (yard and quay
  cranes) was delivered in January 2000
  
• PIL, which moved to Aden in 1999, temporarily
  returned to Djibouti, but moved back to Aden
  during the second half of 2003, stopping
  transhipment in the port

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Djibouti (3)

• Container Terminal is limited, with 400m quay
  wall (one berth at 12.0m, the other at 9.5m)
  
• Although productivity is high (24.7 moves per
  ship working hours over 2003-2004), the terminal
  was operating close to saturation levels in 2003
  
• Regaining transhipment activity requires
  additional capacity

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Djibouti (4)

• The port of Doraleh is an extension of the port
  of Djibouti, located 7km from the existing port
  
• The quays will be at 18m, and the new facilities
  include an oil and gas terminal, plus 1200m of
  quays for a Container Terminal (capacity 2
  million TEU)
• Includes also a free industrial zone
• Development started in June 2003 with Oil terminal

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(No Transcript)
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Tanzania (1)

• The Govt. Policy is
• 100 ownership of assets
• Public authority to become landlord
• Lease / concession or joint venture for
  terminals
  
• Status
• 2000 Concession of Dar Container Terminal
• New Port Acts (THA to become TPA) November 2004
• Regulator in place (SUMATRA)
• Other Dar units to be leased out
• Secondary ports (Tanga and Mtwara) to remain
  under TPA until opportunity arises

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Tanzania (2)

• Status prior to concession of Dar Container
  Terminal
  
• Huge investment / rehabilitation programme (500M
  World Bank and THA 1985/94)
  
• Establishment of a Container Terminal
• Improvement to General Cargo Berths 1-8
• Grain Silo. - 30,000 tons capacity
• Oil Jet Upgrade
• Procurement of Handling Equipment
• Entrance Channel dredging
• Institutional development

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Tanzania (3)

• Dar-Es-Salaam Container Terminal
• Main objective was to improve efficiency of
  operations
  
• Leased in 2000 for 10 years term
• Leased fee structure
• Fixed fee
• Royalties on Containers
• Responsibilities maintenance of infrastructure
• Initial strategic partner was ICTSI, but taken
  over by HPH (part of global deal for
  international portfolio of ICTSI)

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Tanzania (4)

• Results since 2000
• Traffic growth
• Productivity increase
• Container dwell time decreased
• Is this the effect of private sector?

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Dar Container Terminal

• Container traffic increased, doubling between
  2000 and 2004
  
• Transhipment has picked up (from nil to 22 of
  throughput)

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Dar Container Terminal

• Ship waiting time has decreased
• Ship service time is linked to total volume to
  handle during call, so this is not significant

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Dar Container Terminal

• Productivity has increased
• Berth productivity is defined as moves divided by
  total berth time
  
• Net crane productivity is defined as moves
  divided by net crane hours

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Dar Container Terminal

• Container dwell time has decreased

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Dar Container Terminal

• In a context of global improvement of the
  efficiency, what can be attributed to the private
  sector, and what can not?
  
• Trade volumes have grown in Eastern Africa
  (Mombasa, without private sector, has experienced
  similar growth)
  
• Waiting time was linked to the entrance channel,
  and situation improved prior to concession
  
• Container dwell time is primarily linked to
  Customs process, outside the realm of the private
  operator

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Mombasa

• Prior involvement of private sector was in 1996,
  with management contract for the container
  terminal with HPH.

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Port of Mombasa

• Handling equipment
• Yard cranes 12 RTG and 2 RMG between October
  2004 and July 2005
  
• Quay cranes 4 SSG between July and October 2005
• Yard equipment tractors, reach stackers and 16t.
  Forklifts
  
• Partnership with KRC to purchase 200 wagons

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East African Ports Traffic 2004

• Traffic of Mombasa

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Productivity in ES Africa

• Comparison between Durban, Maputo, Dar-Es-Salaam,
  Mombasa, Port Louis and Djbouti

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Port Productivity in ES Africa

• Moves per GCH as indicator
• Several factors are adjusting final perceived (by
  shipping lines) performance
  
• Number of cranes allocated
• Efficient use of berth time
• Pre berthing delays if congestion

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Port Productivity in ES Africa

• Moves per berth hours as indicator
• Differences in port are not only linked to
  intrinsic productivity, but also call
  characteristics (volume of the call, type of
  vessels, etc.)

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Port Productivity in ES Africa

• Moves per ship working hours as indicator
• Close to berth hours
• Included here because available data differ from
  port to port

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Port Productivity in ES Africa

• Moves per call have effect on productivity
• Bigger ships means usually greater number of
  cranes
  
• Productivity increases with number of containers
  to handle

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Thank you for your attention

• PMAESA
• PO Box 99209 Mombasa Kenya
• Tel [phone] Fax [phone]
• pmaesa_at_africaonline.co.ke