Plans by the KwaZulu-Natal provincial government to use Transnet as a catalyst to grow the economy which has been battered by Covid-19 are in disarray following an announcement that the port authority will move its headquarters to the Eastern Cape.
Transnet, which currently has its head offices in Durban and Johannesburg, has resolved to amalgamate the two into a single one — which according to the ports authority would be based in Ngqura, Port Elizabeth.
Delivering his State of the Province Address (Sopa) in Pietermaritzburg on Friday, Premier Sihle Zikalala, said the decision took the provincial government by surprise.
“As the provincial government, we were taken aback by the announcement on the relocations of Transnet Headquarters’ operations to Ngqura (in Eastern Cape). We are engaging with the Minister of Public Enterprise and Transnet to unpack the decision’s full implications for our province and country,” he said.
KZN, which previously generated billions of rands from its tourism industry, now has to focus more on its ports and ocean economy as areas to stimulate economic growth after the tourism industry was shattered by Covid-19.
The Durban port, which currently handles about 60% of the country’s cargo, is the busiest in Africa.
There had been expectations that Durban would host the parastatal’s consolidated headquarters given the city’s strategic location.
Transnet’s decision, which also took analysts and business organisations by surprise, meant that its staff in Durban will have to relocate to Port Elizabeth. Durban Chamber of Commerce and Industry (DCCI) chief executive, Palesa Phili, has called on Transnet and Gordhan to reconsider the decision to relocate the parastatal’s head office.
“We hope that this decision is not cast in stone. It does not make logistics sense, especially with the Durban-Johannesburg corridor being the key import and export route for SA.
“In addition, there are so few flights between Durban and PE, a city that also does not have direct international flights,” she said.
The extensive economic benefits that needs to be leveraged from the Durban Port, Phili said, required Transnet’s top leadership to be based in Durban.
Zikalala said the province’s ports and Special Economic Zones (SEZ) including the Dube Trade port and Richards Bay possessed enormous potential to grow the economy and create jobs.
“We undertake a solemn declaration to spare no effort in the struggle to grow the economy. The focus will be on restructuring the economy to ensure growth and address the imbalance in ownership patterns,” Zikalala said.