South Africa reorganises ports structure in an attempt to improve its efficiency

South Africa has started a process of reorganisation of its port, railway and pipeline infrastructure by establishing a National Ports Authority.

The reform, which has been announced by the South African President Cyril Ramaphosa, is based on the principle of separation between the roles of the infrastructure owner (so-called “landlord functions”), which will be covered by the new Transnet National Ports Authority (TNPA), while the terminal operator functions (e.g. loading, stowing and discharging of cargo), will remain under the control of Transnet Port Terminals, both entities established as operating divisions of Transnet SOC Ltd., a public company whose capital in entirely owned by the South African government that provides integrated services in the ports, freight rail and pipelines sectors. However, TNPA will operate as an independent entity with autonomous decision-making powers.

The South African model of management of railway, sea and pipeline transport services has been a model for many African countries, including Kenya, that end of 2020 announced the integration of ports, railway and pipeline services under the Kenya Transport and Logistics Network (KTLN), a parastatal entity established with the Executive Order No. 5 of 2020, issued on 7th August, 2020.

More specifically, the Presidential Order No. 5 of 2020 mandates the Kenya Ports Authority (KPA), Kenya Railways Corporation (KRC) and the Kenya Pipeline Corporation (KPC) to integrate their operations with the Industrial and Commercial Development Corporation (ICDC), another government parastatal whose primary objective is to promote the growth of the local economy by facilitating Kenyan investments in the economy of the country, and by providing financing to Kenyan businesses and manufacturers.

KTLN, rather than a merger, is a superstructure that is supposed to synchronise the operations of these strategic state corporations, but its establishment has aroused conflicting opinions especially by port workers, who are worried that this will lead to a loss of jobs, especially at the port of Mombasa.

It only remains to be seen if Kenya and other African countries that have been inspired by the South African model will change their choices regarding the future organisation of their port infrastructure, as the model has now changed.