Piracy Gives Transnet Chance for South Africa Freight Growth

Transnet SOC Ltd. is boosting its South African freight capacity as piracy in Somali waters offers the country an opportunity to take more share of the shipment of goods from Asia to the Americas.

The state-owned rail and ports utility has increased the design capacity of its Ngqura container terminal in the southern South African city of Port Elizabeth to 2.2 million 20-foot-equivalent units, or TEUs, Transnet Chief Executive Officer Brian Molefe said in an interview on Monday. The company will start the expansion once terminal usage rises to about 1.1 million TEUs from 730,000 TEUs in 2013, Siya Mhlaluka, general manager for operations in the Eastern Cape province, told reporters.

Piracy is a “huge opportunity for us,” as the route around South Africa is safer than traveling from Asia to North and South America through the Mediterranean Sea, Molefe said. “There’s a possibility to divert traffic here instead.”

Transnet, based in Johannesburg, started a seven-year, 312.2 billion-rand ($25.7 billion) plan in 2012 to increase rail and port capacity. Somali piracy cost the global economy about $6 billion in 2012, according to Oceans Beyond Piracy, a project of the Broomfield, Colorado-based One Earth Future Foundation.

Transnet spent 2 billion rand to increase the operating capacity of the Ngqura terminal to 1.5 million TEUs from 800,000 TEUs, Molefe said.

Transnet is relocating its manganese terminal to Ngqura from Port Elizabeth as it grows annual shipment capacity for the stainless-steelmaking ingredient to 19 million metric tons, Molefe said.

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