DURBAN PORT - IMPROVEMENTS, CONCESSION, SECURITY

UNCLAS SECTION 01 OF 03 PRETORIA 004199

SIPDIS

SENSITIVE

DEPT FOR AF/S/TCRAIG AND KGAITHER

E.O. 12958: N/A
TAGS: ETRD EWWT EAID ECON PINR PTER SF
SUBJECT: DURBAN PORT - IMPROVEMENTS, CONCESSION, SECURITY


(U) Sensitive but unclassified. Please protect accordingly.
Not for Internet distribution.


1. (SBU) SUMMARY. Infrastructure and process improvements
as well as new equipment are increasing efficiency at Durban
Port according to Mervyn Chetty, Executive Manager of
Corporate Strategy and Continuous Improvement at South
African Port Operations (SAPO). New cranes are expected to
double capacity and new scanners are on their way. The
Container Terminal is expected to be concessioned by the end
of the year with SAPO as part of a joint partnership
operating and managing the Terminal. Although, Security at
the Container Terminal appears adequate, security lapses at
Maydon Wharf are still evident. END SUMMARY


2. (U) A multi-billion rand project titled "Development
2005" is addressing the current capacity constraints at the
Port of Durban. SAPO Executive Manager of Corporate
Strategy and Continuous Improvement Mervyn Chetty told
Econoff that the project addresses his top three priorities
to improve the port's people, processes and equipment.

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PEOPLE IMROVEMENT
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3. (SBU) Chetty acknowledged Durban's dismal delays in
recent history. However, he said that much of this could be
attributed to the fact that the people on the ground lacked
the proper tools for the job. For instance, Chetty points
out that in 2002, just 10 percent of all container traffic
was unloaded and stacked at a rate of more than 16
containers per hour. Two years later, after increasing its
straddle carrier fleet to move and stack containers, 84
percent of container traffic is now being moved at a rate of
more than 16 containers per hour.


4. (U) Chetty also pointed out that while global container
traffic is increasing by 6 percent each year, Durban is
experiencing 8 percent growth. To handle the container
growth, shipping lines are using larger ships.
Unfortunately, Chetty says that Durban has an insufficient
number of qualified open-license pilots to steer larger
ships into port. This creates delays despite improvements
in capacity within the port. Chetty is working closely with
the National Ports Authority (NPA),which is responsible for
training harbor pilots.

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PROCESS IMPROVEMENT
--------------


5. (U) Chetty also said that improvements could be
immediately realized with slight modifications in processes.
For example, the zig-zag configuration of the Durban
Container Terminal's (DCT) quay wall accommodates only one
crane for adjacent berth numbers 202 and 203. This prevents
ships docked concurrently at the two berths from unloading
simultaneously. While one ship is unloaded, the other ship
waits, inefficiently occupying limited berth space. In
addition, the stacking configuration at these berths only
allowed a maximum of 10,000 containers. After some
analysis, Chetty staggered the arrival and departure times
of ships assigned to 202 and 203 so that while one ship was
docking and securing moorings, the other was being unloaded.
This allows the DCT to turn ships around much more quickly.
In addition, Chetty's modifications of the stacking
configuration for containers - taking them higher and
storing them further down the quay wall- increased the
storage capacity to 15,000 containers.


6. (SBU) Chetty is also working with U.S. Customs and
Border Protection inspectors assigned to Durban as part of
the Container Security Initiative (CSI) to improve the
process of scanning containers at Durban's lone scanner.
Members of the CSI Team at Durban Port told Econoff that the
disjointed process for identifying and delivering a
container from the Terminal to the scanner is causing delays
resulting in many containers being short-shipped (missing
their assigned ship). They said that when CSI identifies a
container, DCT employees retrieve it from the stack and
deliver it to the Terminal gate. The shipping agent must
then send a truck from one side of the harbor to the
Terminal to transport the container 100 meters to the
scanner. After being scanned, the truck returns the
container back to the Terminal. DCT employees must then
retrieve it from the gate and return it to the stack. In
addition to the transportation inefficiencies, the process
of moving the container to and from the secure terminal
requires additional documentation, which can add to the
delays. The CSI team has suggested to Chetty that DCT
workers convey the container from its stack directly to the
scanner and back to the stack.

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EQUIPMENT IMPROVEMENT
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7. (U) Durban has recently added three ship-to-shore gantry
cranes, increasing its total to 16 and bringing the port
more in line with international best practices that call for
one crane per 100 meters of quay wall. Chetty said these
new cranes will allow the port to accommodate an expected
increase in container traffic from the current 1.2 million
TEU (twenty foot equivalent units) per year to 2.4 million
TEU per year.


8. (SBU) In addition, Chetty said that the South African
Revenue Service (SARS),which oversees Customs issues, has
purchased seven new security scanners. Three of these will
be allocated to the Durban Port and the other four will be
placed at border crossing posts. Currently, Durban has just
one scanner, which is located outside the Container
Terminal. This creates huge bottlenecks as the South
African Police Service (SAPS),the NPA, and the U.S. CSI
team send containers to be scanned for illegal contraband.
By late morning, the single lane Bayhead Road is backed up
by over a mile, creating gridlock at the Terminal. The
addition of extra scanners will allow a dedicated scanner to
be located inside of the DCT. Chetty could not provide
Econoff with a definitive delivery date.

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OTHER PORT PROJECTS
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9. (SBU) Durban has just completed a major expansion of the
quay wall at the port's Point area on the city side of the
harbor. The new expansion will accommodate three more
berths which will be used for multi-purpose cargo,
relocating from Pier 1 (adjacent to the Durban Container
Terminal) This addition will allow the DCT to expand into
Pier 1 and increase its capacity by facilitating more
container space at the Terminal. Chetty said the berths
should be operational by early 2007 after the new area has
settled and the surface been paved. Chetty said that the
NPA is also considering annexing Salisbury Island (adjacent
to Pier 1) into the DCT expansion. In addition, the
Passenger Terminal will be relocated to the new Point quay
wall where tourists will have access to the oceanfront and
the new uShaka Marine World theme park. Port authorities
also speculate that the Port may expand into the space
currently occupied by Durban International Airport if the
airport is moved north to the Dube Trade Port.


10. (U) The widening of the Durban harbor entrance is also
scheduled to begin early next year. The project will widen
the channel into Durban Bay from about 130 meters to 220
meters by relocating the breakwater (North Pier). At the
same time, the entrance channel and subsequent channels
within the Port will be deepened from about 12.8 meters to
as much as 18 meters to allow access for larger container
ships capable of carrying 6,500 TEUs.


11. (U) Chetty also recognized that congestion is a problem
on Maydon Wharf Road and Bayhead Road into the Durban
Container Terminal. He said that the city is scheduled to
begin construction on an interchange from Bayhead Road to
the freeway, allowing port authorities to close public
access to the Maydon Wharf Road. In addition, plans are in
the works to widen Bayhead Road into the Terminal and to
create parking along the side of the road.

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DURBAN CONTAINER TERMINAL CONCESSION
--------------


12. (SBU) The SAG would like to have its tender for a
concession of the Durban Container Terminal in place by the
end of 2004. Chetty believes that SAPO's improved
performance over the past 18 months is proof that it can
effectively operate the port. What SAPO lacks, according to
Chetty, is management experience. A senior Public
Enterprise official confirmed to Econoff that the concession
of the DCT will be a joint partnership with SAPO. (NOTE: US
company CSX is expected to be a major contender for the
terminal concession. END NOTE)

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SECURITY
--------------


13. (SBU) The NPA has recently installed a high fence
around much of the port. A second checkpoint at the Point
has improved access control to those berths. However, Rob
Gardner, an agent from ISS-Voight Shipping and former-
President of the Shipping Lines Association, told Econoff
that in his opinion, fencing is an inadequate security
measure. He said that closed-circuit television (CCTV),
human security, and restricted access protocols are needed
to create a more secure port.


14. (SBU) Private vehicles can easily access the Maydon
Wharf area. Econoff observed shipping lines unloading
containers on the street along Maydon Wharf, which could be
accessed by unauthorized persons. Although the NPA has
required shipping lines to hire security to prevent access
to ships and cargo, Econoff observed instances where the
security was lax, inattentive, and sometimes not present.
Gardner explained that the NPA does not have much leverage
in enforcing the security plans. If shipping lines fail to
provide adequate security then the NPA is responsible to do
so. Gardner said he did not think the NPA has the capacity
to provide security. In addition, it is difficult for Port
authorities to restrict access to the area because private
companies are located there.


15. (SBU) Durban's Container Terminal has much tighter
security than the rest of the port. Bongi Nzuza, Protection
Services Manager at the Terminal, told Econoff that in his
four years at the Terminal is has removed dishonest
employees and placed cameras at the entrance to photograph
drivers and containers entering and exiting the Terminal.
Nzuza said he has also increased training for his security
staff and that, as of mid-July 2004, only credentialed
individuals may enter the Terminal. Nzuza is also looking
into implementing CCTV cameras throughout the Terminal. He
said that there have been no thefts of containers in the
last five years, something that was previously commonplace.
Nzuza also noted an increased police presence since the
Container Security Initiative was implemented in December

2003.

FRAZER