Clarity on container terminal concessioning

There have been questions, and requests for clarity about Namport’s decision to give a foreign port container terminal operator the steer to manage its N$4,2 billion container terminal at Walvis Bay.

In response, the ports authority published a Q&A on its website that addresses some of the key questions. Erongo attempts to share some of these with our readers.

Q: Do Namibian companies not have the capacity to manage the new container terminal (NCT)?

A: There is presently no company in Namibia which has that capacity. Namport is looking for an international operator who has the proven capability to bring the much needed volumes of transshipments to Namibia to drive the profitability and sustainability of the NCT. Global operators have strategic relationships with shipping lines which give them leverage to push for the use of the terminal by these shipping lines and so increase the volumes of containers handled there.

Q: Can Namport ensure job security for those currently employed at the NCT?

A: One of the main objectives of the process is to protect the current jobs of Namport employees at the NCT and develop opportunities for more new jobs for Namibians. Without business at the NCT, Namport cannot ensure job security, hence the decision to get an operator, who will bring more volumes to keep workers busy, guaranteeing their employment, and create more jobs. A condition of the concession is that the operator will be required to maintain or better the current terms and conditions of employees at the NCT.

Q: Is Namport selling the New Container Terminal?

A: It is not being sold. An operator is being appointed to manage and operate the handling of containers at the NCT, but it will remain the wholly owned property of the Namport and ultimately the shareholder, being the Namibian government. Concession entails a specialized lease arrangement where the operator runs the terminal, making volume related payments during the tenure of the concession, introducing additional capital for investments and driving operational efficiencies in the business.

Q: How will the concessioning affect the Ports/Namibia’s rating for future investments?

A: The concessioning will present Namibia as a very attractive and friendly destination for foreign direct investment and hence increase the number of foreign investors who will seek to come and do business in Namibia. The concessioned terminal will receive much more international vessels which will enhance Namibia’s connectivity to international markets and further enhance the use of the NCT by regional importers and exporters. This will significantly increase the value accruing to the Namibian economy from retail, accommodation, transport and logistics sectors amongst others as these users of the NCT will need various services as they move their cargo through Namibia.