SOUTH AFRICA– South Africa’s rail operator Transnet has announced its intent to enter into a fifteen-year concession agreement with agribusiness major AFGRI Operations for the operation and maintenance of landside operations with Transnet Port Terminals in South Africa, reports Fin 24.
The agreement will focus on two strategic agri-ports in the country, the East London Grain Elevator in the Port of East London and the Durban Agri-Port at the Port of Durban.
This initiative between Transnet and AFGRI will breathe new life into the two terminals through refurbishment, funding, and marketing projects, according to Transnet.
Agri-ports are regarded as strategic facilities for the country, impacting on critical needs such as food security, transformation and long-term growth within agricultural logistics.
The lack of capital investment as well as a decline in market share has pressed Transnet to look for a private sector partner to turn these facilities into integrated and efficient agri-logistic supply chain services. This will complement existing providers in Durban.
The fifteen-year contract with AFGRI will allow the company sufficient time to recoup its capital investment, which is currently required to give the terminals a face-lift and install the necessary processes to ensure efficiency.
In addition to this, AFGRI will be in charge of customer engagements, contracting maintenance, repair and overhaul of the terminals’ landside equipment and plants.
Transnet Port Terminal, among other things, will provide the funding needed to restore or reconfigure the quayside plant and equipment and provide efficient rail capacity for private sector partners.
This partnership will also further strengthen Transnet’s road-to-rail strategy, which is already witnessing a slight volume increase in the Port of East London.
The Durban Agri-port is one of the three agri-bulk terminals in the Port of Durban. The other two terminals are operated by South African Bulk Terminals and Bidvest Bulk Terminals respectively.
Both AFGRI and Transnet Port Terminal will be in charge of planning and scheduling of landside and quayside operations, health and safety as well as legal matters.
It is intended that the two partners’ operations will be integrated from April 2019.