BEE at the National Ports Authority of South Africa Presenter Siyabonga Gama, CEO
The National Ports Authority of South Africa
Who Is The NPA? u The National Ports Authority of South Africa owns and manages all seven commercial ports on the 3 300 -km South African coastline. These ports are Richards Bay, Durban, East London, Port Elizabeth, Mossel Bay, Cape Town and Saldanha. u As landlord it is responsible for overseeing all aspects of port infrastructure development, leasing of port property and maintenance and marine activities u The company generate a profit of approx R 1. 9 bn in profit annually u We are building the eighth port next to Port Elizabeth in the Eastern Cape…the Port of Ngqura
The Business Of NPA Landlord Services u Property management u Planning and development u Safety, Health and Environment u Engineering u Security Services Maritime Services u Marine Services u Ship Repair Services u Lighthouse Services u Dredging Services
Serving The South African Economy u The efficient running of ports is important to the wellbeing of the economy of South Africa u The ports handle 98% of the countries exports and imports (212 m tons in 2003) u The ports are the primary conduit for trade, serving as the gateway of the world to the Southern African economy u 2 years old organisation, with new personality, new vibrancy, new corporate footprint and fresh dedication to embrace business development challenges whilst addressing a transforming society’s needs and aspirations.
. . . Saldanha Cape Town . . . Richards Bay Durban East London Ngqura Port Elizabeth Mossel Bay
Deepwater ports Richards Bay § SA’s major bulk port handling 65 million tons of coal and 30 million tons of general cargo exports § 2 nd largest bulk coal terminal in the world and world class operations § Also provides multipurpose and bulk metal terminals Saldanha § Second bulk port exporting some 24 million tons of iron ore and importing around 4 million tonnes of crude oil § Other exports include base metals, finished steel products and chemicals
Hub Ports Durban § Busiest container port moving 1. 4 million TEU’s in 2002 § Major handler of liquid bulks and other commodities such as grain, fruit and forest products § Its 525 000 tonnes sugar terminal is the biggest in the world § Ship repair facilities are offered Cape Town § § § Geographic position at crossroads of international sea routes Single major export is fruit from the Western Cape region Also boasts a significant container terminal Important base for fishing industry Multi purpose, dry and liquid bulk terminals as well as fully serviced dry docks
Multi-purpose ports Port Elizabeth § Major fruit terminal § Manganese ore is next biggest export commodity § Entry point for the motor car industry while also an exit for fullybuilt vehicles to the Far East London § Only commercial river port in the SA port system § Boasts largest grain silo in southern Africa § Grain; primarily maize, is the most important single product exported through the port Mossel Bay § Specialised port serving local inshore and deep-sea fishing industry § Offshore oilfields and inland gas refinery are serviced here
Total Cargo Handled Per Port 2002/2003
Nature of Cargo Handled 2002/2003
Port development upgrade Port of Ngqura § R 3. 2 b greenfield development of new port in the Eastern Cape § Key port to unlocking potential of 12 ha Coega Industrial Development Zone § new addition to our deepwater port at depth of 16 metres to handle new generation large ships § Will provide two container terminal berths and three for general and bulk cargo (phase 1) § Delivery date is September 2005
Port development projects Port of Durban § R 1. 6 bn upgrade of Container Terminal and reconfiguration of the port § Redevelopment of Maydon Wharf § Widening of harbour entrance commencing during 2004 § Possibility of mix-use facilities to support a passenger terminal for the cruise ship industry Port of East London § R 10 m towards deepening car terminal berth Port of Richards Bay § R 300 m investment to extend the coal terminal to handle additional capacity § Addition of a ship repair facility (dry dock)
Port development update Mossel Bay § NPA is currently conducting a study to investigate the possibility of expanding the port and ensuring infrastructure integrity, although this is intertwined with the fortunes of Petro. SA in the main Cape Town § R 550 m towards a Container Terminal Expansion program to meet future space demand § Ship repair facility linked to the growth of oil and gas industry off Africa’s west coast Port Elizabeth § Possibilities around the accommodation of Waterfront developments by making the port more people and cargo friendly
Port development update Port of Saldanha § R 30 million infrastructure maintenance and renewal throughout the port § Recent extensions to multipurpose terminal – additional berths to handle increased capacity § Expansion of ore terminal, alterations to oil jetty as well as infrastructure linkages to hinterland Security upgrade § R 200 m towards enhanced measures at all ports – retraining of security personnel, fencing and access control, high tech installations of CCTV § Port Control - meeting AIS challenges and requirements § Meeting compliance to ISPS Code of the IMO
Strategic Direction u NPA’s strategic direction underpinned by the National Commercial Ports Policy and National Ports Authority Bill u The National Ports Authority Bill specifically requires NPA – To promote the achievement of equality by measures designed to advance persons or categories of persons historically disadvantaged by unfair discrimination in the operation of facilities in the ports environment – Promote greater representivity, in particular to increase the participation in terminal port operations of historically disadvantaged persons
BEE Strategy To accelerate procurement from black-owned and empowered enterprises to create new enterprises with the objective of growing existing emerging entrepreneurs to produce valueadded goods and services for the industry and increase employment
Primary Policy Objectives u Facilitate access by Black suppliers to NPA procurement activity u Ensure that an increasing portion of contracts are awarded to Black Entrepreneurs and Suppliers with a clear and evident commitment to Black Empowerment u Facilitate entry of Black entrepreneurs into port related industries u Create awareness, understanding and support for Black Economic Empowerment among NPA key stakeholders
Current Mechanisms Supporting Policy u Set aside tenders to enable Black suppliers to compete amongst themselves u Set clear targets for NPA business units to increase expenditure with Black suppliers u Give preference to traditional suppliers who implement BEE programmes u Provide early payment terms u Proactively create a bias in the process of adjudicating tenders thereby increasing the business awarded to Black suppliers
Supplier Evaluation Criteria u In supplier assessment & assessing tenders i. t. o their BEE status NPA considers the following areas: – Black Ownership: Equity ownership, Board Membership – Black Management: portion of Black executive, senior and middle management – Skills Development Programmes: implementation of mentoring and training programmes for Black workers – Purchasing from Black suppliers: may include JV’s or partnerships with Black groups – Other Empowerment Initiatives: Equity Ownership Schemes, bursary schemes, etc
Key BEE Opportunities u Construction projects: – R 1, 2 bn BEE spend expected over next 3 years (R/Bay, Durban, Ngqura & Cape Town) u Maintenance projects: – R 400 m BEE spend on electrical, dredging, marine craft and equipment maintenance e. g. floating cranes u Provision of security, cleaning and catering services, 70% set aside for BEE suppliers
Key BEE Opportunities (cont. . ) u. Supply of uniform clothing R 21 m (100%) set aside for BEE suppliers, disabled and women groups spread in all ports u. Construction of new admin buildings in Saldanha & Mossel Bay – Set aside 100% for black contractors – R 21 m u. Oceans of opportunity for BEE entrepreneurs to participate in terminal operations over the next 5 years as we seek greater private participation in our terminals
Past Achievement 2002/3 BEE EXPENDITURE Total Discretionary Expenditure BEE spend % BEE spend R 1, 209, 660, 220, 91 R 479, 730, 619, 28 40% The target for 2003/4 sits at 45% - this is a moving target and is adjusted annually as expenditure grows – 50% by 2005
Challenges Facing NPA u Construction projects remain too big and specialized u Implementation of our robust supplier development policy to achieve 50% BEE spend by 2004, and 60% thereafter u Fronting by so called “BEE” suppliers u Established white firms still prefer to deal with BEE on the basis and only for public sector work! u Entrepreneurs remain averse to access the really big opportunities, e. g. owning & running shipping lines, accessing land for value-added services
Assisting BEE Growth In Maritime Sector u Facilitate access by Black suppliers to NPA procurement activity u Ensure that an increasing portion of contracts are awarded to Black Entrepreneurs and Suppliers with a clear and evident commitment to Black Empowerment u Facilitate entry of Black entrepreneurs into port related industries e. g. warehousing, logistics park operations, stevedoring etc. u Create awareness, understanding and support for Black Economic Empowerment among NPA key stakeholders
Way Forward u Communication of major projects and initiatives prior to commencement (e. g. Ngqura & Durban 2005) u Entrenching a maritime culture amongst entrepreneurs to take advantage of coastal mines (Ports!) u A sharper focus on supplier development to create meaningful and enduring partnerships u Removing a culture of entitlement amongst some suppliers and ensuring they adopt a continuous improvement culture to drive down costs
Initiatives To Support Primary Strategic Objective u Procure at least 60% of ALL discretionary spending from BEE suppliers within the next 5 years u Constantly explore ways of increasing the amount of discretionary spending u Aggressively support the Proudly South African (PSA) campaign - use local as opposed to foreign suppliers u Pursue the ideals of the Maritime Charter
Let us continue the dialogue Call us at 011 242 4121 NPA HQ Procurement Office Thank You!
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