The plan to position Durban as a world-class cruise capital took a step forward when Transnet announced preferred bidder for the Durban Cruise Terminal – KwaZulu Cruise Terminal Pty Ltd (KCT) – a Joint Venture between MSC Cruises SA (a subsidiary of MSC Mediterranean Shipping Company SA) and Africa Armada Consortium (a black empowerment partner).
The bidder will be responsible for the design, financing, construction, operation, maintenance and transfer of a Cruise Terminal Facility for a 25-year concession period in the Port of Durban. Capital investment for the project would be in excess of R200 million.
The announcement was made by Transnet National Ports Authority (TNPA) Chief Executive, Richard Vallihu.
“Despite the pressures of the global economic climate on disposable incomes, the global luxury cruise sector remains one of the fastest growing segments in the tourism industry and has the potential to grow the economy and create jobs.
The Durban cruise market had grown from 75 947 passengers ten years ago to 191 412 passengers last season. Already we have at least 20 international cruise liners operated by 14 cruise lines calling at South Africa’s ports,” he said.
TNPA was striving to work more closely with municipalities, provinces and the tourism sector to ensure alignment between goals and planning to cater for this fast growing market. Currently vessels have been using the port’s N-Shed, which was upgraded ahead of the 2015/16 season. TNPA’s position in terms of its cruise strategy was to offer new and modern cruise terminals that would provide an ideal gateway to a unique South African experience.
He said the preferred bidder, KwaZulu Cruise Terminal Pty Ltd (KCT), had put together an exciting concept and had the experience to deliver a facility that would be the jewel in the crown of the Port of Durban. It would be an asset within Durban’s “Smart People’s Port” that would create more opportunities for surrounding communities to participate in the local economy.
“Ports are a catalyst for growth and through projects like this we begin to see government’s Operation Phakisa: Oceans Economy programme in action, which strives to unlock the economic potential of our oceans. As the national ports authority, we have a responsibility to the country to help address the three scourges plaguing South Africa – unemployment, poverty and inequality – by making business opportunities available for businesses owned by previously disadvantaged individuals to operate within the port environment,” Vallihu explained.
Section 56 projects, such as the Durban Cruise Terminal, which encourage private sector participation are a key element of Transnet’s Market Demand Strategy. With these projects TNPA enters into an agreement for the operation of a facility, in accordance with a procedure that is fair, equitable, transparent, competitive and cost effective, as stipulated in the National Ports Act.
Vallihu said this called for collaboration of role players to develop inclusive models, in the spirit of the National Ports Act, before sharing facts about the bidder.
KCT’s equity is currently divided into 70% ownership by MSC Cruises SA and 30% ownership by Africa Armada Consortium. It is classified as an EME (Exempted Micro Enterprise) and is anticipated to grow into a QSE (Qualifying Small Enterprise).
Geneva, Switzerland-based MSC Cruises SA is the world’s leading privately-held cruise company and the fourth largest overall. It is the market leader across the whole of Europe, including in the Mediterranean, South Africa as well as South America and operates globally with direct offices in 45 countries and over 180 ports. The company operates one of the more modern and technologically advanced fleets at sea. Its 12 cruise ships cruise year-round in the Mediterranean and the Caribbean. Seasonal itineraries cover Northern Europe, the Atlantic Ocean, Cuba and the French Antilles, South America, Southern Africa, China and Abu Dhabi and Dubai. In 2014, MSC Cruises launched an investment plan to support the second phase of its growth through the order of a total 11 new, next-generation MSC Cruises ships through 2026 for a total investment of €9 billion.
The company is the first global cruise line brand to develop an investment plan of this length and magnitude, spanning a horizon of over ten years. MSC Cruises feels a deep responsibility for the environments in which it operates, and was the first company ever to earn the Bureau Veritas “7 Golden Pearls” for superior management and environmental stewardship.”
MSC Cruises SA has over 13 years’ experience of operating Cruise Terminals and has international experience in operating Cruise Terminals around the world including the following: Marseille (France), Genoa (Italy), Civitavecchia (Italy), and Naples (Italy).
Africa Armada Consortium Pty Ltd is a black economic empowerment investment company aimed at empowering its black investors through participation in economic activities, in particular port and logistics developments.
Cllr Nkosenhle Madlala, representing Her Worship the Mayor, Councillor Zandile Gumede at the event, expressed excitement at the prospect of developing Durban into a world-class cruise capital with facilities that meet international standards and expose visitors to the array of tourism experiences Kwa-Zulu Natal has on offer.