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1 EDGE SEMINAR SIP2 Logistics and Industrial Corridor 19 February 2015

EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

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Page 1: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

1

EDGE SEMINAR SIP2 Logistics and Industrial Corridor

19 February 2015

Page 2: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Contents

SIP2 Overview and Context

Port and Logistics Observations

Infrastructure Programme

Conclusion

2

Page 3: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

The National Infrastructure Plan comprises 18 Strategic Integrated Projects (SIPs)

3

Page 4: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

SIP 2: Durban-Free State-Gauteng Logistics & Industrial Corridor

4

KZN- Free State &

Gauteng

Improve logistics and economic integration between the main economic centres and

raise the efficiency of the export operations

• Strengthen the logistics and transport corridor

between SA’s main industrial hubs;

• Improve access to Durban’s export and import

facilities,

• Raise efficiency along the corridor;

• Integrate the Free State Industrial Strategy

activities into the corridor; and

• Integrate the currently disconnected industrial

and logistics activities as well as

marganisalised rural production centers

surrounding the corridor that are currently

isolated from the main logistics system.

Project Location

SIP2 Launch Presentation 18 June 2012

Page 5: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Total freight on the South African surface is expected to increase from 761mt to 1 970mt. Flows through the port system will increase from 239mt to 565mt and cross-border traffic from 31mt to 70mt

2013 2044

Source: Transnet Freight Demand Model, 2014

The Gauteng-Free State-Durban Corridor is the most important economic corridor in the country

5

Page 6: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

SIP2: Key Objectives

• Improve the efficiency and effectiveness of the corridor;

– Create capacity ahead of demand;

– Create better access to the corridor; and

– Facilitate regional trade;

• Align stakeholders behind a common plan for the corridor;

• Accelerate and synchronise infrastructure rollout; and

• Optimise industrial capability building, skills development and job creation.

6

Page 7: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

SIP2 Portfolio

7

Port of Durban Port

and Rail Expansions

Durban Dig-Out

Port

City Deep

Tambo Springs

Harrismith Logistics

Hub

West Rand Hub

Pyramid South

Aerotropolis Sentra-Rand

Dube Trade Port

Cornubia Integrated Settlement

Rural Development

(SIP 11)

NSC (SIP 17)

Cato Ridge

Northern Region

Central Region

Southern Region

Page 8: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

SIP2 Sponsors And Steering Committee

SIP Coordinator Transnet

Provincial Government Departments and Agencies

Local Government National Government

Departments SOCs and Agencies

Transport

Public Enterprises

Trade and Industry

Agriculture, Forestry and Fisheries

KZN

Office of the Premier Department of Transport Department of Economic

Development and Tourism

Maluti-A-Phofung Municipality

Transnet eThekwini Municipality

Free State

Office of the Premier Department of Transport Economic Development

Gauteng

Office of the Premier Department of Roads and

Transport Economic Development

City of Johannesburg

City of Tshwane

Ekurhuleni Metropolitan Municipality

SANRAL

ACSA

RTMC

Eskom

Presidency

National Treasury

Rural Development

Economic Development

Minister of Trade & Industry

8

Page 9: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Contents

SIP2 Overview and Context

Port and Logistics Observations

Infrastructure Programme

Conclusion

9

Page 10: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

43%

11%

42%

4%

Containers & Auto General freight

Liquid fuels Minerals

Corridor Volumes 2011 and 2042

Over berth: 186 mtpa

Long haul: 110 mtpa 190 trains, 2700 trucks per day

Hinterland: 53 mtpa 8300 trucks per day

Cross border: 3 mtpa 6 trains, 120 trucks per day

Volume split

Long haul: 39.5 mtpa 30 trains, 4200 trucks per day

Cross border: 1.3 mtpa 3 trains, 135 trucks per day

Hinterland: 19.0 mtpa 2800 trucks per day

Over berth: 65.3 mtpa

Future Volumes

Current Volumes

10

Source: Transnet

Page 11: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Around 60% of the country’s imports and exports go through the Port of Durban

-

100

200

300

400

500

600

700

800

Imports Exports

Bill

ion

s

Big 3 mining exports

Total Import/Export

Durban

11 Source: GAIN, 2012

Page 12: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Key Logistic Sector Observations

• 60% - 75% of all containers shipped & landed at the Port of Durban do not travel further than 30km from the port.

• However, 70% - 80% of all cargo landed in containers nonetheless does leave eThekwini Municipality.

• Of 1,320 logistics companies identified in eThekwini Municipality, 1,021 (77%) are trucking related.

• 60% of all trucking related logistics companies are located within 15km of DCT.

• 90% of all trucking related logistics companies are located within 30km of DCT.

12

Source: eThekwini Transport Authority, 2012

Page 13: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Status Quo & Current Challenges Container movement from/to port

62.3% Import TEU

80.3% Export TEU

13

Source: eThekwini Transport Authority, 2014

Page 14: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

50.6%

3.9%

5.9%

8.7%

Status Quo & Current Challenges Logistics activity by industrial area (% of all logistics by area)

70%

14

Source: eThekwini Transport Authority, 2014

Page 15: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Future Growth & Challenges

• Currently, 2.6 million TEU per annum moving through port, resulting in +/- 8000 daily container related heavy vehicle movements around the Bayhead Area;

• The containers could reach 8.2 million TEU by 2040, with new dig-out port at old Airport Site, resulting in +/- 17500 daily container related moves in the South Durban Basin Area;

15 15

Source: eThekwini Transport Authority, 2014

Page 16: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Location of Integrated Freight Strategy

Port Upgrades

Rail Yard Upgrades

Truck Parking / Short Term Staging

All Inclusive Truck Stop

Intermodal Hub / Rail Sidings

Weighing Facilities

Dedicated Freight Route

National Corridor Upgrades

Crucial Freight Corridor Upgrades

16

Source: eThekwini Transport Authority, 2014

Page 17: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

The Maritime Connectivity Challenge

The intensity of global shipping by number of sailings

Source: World Bank

Page 18: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

18,000 TEU vessels are already on the water …

(Source: The geography of transport systems)

15m+

(Indicative size)

Latest

Generation

Port of Durban – with deepened berths

• New deep-water berths with chart datum depth of 16,5m will enable routine handling

of all of these classes of vessels

• Modern, deep

water facilities are

required to

routinely handle

these vessels

Port of Durban - currently

• Special handling conditions

Port of Durban - currently

• Handles these vessels

routinely

More than 70% of all container ships on order in the global market

are >8,000 TEU capacity

18

Page 19: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Bigger ships translate into a lower cost per TEU

19

Page 20: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Contents

SIP2 Overview and Context

Port and Logistics Observations

Infrastructure Programme

Conclusion

20

Page 21: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Port of Durban, Rail

and Road Expansions

PORT EXPANSION

RAIL PORT EXPANSION

ROAD EXPANSION

Pier 2

Pier 1

DDOP

21

Page 22: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

DCT (Pier 2) Berth Expansion and Deepening

Project Rationale Additional capacity plus ability to handle larger vessels

Project Scope • Lengthen berths 203 to 205 from 914m to 1210m;

• Deepen approach channel • Deepen berths 203 - 205 from 12.8m

CDP to 16.5m CDP; • Construct New quay walls able

withstand loading from heavier modern Ship To Shore (STS) cranes.

Project Stage Completing detail engineering design

Construction Period 2016 - 2021

Development Impact Improve the safety , efficiency, capacity of Pier 2 and accommodate larger vessels Progress Environmental authorisation granted

22

Page 23: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Salisbury Island Expansion

23

Project Rationale Create additional 1.4 million TEU capacity

Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land. Project will deliver two deep water berths, terminal and cranes and increase capacity from 0.7 mil TEUs pa to 2.1 mil TEUs p.a. The project will be executed in phases.

Project Stage Feasibility study nearing completion

Construction Period 2017-2022

Progress The lease agreement negotiations are at an advanced stage. EIA application targeted for completion in 2016/17.

Page 24: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Durban Dig-Out Port

Project Rationale Create additional container capacity in Durban

Project Scope The development of the old Durban International Airport (DIA) site to a deep-water mega container port, with an ultimate estimated maximum annual capacity of circa 9.7 m TEUs, to be developed in phases starting mid-2020’s through to mid-2050’s.

Project Stage Pre-feasibility

Construction Period 2021– 2025 Initial phase

Progress Pre-feasibility engineering studies commenced for Port July 2013 Landside geotechnical investigations undertaken; Initial Biodiversity due diligence study & contamination / groundwater assessment for DIA completed Sustainability Steering Committee established, to oversee sustainability elements to be incorporated into design, development and operation of the DDOP met-ocean investigations for current & wind data completed Hydrographic surveys to ascertain sea-bed configuration completed

24

Page 25: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Durban Rail in Port

Project Rationale Create additional rail capacity and more efficient rail operations within the port

Project Scope The upgrading, reconfiguration and relocation of yards and terminals within the Durban port area in order to complement the development of port capacity. Various lines and yards to be reconfigured to accommodate port developments and improve operational efficiencies

Project Stage Pre-feasibility study underway

Construction Period Commencing 2018

25

Page 26: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Road Expansion Plan

Phase 3: Post 2035 East West freight route from Port to Mariannhill

Port of Durban Phase 2: Post 2035 East West freight route from Port to Mariannhill

Phase 1b: Dependent of Phase 1 of Dig-out Port North South freight route to Dig Out Port

Proposed Dig Out Port

Phase 1a : Implement by 2020 from Port to N2 with new Interchange

Source: eThekwini Transport Authority

26

Page 27: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Freight Road 1a: East West: Bayhead to N2

Project Rationale Improve traffic flow into and out of port

Project Scope • New 4-lane freight road • New Interchange onto N2 • New interchange at

Langerberg/Bayhead Rd • 6.8km long • 2 x 11m carriageways • 1200 HV/hr carrying capacity

Project Stage Detail Design and EIA commenced

Construction Period 2017 - 2019

Development Impact Route will lead to the opening up of 44ha industrial land and alleviate congestion around the port area Progress Phase 1A: Design and EIA commenced - August 2013 (Targeted EIA approval: March 2015); Detail Design will be informed by the conditions of the RoD; Construction: Anticipated to commence in 2017.

27

Page 28: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Freight Road 1b: New EW link to Dig Out Port

Project Rationale Create link between existing and new ports

Project Scope • New 4-lane freight road • Substantially overpass structure • New interchange at E/W Freight

Route • 6.5 km long • 2 x 13m carriageways • 1200HV/hr carrying capacity

Project Stage Alternate options being investigated. Linked to the development of DDOP

Construction Period To be aligned with the DDOP

Development Impact New road will facilitate re-development of 751ha land Progress Route pre-feasibility location study complete Alternative strategies being investigated Alignment with DDOP FEL2 in progress

28

Page 29: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Back of Port (LAP) - secondary linkages

29

Project Rationale Improve land use and spatial planning in the back of port area

Project Scope • Upgrade existing roads to accommodate diverted traffic : Tara, Grimsby, Stanvac Roads

• New lanes and freight management infrastructure

• 7.3km long • 2 x 8.0m carriageways • 440HV/hr carrying capacity

Project Stage Detailed designs being finalised

Construction Period 2015-2023

Progress Preliminary design Stakeholder engagement and EIA ongoing

Page 30: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

N2 - Isipingo to Umdloti

Project Rationale Provide additional capacity required for the developments and growth of the Dube Tradeport, Cornubia Housing dev, DDOP, e.t.c

Project Scope Upgrade of the under pressure EB Cloete alleviating traffic movement of N2 and N3, and service the projected traffic volumes from the Durban Dig out port Upgrading and widening of the N2 road section between Umdloti and Isipingo

Project Stage Detailed Design

Construction Period To be determined

Progress Completed: Preliminary designs Exploring funding models

30

Page 31: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

N3 Road Network Upgrade

Project Rationale

Increase capacity along the corridor’s road network by upgrading the N3 section between

Project Scope upgrading of the N3 Section between Durban and Cedara. The project scope includes: • Widening of N3 to 8 lanes (4 per

direction), • Upgrade interchanges and possibly

build new interchanges,

Project Stage Design

Construction Period

Phase 1: Cato Ridge and Pmb by 2017 Phase 2: Durban to Cato Ridge by 2027

Progress Preliminary design and commencement of environmental assessment Exploring funding models

31

Page 32: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Contents

SIP2 Overview and Context

Port and Logistics Observations

Infrastructure Programme

Conclusion

32

Page 33: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

National Freight System Context

Freight system challenges Requirements for long term competitiveness

• Road - Rail market share is imbalanced and leads to high

costs, high carbon intensity and vulnerability to the

international oil price.

A large scale modal shift from road to rail to address costs,

congestion and carbon emissions.

A low carbon, energy efficient freight system that will reduce

vulnerability to the volatile oil prices and support South Africa’s

long-term trade competitiveness and sustainability.

• Global and regional maritime connectivity is poor. Consolidation in the regional shipping network and the creation

of international hub ports.

Increased maritime connectivity between regional ports.

• The regional freight system is weakly integrated and displays

poor performance.

A high performing core transport network in the region that

will enable growth in intra-regional trade.

• Demand for transport infrastructure across all modes will rise

significantly based on forecast freight demand.

A freight logistics system that creates capacity ahead of

demand, while ensuring that costs to users remain competitive.

• There is a shortage of skills across most areas of the freight

system.

Identification of priority and scarce skills, and targeted skills

development.

• Supplier industries for all transport modes are

underdeveloped.

The State to retain strategic control of the network in order to

lead and guide infrastructure investment and development of

the supplier industry.

33

Page 34: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

eThekwini Freight Vision

Freight & Logistics Vision for eThekwini By 2030, eThekwini will be the freight and logistics gateway into Southern Africa, providing a world-class freight system and infrastructure with seamless movements modes, origins and destinations of freight. Freight activities will be key in supporting eThekwini's industrialisation, while freight movements and operations will be efficient, cost effective and minimise the negative impact on residents and commuters.

34 34

Source: eThekwini Transport Authority, 2014

Page 35: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

Thank you

35

Page 36: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

The Port of Durban

• The Port of Durban is the gateway for more than 60% of the country’s imports and exports and the value of freight handled is 60% more than the GDP of KZN

• The port and port related businesses employ in excess of 50,000 people

• The port is also a key anchor for several industries, example the petrochemical industry

• More than 60% of the eThekwini economy is heavily reliant on freight transport

• Forecasts of freight demand indicate the need for significant expansion of port capacity

• The expansion of port capacity musty be supported by appropriate back of port infrastructure including roads, cargo processing facilities, storage areas, truck stops, etc

• Following several years of joint planning, a portfolio of projects was developed to meet future capacity requirements and improve the efficiency and effectiveness of the port and the corridor to Gauteng

36

Page 37: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

*RF = Rail Friendly Corridor

Northern Corridor

Durban-Gauteng

Gauteng-Port Elizabeth

Cape Town-Gauteng

Gauteng-East London

High forecast volume growth will put impossible strain on current transport infrastructure unless a significant road to rail shift is achieved

Actual 2012 2012 2018 2043

Road 4.5 Total 4.8 5.6 10.9

Rail 0.3 RF 2.0 2.5 5.2

Actual 2012 2012 2018 2043

Road 48.2 Total 55.3 68.3 147.4

Rail 7.0 RF 32.2 34.5 75.7

Actual 2012 2012 2018 2043

Road 11.2 Total 12.5 14.8 31.7

Rail 1.3 RF 4.2 4.7 10.6

Actual 2012 2012 2018 2043

Road 34.2 Total 36.2 42.8 86.9

Rail 1.9 RF 16.8 19.6 40.2

Actual 2012 2012 2018 2043

Road 5.7 Total 6.6 7.3 16.8

Rail 0.9 RF 3.1 3.8 9.3

Actual 2012 2012 2018 2043

Road 33.7 Total 34.6 40.8 84.1

Rail 0.9 RF 0.9 0.9 1.7

Coastal

37

Source: Transnet Freight Demand Model, 2014

Page 38: EDGE SEMINAR SIP2 Logistics and Industrial Corridor · Project Scope The project entails Pier 1 Upgrade – reclaim 14ha between Pier 1 and Salisbury and acquire 9ha of Navy land

The value of freight handled at the port of Durban is 60% more, than the GDP of KwaZulu-Natal

-

100

200

300

400

500

600

700

800

Total value of freight handled at port of Durban GDP of Kwazul-Natal

Bill

ion

Ran

ds

38

Source: GAIN, 2012