State-owned freight logistics group Transnet has reiterated that funding for the proposed R75-billion Durban dig-out port (DDOP), which is earmarked for development at the city’s old international airport site, is not included in the group’s current R300-billion capital budget and that it will have to be pursued as a public–private partnership (PPP).

Speaking at the official handover of the site from Airports Company South Africa (ACSA) to Transnet in December, Public Enterprises Minister Malusi Gigaba said the implementation of the “ambitious” plan would require “real and meaningful partnerships between the public and private sectors in order to unlock their common balance sheets for the good of the country and our economy”.

He said there was already a palpable private appetite for Transnet’s existing infrastructure pipeline, both from those domestic and foreign investors who had bought Transnet bonds, as well as from equipment suppliers and contractors. Therefore, the expectation was that private funders and port operators would “come to the party”.

Transnet CEO Brian Molefe stressed that, while the project had not been included in the seven-year market demand strategy, Transnet was committed to preparing the way for a project that could be packaged to private investors, possibly as a build-operate-and-transfer scheme.

The final PPP model had not yet been finalised, but transaction advisers had been appointed and should deliver options by the end of February. The consortium appointed to interrogate the models included Maritime Transport Business Solutions, Arup and Van Velden Pike Attorneys.

In the meantime, Transnet would be proceeding with parallel technical and environmental studies, as well as with the community engagement processes required before any construction can begin.

Group planning and monitoring executive Mark Gregg-MacDonald reported that, under the current schedule, the first four- berth phase of the project was expected to start in 2016, with commissioning proposed for 2020.

Envisaged is the creation, in four phases, of Africa’s largest deep-water container terminal, capable of handling 9.6-million twenty- foot-equivalent units (TEUs) through 16 berths by 2037, and incorporating an automotive terminal and a liquid-bulk handling facility by 2050.

The port would complement the existing container handling facilities at the Durban harbour, whose growth was constrained owing to the encroachment of the city and the water depth.

It would also cater for expected container volume growth, currently calculated to expand from four-million TEUs in 2010 to 20-million TEUs in 2040. Demand for container capacity in Durban was expected to grow from 2.5-million TEUs currently to 12-million TEUs over the period.

Work was also proceeding on the legislative processes required to have the brownfield site promulgated for use as a sea port.

The proposed development had already attracted some criticism from surrounding communities and environmental lobby groups, who argue that there has been too little consultation.

But Gregg-MacDonald said full and thorough consultations with affected stakeholders would begin this month and that consultants would be appointed soon to conduct the environmental-impact assessment.

Although it is a brownfield site and a former international airport, there are believed to be more than 2 000 chameleons and 11 black mambas inhabiting areas that could be excavated for a new deep-water harbour.

Gregg-MacDonald stressed that no money had been budgeted for the project beyond the R1.85-billion allocated for the acquisition of the land from ACSA and the early-stage engineering design and environmental studies.

Once promulgated as a harbour, though, Transnet National Ports Authority would automatically become the ports authority at the facility.

Molefe indicated that the promulgation process was likely to take two years to complete and would be a necessary first step prior to calling on the private sector to offer proposals on the development of the DDOP.