Africa Infrastructure Diagnostic Study PORT SECTOR Mike Mundy Ocean Shipping Consultants Tunis, December 2007
PROFILE OF PRESENTATION Scope of Study Traffic Development Institutional Framework Attraction of Finance Infrastructure Development Cost Conclusions
SCOPE OF STUDY FOCUS 15 Sub-Saharan Africa Countries Approx 73 ports 30+ receiving a comprehensive review 40+ a partial review OBJECTIVE To refine, collect and produce a set of predefined indicators augmented by analysis
THE INDICATORS ARE Taking the comprehensive review as an example Port Authority Organisation Port Workforce Port Activity & Performance Facilities & Infrastructure Equipment Profile Capacity Profile Cost Performance Management Model & Competition Private Participation Also a national review and country profile
CONCLUSIONS: TRAFFIC Container Sector by TEU East Africa/I.O. Southern Africa West Africa 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 1995 2005 Region 1995 2005 East Africa/I.O. 505,100 1,394,956 Southern Africa 1,356,000 3,091,846 West Africa 673,400 3,126,901 Grand Total 2,534,500 7,613,703 % Change +176 +128 +364 +200
Regional Transhipment Container Port Demand 1996-2005 East Africa/I.O. Case Study 900 800 700 600 500 400 '000 TEUs 300 200 100 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005P Dar Es Salaam Port Reunion Mauritius Mombasa Maputo Cape Town Durban
CONCLUSIONS: TRAFFIC General Cargo Sector by 000 tonnes East Africa/I.O. Southern Africa West Africa 60 50 40 30 20 10 0 1995 2005 Region 1995 East Africa/I.O. 13.84 Southern Africa 2.73 West Africa 19.57 GRAND TOTAL 36.14 2005 38.42 14.52 51.68 104.62 %Change +177 +431 +164 +189
INSTITUTIONAL FRAMEWORK Port Management Models Employed a Country Snapshot Port Management Models Employed a Country Snapshot Country Management Model East Africa Djibouti Management concession Sudan Service port Kenya Service port Tanzania Part landlord, part service port Madagascar Part landlord, part service port Southern Africa Namibia Service port South Africa Service port West Africa Angola Part landlord,* part service port Democratic Republic Service port of the Congo The Congo Service port Cameroon Part landlord, part service port Nigeria Landlord model Benin Service port Ghana Landlord model Ivory Coast Part landlord, part service port Senegal Part landlord, part service port Cape Verde Service port *Usually indicates concessioning of container terminal facilities only Only really two countries that have fully adopted the favoured Landlord Port Model. Out of the 17 countries examined nearly half (8) still retain the old style Service port model where the public sector is the manager and the operator Having said this nine (9) of the seventeen (17) countries have concessioned to the private sector key container facilities.
INSTITUTIONAL & REGULATORY FRAMEWORK + - It But there are signs of more change to come Seven (7) countries out of the seventeen (17) study group countries are undertaking New National Port Masterplans Not all address institutional reform but a large proportion are is, however, a negative that there is nearly zero evidence of the independent regulation of ports The norm is an involved agency such as the Ministry of Transport
ATTRACTION OF FINANCE Institutional reform is a prelude to opening the gate to private sector investment In mature markets the port sector is today benefiting from the entrance of new generation investors infrastructure funds, pension funds and private equity companies for example In Africa, however, international terminal operators remain the primary new investors The risk profile is perceived to remain high
Multilateral support to Sub-Saharan African transport projects with private participation, 1990-2006 Country Financial closure year Project Name PPI Type Mozambique 1993 Maputo Port Coal Terminal Management and lease contract Kenya 1996 Mombasa Container Terminal Management and lease contract Mozambique 1996 Maputo Port Container Terminal Management and lease contract Mauritius 1997 Freeport Operations Mauritius Greenfield project Mauritius 1997 Mauritius Freeport Development Co. Greenfield project Kenya 1998 Mombasa Grain Terminal Greenfield project Kenya 1998 Mombasa Grain Terminal Greenfield project Mozambique 1998 Port of Beira Concession Côte d'ivoire 2000 Abidjan Port Expansion Greenfield project Equatorial Guinea 2000 Luba Port - Phase One Greenfield project Ghana 2000 Tema Container Terminal Greenfield project Angola 2003 Luanda Container Terminal Concession Gabon 2003 Owendo Port and Port-Gentil Concession Ghana 2003 Port of Tema Concession Mozambique 2003 Maputo Port Concession Cameroon 2004 Douala Container Terminal Management and lease contract Mozambique 2004 Port of Quelimane Concession Madagascar 2005 Port of Toamasina Concession Nigeria 2005 Apapa Container Terminal concession Concession Nigeria 2005 Apapa Port, Terminal A Concession Concession Nigeria 2005 Apapa Port, Terminal B Concession Concession Nigeria 2005 Apapa Port, Terminal C Concession Concession Nigeria 2005 Apapa Port, Terminal D Concession Concession Nigeria 2005 Apapa Terminal E Concession Concession Nigeria 2005 Calabar Port terminal A Concession Nigeria 2005 Harcourt Port Terminal A concession Concession Nigeria 2005 Lilypond Container Terminal Concession Nigeria 2005 Onne Federal Lighter Terminal A concession Concession Nigeria 2005 Onne Federal Lighter Terminal B concession Concession Nigeria 2005 Onne Federal Ocean Terminal A concession Concession Nigeria 2005 Port Harcourt Terminal B concession Concession Nigeria 2005 Tin Can Island RoRo Terminal Concession Nigeria 2005 Tin Can Island Terminal A Concession Nigeria 2005 Tin Can Island Terminal B Concession Nigeria 2005 Tin Can Island Terminal C Concession Nigeria 2005 Warri New, Terminal B Concession Concession Nigeria 2005 Warri Old, Terminal A Concession Concession Equatorial Guinea 2006 Luba Port - Phase Two Concession Nigeria 2006 Calabar New Port, Terminal B Concession
INFRASTRUCTURE DEVELOPMENT There are capacity shortfalls in all three maritime trading areas Principal New Port Developments Sub-Saharan Africa Country East Africa Sudan Djibouti Kenya Southern Africa Durban West Africa Cameroon Benin Ghana Senegal Project Proposed: Introduction of new container and other cargo capacity at Suakin port Actual: New container terminal scheduled to commence operations 2010 and offering major new transhipment capacity Proposed: Second container terminal for Mombasa Actual: Development of the new Pier One container terminal facility, the opening of the new port of Ngqura for container handling operations and the ongoing expansion of coal export capacity at Richards Bay Proposed: New deep-sea port construction Proposed: New port development at Seme-Kpodji Proposed: Extensive new port development at Takoradi Proposed: The addition of major new containerport capacity Each of the three development locations referenced in East Africa are severely short of available capacity In South Africa too it is a question of trying to achieve a sensible balance between demand and capacity demand currently exceeds supply Three of the locations shown on the West African coast are currently working beyond their theoretical capacity limits Across the board there is a shortage of transhipment capacity
INFRASTRUCTURE DEVELOPMENT (Cont') A port is only as good as its interfacing infrastructure S Africa is the only country in SSA to benefit from developed road & rail Infrastructure This is reflected in the relatively low volumes of transit traffic moved across green borders - e.g. Tanzania 50,000TEU, Senegal 33,000TEU Coordinated development is essential
PERFORMANCE Scope for a significant uplift in cargo handling performance across all sectors - container, general cargo, dry bulk The Example of the Container Sector Port Productivity in East & Southern Africa - moves per shiphour Source: PMAESA
PERFORMANCE (cont ) Container Handling Performance Range Over the Quay East Africa 9 to 20+ moves per hour Southern Africa 6 to 18 moves per hour West Africa 6 to 20+ moves per hour General Cargo Handling Performance Range East Africa 8 to 25 tonnes/hr Southern Africa 10 to 25 tonnes/hr West Africa 7 to 15 tonnes/hr Congestion is today a fact of life in SSA It is a roadblock to progress The two solutions to congestion are: increased capacity and greater efficiency
COST Port operations in the study are high cost due to Technical Institutional Inadequate capacity Lack of regulation Poor facilities Monopoly Poor management Use of outdated pricing Poor maintenance systems/structures Structural Poor planning Inability to match supply to demand Lack of enterprise culture East Africa Southern Africa West Africa Container Handling (ship to gate) $135 - $275 $110 - $243 $100 - $320 General Cargo (over the quay) $6 - $15 $11 - $15 $8 - $15
WHAT ARE THE CRITICAL ISSUES? Massive and sustained potential demand growth Demand is there funding should be feasible in most cases Significant opportunities in the transhipment sector Heavy port investment is required for hub status Major potential to develop transit cargo flows across green borders Progress through institutional reform is equally beneficial as new investment Independent regulation of the sector has to be a goal Investment so far is mainly through traditional sources concessioning Productivity must be improved In short, there is significant potential and an array of interesting opportunities for the investor. Capacity additions and institutional reform must be fast-tracked to realise the potential
THANK YOU Ocean Shipping Consultants Limited Tel: +44(0)1932 560 332 Email: mm@osclimited.com & mm@mikemundy.cable.vianw.co.uk Website: www.osclimited.com