Namibian Ports Authority (NamPort) Chief Executive Officer, Bisey /Uirab, who is driving a multi- billion dollar expansion of the Walvis Bay Port to increase the quantity of goods handled at the port engages in a one on one interview with Prime Focus Magazine’s Managing Editor, Tiri Masawi, to outline the progress made on this development as well as its impact on the local economy. NamPort is expanding its ports as part of the country’s Vision to make Namibia a transport and logistics hub by 2030; catering for all the Southern African countries that do not have access to the sea. The following is a full transcript of the engagement with Mr. /Uirab
Prime Focus: With the progress being made through the expansion and improvement of the port in Walvis Bay. What are the most likely national economic gains associated to this project?
/Uirab: Port development serves as a funnel for economic development because it acts as catalyst for economic development to take place. The economic benefits of port development is generally measured by indicators such as value added, employment creation, revenue, taxation and return on investment.
In our case, the new terminal development is expected to create additional jobs, inside the port but also within the port community such as stevedores, transport service providers, ships chandlers and freight forwarders as a result of increased volumes that we expect to handle. Port land in the existing terminal will free up to attract current and potential new investors, in the bulk and break bulk cargo sector, more so the manufacturing and agricultural industry. By putting up shop inside the port, these businesses should be able to reduce their cost of doing business and offer competitive prices to clients which in turn will attract more volumes through our port. The provision of a dedicated cruise liner terminal presents opportunities for the tourism sector because cruise liners can now stay longer than before.
Prime Focus: Do you think upon completion of the port expansion NamPort will be strategically positioned to compete with Beira, and Durban Ports?
/Uirab: We as ports in Southern Africa do not see ourselves competing against each other but more complementing each other for the common good of the SADC Region and by bringing the cost of doing business to an acceptable competitively international level. The new port development will enlarge the port options SADC and international customers can choose from when deciding which port to use for imports, exports or transhipments.
Prime Focus: How will the port expansion improve the level of cargo handled?
/Uirab: The growth in ship sizes and growing level of ship specialization such as bulk carriers car carries and containerships allows shipping lines to better achieve economies of scale. The new terminal development will allow us to accommodate larger vessels with increased number of containers.
Trade volumes place a significant role in the efficiency of a port. With the new development we will increase our container storage capacity from 350 000 TEU’s per annum to 750 000 per annum. The additional capacity combined with the introduction of new container handling technologies and process efficiencies will allow us to eliminate port congestion and significantly improve ship turn- around times and improve the overall efficiency of the supply chain.
The new development will eliminate port congestion and long turn-around times and improve the overall supply chain efficiency.
Prime Focus: How much cargo was handles during the 2014 financial year?
/Uirab: During the 2014/15 financial year we handled a total of 6,150,387 tonnes of cargo.
Prime Focus: NamPort also being a technical operation how does the company deal with the shortage of skills?
/Uirab: The maritime industry is one specialized industry requiring highly skilled and expertise to operate effectively and efficiently given our competitive and volatile environment we operate in. To address this challenge, NamPort has a recruitment strategy that focuses on attracting and retaining critical skills required for our industry. This includes;
NamPort Bursary Scheme: to students pursing studies required for our industry such as Engineering, Informational Communication Technology (ICT), Logistics, Maritime law and other vocational related programs.
Catch-Them-Young initiative: this programme avails full scholarships to young, talent and deserving Namibians at Grade 10 school level for three year Maritime studies at the Lawhill Maritime Centre in Cape Town, South Africa. The Programme is aimed at preparing young qualifying Namibians for careers in the Maritime industry, in respect of Navigation and marine engineering. Thus far we have two young Namibians who have completed the program and on our internship program.
Seafarer training: this initiative offers sponsorships to young qualifying Namibians aspiring to become either Deck Officers (navigational) or Marine Engineering Officers. The programme combines tertiary / and or academic with practical sea time exposure required for appointment in our marine department. Our current Namibian Port Captain and Marine Manager came through this program.
Leadership skills development: leadership developments forms an integral part of Namport’s human capital strategy. In this respect, a succession plan for critical roles has been developed. Current incumbents and potential future successors have been enrolled on accelerated leadership programmes with reputable business schools. This program ensures the readily supply of the required leadership of the organisation.
PF: What modalities has NamPort put in place to make sure that Namibians benefit from the port expansion?
/Uirab: As part of the contractual obligations, the main contractor, China Harbour Engineering Company is required to procure at least 30% of goods and services required for the project from Namibian companies. They are also required to employ Namibians in positions for which skills are locally available as well as provide on the job training to Namibians.
Prime Focus: Are we still on target to meeting the completion of the port expansion and please give an insight of what has been done so far?
/Uirab: The project is well on schedule and the new terminal is scheduled for commissioning by mid-2018. The project is 50% completed and we have achieved the following key milestones.
Prime Focus: The uranium industry has been going through challenges owing to plummeting or unstable pricing in the past, does this not worry you since some of them utilise the port?
/Uirab: Despite a decline in the prices of most mining commodities including uranium, we have not noted any decline in volumes relating to this business. Based on current information we do not foresee any major changes on uranium exports from Namibia
Prime Focus: Upon expansion of the port won’t the country reduce the Lüderitz port to a white elephant?
/Uirab: The Port of Lüderitz serves a different market and will continue to play a strategic role in the growth of the economy of the south of Namibia and the Northern Cape Province of South Africa.
Prime Focus: How frequent do you as NamPort boss engage with some of colleagues for example from Mombasa port, Durban or even Beira to share notes and improve operations?
/Uirab: NamPort has cordial relations with ports in the sub Saharan Africa and CEO of NamPort serves as chairperson of PMAESA. Meeting with counterparts take place at least twice annually during PMAESA board and council meetings, and at times more than that based on bilateral engagements.
Prime Focus: What do you think are the major challenges facing NamPort at current?
/Uirab: Weakening of local currency against major foreign currencies have increased the prices of goods procured from overseas and inhibited the appetite of local and regional importers and exporters of goods.
Decline in oil prices affecting oil producing economies such as Angola and subsequently the demand for imported goods and services.
Depressed mining commodity prices which resulted in the lower output production and closure of mines in some cases have reduced export volumes.
Prime Focus: The expansion of the port also includes giving other landlocked countries like Zimbabwe and Botswana land to receive their cargo how is that process progressing?
/Uirab: We no longer believe they are landlocked countries as we have released them through dry port initiative.
• Botswana dry port is up and running
• Zambia dry port is up and running
• Zimbabwe dry port is busy with construction
Prime Focus: What do you think have been the major success that NamPort achieved in the past five years?
/Uirab: Completed the Port of Walvis Bay Port Optimisation Project which increased the water depth at Berths 1 to 3 and the entrance channel from -12.8 metres to -14.0 CD and which enabled -
Commencement of the construction of the Port of Walvis Bay New Container Terminal on 40 hectares of reclaimed land which terminal which will increase capacity to handle TEUs by 750,000 TEUs per annum. This project is now 50% complete.
Initiated the development of a deep water port area at Angra Point in Lüderitz and applied for extension of Lüderitz port limits to accommodate same. A cadastral survey of the area has taken place and the next step is an Environmental Impact Assessment.
Acquired port lands of 1330 hectares north of the current port from the Municipality of Walvis Bay. Construction of a new Liquid Bulk Terminal project is the first phase of this development and this project is now 20% complete.
Developed a Port Technology Master Plan and completed a Port Automation Study which has identified and accommodated long-term ICT requirements at our ports
Launched the multi-shift system in key operations at the Port of Walvis Bay to provide a 24/7 service to customers
Substantially increased our asset base: In 2015 Namport’s total assets totalled N$5.6 billion compared to N$2.6 billion in 2011.
Employment creation: Our workforce number crew from 692 in 2011 to 1006 currently.
We continually ensure the availability of critical skills and the development of females through various learning and development programmes including the Bursary Scheme, Seafarer Training, “Catch them Young” and specialized training to the extent that we send employees on masters and PhD training related to the maritime industry and in so doing raise our profile nationally and internationally..
NamPort indirectly created employment for Namibians and empowerment of SME’s through our procurement policies, more specifically restricting tender awards to 51% Namibian ownership with 30% previously disadvantaged ownership or confine eligibility of certain tenders to SME’s only.
Prime Focus: In terms of worth what is the value of cargo that NamPort has handled in the past five years and please give also an annual breakdown?
/Uirab: NamPort is not privy to the value of cargo passing through our ports. These declarations are done to Customs & Excise for the purposes of import and export tax collection.
The table below illustrates the total cargo volumes handled over the last five years.
NamPort operates in the economic and productive category of public enterprises and as such must be commercially viable. In this respect, the key drivers of Namport’s strategy and sustainability are the expectations of our Shareholder (the Government of Namibia) and of our customers.
In terms of Shareholder expectations, our Nation has a Vision which it wants to achieve by 2030, supported by a National Development Plan, with one of its most critical goals being economic growth with attendant job creation and alleviation of poverty. NamPort makes a major contribution towards achieving the desired outcomes in the Strategic Areas of Logistics and Public Infrastructure, but it also contributes to other strategic areas. One of the most exciting objectives stemming from the Logistics outcome is the development of our country as a logistics hub with the Port of Walvis Bay being the main spoke in this hub.
To further secure the achievement of the overarching objectives of our Nation’s Vision, our country has developed various plans and strategies in synergy with the National Development Plan. One of these complementary initiatives is the Growth at Home Strategy which focuses on industrialization, manufacturing and value addition.
Another is the soon to be launched Harambee Prosperity Plan which embraces a targeted approach to significantly reduce poverty and inequality and spans the financial years 2017 to 2021. The broad parameters of the Plan are supported by the following pillars –
• Social Development
• Effective Governance and Service Delivery
• Economic Development
• Infrastructure Development
The socio-economic aspirations of Growth at Home and Harambee have also been amplified in the recently enacted Public Procurement legislation which adopts preferences for Namibian-produced goods and services.
The expectations of our Customers, which are predominantly major shipping lines like Maersk and CMA CGM, continue to focus on productivity, reliability, efficiency, and cost effectiveness. In addition, the trend to megaships is here to stay resulting in larger vessels being cascaded to other trade routes, especially along the Europe-South Africa trade route. This is a burden on our ports as they have to heavily invest in infrastructure to accommodate such larger vessels with no guaranteed return on investment nor increase in volumes. In addition, larger vessels equate to fewer vessel calls resulting in business peaks. The challenge is to mitigate the risk of reduced cash flows arising from inflexible labour costs incurred due to the continuous shift system operating during business troughs. Currently, the average container vessel size is 8,000 TEUs, however, 89% of the world order book is in respect of vessels of more than 8,000 TEUs. The Port of Walvis Bay can handle 5,700 TEU vessels at its container terminal. We must also remember that larger vessels also place pressure on the hinterland logistics of rail and road with congestion being a very unwelcome and costly side effect.
And finally, we also have the expectations of our workforce and the communities in which we operate. We pride ourselves on being a socially responsible enterprise - we look after our people by not only ensuring they are fairly remunerated and respected, but also that they work in a safe and healthy environment. We care for our communities by carrying out our operations in a safe and environmentally friendly manner, supporting various community upliftment projects and providing financial assistance for education.
Now, as you know, the highway to prosperity in Namibia is currently not paved smoothly but at times is punctuated with potholes which we must repair and we may even need to divert our highway to accommodate a changed vision. Currently these potholes are poverty, youth unemployment, water shortages, lack of affordable housing, and education shortfalls. The economic situation has been exacerbated by the drop in the oil price, the slump in commodity prices, the slowdown in growth in China, and weakening of the Namibia Dollar against major currencies. This forex experience has a pronounced negative impact not only on the cost of our imports but also the contract sums payable in terms of our foreign currency based major contracts, for example the New Container Terminal EPC Contract.
Our cargo volumes have sharply declined with concomitant decrease in revenue, but at the same time operating costs are increasing. The global container market is growing at a slow pace with a modest growth of 3.3% worldwide, and 3.8% in Africa, predicted for 2016. As a port we deal with a lot of economies along the West Coast of Africa, more especially the oil reliant economy of Angola which has been seriously affected by the drop in the oil price resulting in a drastic reduction in imports through the Port of Walvis Bay to Angola.
Southern African ports continue to aggressively drive port expansion and transport corridor development. Our Namibian ports are competing for the same hinterland business as our neighbouring ports – cargo to and from Zambia, Zimbabwe, Botswana, and the DRC – and to remain relevant in the SADC Region, Namport has to ensure that our port infrastructure is on par, if not better, than the competition.
In this stressful time of a marked downturn in business, our dilemma is to strike a balance between satisfying the expectations of the various stakeholders and ensuring we sustain a healthy balance sheet and cash flows. More importantly, we must strive to maintain and improve our port of call status in Southern Africa and continue to provide a strong foundation for the establishment of the Namibia Logistics Hub.
So taking into account all the above scenarios and constraints, we fine-tuned our strategy and focused on projects which develop capacity to service both container and general cargo current and future demands and ensure our ports are competitive in the SADC Region, whilst at the same time endeavouring to support the attainment of the socio-economic imperatives of our Shareholder.
In terms of long-term development our key achievements have been –
• Developing container capacity for the future : New Container Terminal Port of Walvis Bay
About 50% of construction of the New Container Terminal at the Port of Walvis Bay on 40 hectares of reclaimed land has been completed. This infrastructure will enable us to accommodate the larger and longer container vessels as well as efficient ship-to-shore cranes. The terminal will have two berths of 600 metres in length, have a -16.0 CD water depth, can accommodate container vessels of 8,000 TEUs, and be able to handle 750,000 TEUs per annum. The terminal will be commissioned in early 2018.
• Developing bulk and break bulk capacity for the future
Once the New Container Terminal comes on stream, the current container terminal will be utilized for multi-purpose cargo which will create the opportunity for increased bulk and break bulk business in that larger cargo vessels can be accommodated at the existing container terminal berths.
The most prolific development in terms of increasing capacity and expanding our Port of Walvis Bay footprint is undoubtedly the SADC Gateway development which is situated further north from the current port area. There is a growing demand for the import and export of bulk commodities in SADC and this port area will be ideally suited for this purpose. The 1330 hectare development will be the key spoke in the Namibia Logistics Hub and will be a major port gateway serving the “shopping mall” of SADC countries. This development was kick started by the construction of a Liquid Bulk Terminal by the Ministry of Mines and Energy in 2015. This terminal, which is 20% complete, will provide two 60,000 DWT tanker berths and includes dredging the entrance channel and turning basin. Namport has initiated the feasibility study process for the establishment of a Multipurpose Bulk Terminal accommodating under 10 million tonnes per annum at the SADC Gateway.
• Harnessing the efficiencies of Port Automation
A Port Automation Study has recently been completed and one of the key outcomes of this Study is the provision of a Port Community System at the Port of Walvis Bay. Through this system information interchange between customers will be streamlined through technology thereby improving efficiency and productivity levels. The next step is to draft the Port Community System concept.
• Increasing throughput cargo at the Port of Lüderitz
• The construction of a new port rail network at the Port of Lüderitz, which connects to the Aus- Lüderitz railway line, was completed in February. We have, however, advised the relevant authorities that for the rail from Aus to Lüderitz port to offer an optimal transport solution, the 42 km of between Sandverhaar and Buchholzbrunn requires urgent attention
• The first containerized grape exports through the Port of Lüderitz took place in December 2015 and it is foreseen that this will be an annual event
• We have commenced with a feasibility study relating to the extension of the main quay wall at the Port of Lüderitz by approximately 30 metres. This will enable the port to accommodate longer vessels as well as more smaller vessels simultaneously
• There is potential for exporting manganese ore from the Northern Cape of South Africa through the port
In terms of our social-economic contribution, we are proud of the following achievements –
• We increased our workforce from 854 employees in 2014 to 1,011 in January 2016. Some of our major infrastructure projects have also had a great spin-off in terms of job creation.
• In December 2015 we fully implemented a multi-shift continuous shift system in critical operations of marine, containers and security – that is provision of a 24/7 service to our customers at the Port of Walvis Bay
• Namport is exploring various interventions to further enhance the housing benefit of our workforce.
• Localising and diversifying our supplier base –
• We introduced a tender qualification criteria of 51% Namibian Ownership, of which 30% is previously disadvantaged.
• During the past six months our percentage procurement OPEX spent on –
• Namibian registered / owned
businesses : 65% (N$129,052,898.00)
• Namibian SME owned suppliers : 9% (N$ 18,344,223.00)
• Namibian BEE/BBBEE owned suppliers : 49% (N$ 96,225,696.00)
• To date in respect of the construction of the New Container Terminal –
• Total Namibian spend : 16.48% (N$ 567,408,632.00)
•Total Previously Disadvantaged Namibian spend : 1.55% (N$ 53,393,331.00)
•Total Namibian SME spend : 1.19% (N$ 41,149,224.00)
• Namibians trained : 152 persons
• We are making great strides in terms of providing innovative learning and development programmes to ensure 100% availability of critical skills and more specifically the development of females.
• Since 2008 Namport has sponsored 30 external Bursary students (16 males, 14 females) in various port related studies –
• Civil Engineering – 6
• Mechanical Engineering – 6
• Electrical Engineering – 1
• Electronics and Communications Engineering - 1
• Supply Chain, Logistics, Transportation – 7
• Accounting and Finance – 3
• Information and Communications Technology – 3
• Law – 2
•Environmental Studies – 1
• Vocational education has also received attention through the award of 11 apprenticeship bursaries (8 males, 3 females) in the fields of –
• Mechanic Instrumentation – 1
• Mechanic Petrol and Diesel - 1
• Millwright Electrical - 4
• Electrical General - 2
• Boilermaker -1
• Fitter & Turner -1
• Welding and Fabrication -1
On the Marine side, deck and engineering officer training has been sponsored through our Seafarer Training Scheme which boasts 6 cadets (3 males, 3 females) with four participating in the deck officer training and two in marine engineer training;
Furthermore, in terms of maritime studies, Namport has sponsored six students (4 males, 2 females) to participate in our Catch them Young secondary school nautical studies programme at Lawhill Maritime School in Simonstown, South Africa. This programme serves to attract young people to a maritime career by exposing them to nautical studies during the latter half of their secondary school studies (Grade 10 to 12). Two of these students have graduated and will be furthering their studies at University.
Seafarer training will be further enhanced through the envisaged establishment of a Namibian School of Maritime.
• Development of a cruise terminal at the Port of Walvis Bay, which can accommodate one 300 metre LOA passenger ship, and provision of a passenger landing barge at the Port of Luderitz. In the past six months the number of passenger vessels calling at our ports were 31 compared to 13 the same period the previous year.
• Namport’s support of marine tourism has been showcased by the proposed development of the Walvis Bay Waterfront and Marina. At this stage certain project zones have been identified for private development and in due course expressions of interest will be invited in this regard.
• At the same time we have not lost sight of the empowerment of our female colleagues and various development paths and mentorship programmes are being progressed to bring more women onboard the Namport ship with an aim to eventually achieve our target of 50:50 gender representation.
Let me end this briefing by asking all of us to support our President, and our Nation, by wholeheartedly embracing the concepts of “our Namibian House”, “Harambee”, “no-one should feel left out” in the spirit of the Namibia – my Nation my Pride campaign.