CSTC will help SAS rejuvenate South African maritime industry


The China Shipbuilding and Trading Company (CSTC) will use its expertise to assist Southern African Shipyards (SAS) in the rebuilding of South Africa’s maritime industry, with an emphasis on Operation Phakisa to develop the ocean economy.

This is according to Charles Maher, General Manager: Marketing at Southern African Shipyards (SAS) who told defenceWeb that the Memorandum of Understanding (MoU) signed between SAS and CSTC earlier this year was bearing fruit. He said that after the MoU became effective at the end of March, there has been a secondary visit and follow-up meetings with more scheduled for the end of September while acting CEO of Transnet Siyabonga Gama and other executives will later this year travel to China on a fact-finding mission.

After theMoU was signed, Prasheen Maharaj, CEO of SAS, said the agreement would bring competitiveness and efficiency into South Africa with benefits to the shipbuilding supply chain. The agreement covers technology and skills transfer and will see SAS source equipment and supplies from China and market CSTC’s large ships in Africa.

SAS and CSTC committed to building a collaborative institutional relationship where experience and expertise are shared, particularly around potential projects which fall under Operation Phakisa. This was launched by President Jacob Zuma in 2014. One of its two key focus areas is to develop South Africa’s maritime economy in sectors such as marine transport and manufacturing and offshore oil and gas. It includes the expansion of South African port capacity for repair work for oil ships and oil rigs.

One of the projects the MoU with CSTC is targeting is the multibillion rand Saldanha Bay and Richard’s Bay oil and gas hubs, which aims to cater for the South African and West African oil and gas markets. Transnet as the custodian of the projects aims to have construction underway by 2017/18. Maher said that a request for proposals for Richard’s Bay will be issued around September and Saldanha Bay by the close of the year. Around R4.5 billion could be spent developing ship repair hubs in each of these ports.

Maher told defenceWeb that CSTC would like to bring its expertise to help build ship repair yards, provide finance for the projects and hand over operations to a South African owned entity which would be responsible for getting business and repaying the construction and development loan. After 25-40 years the facilities would be handed back to Transnet. CSTC would also send a certain number of ships to the yards every year. Maher said that CSTC would bring the yards back into 21st century, making them globally competitive in all marine conversion/oil and gas projects using modern equipment and techniques.

Some 30 000 vessels transit South African waters every year, making it one of the world’s key shipping routes yet the South African ship repair industry is relatively small, partly due to deteriorated facilities and high port rates, which has seen the number of ships calling for repairs as well as bunkering drop.

It is difficult for youngsters to get into the industry and gain experience as a lot of experienced engineers, captains and deck officers have left for the offshore oil and gas industry. Maher said it is time to bring back South Africa’s shipbuilding and repair industry and make it a destination for ship repairs once again.

Operation Phakisa was launched with a focus on Marine Transport and Manufacturing led by the Department of Transport; Offshore Oil and Gas, led by the Department of Mineral Resources; Aquaculture, led by the Department of Agriculture, Forestry and Fisheries; and Marine Protection Services and Ocean Governance, led by the Department of Environmental Affairs.

A study conducted recently by the Nelson Mandela Metropolitan University quantified the value of South Africa’s maritime economy. Analysis undertaken in 2013 found that nine sectors of South Africa’s ocean economy could generate an estimated GDP contribution of R129 billion to R177 billion by 2033, and 600 000 jobs.

President Jacob Zuma recently pointed out that of the 30 000 vessels that dock in local ports every year, South Africa only does maintenance on 5% of the vessels. In addition, of the 80 rigs in the Western Cape, only 4 are serviced per year. “300 million tonnes of cargo on foreign owned vessels are shipped and 1.2 million tonnes of liquid fuel passes along our coast annually. In this regard, significant investment is required in new port infrastructure including rig repairs,” he said.

The President said the rehabilitation, upgrade and redevelopment of some small harbours, as well as the identification and proclamation of new harbours and their integration with national coastal projects, has begun in order to unlock the economic potential of coastline.
“We have identified Gansbaai, Saldanha Bay, Struisbaai, Gordons Bay and Lamberts Bay for rehabilitation and development. A roadmap has also been developed for the proclamation of new harbours in the Northern Cape, Eastern Cape and KwaZulu-Natal,” said the President.

He said the finalisation of the Mineral Resources and Petroleum Development Amendment Bill, which is currently in the Parliamentary process, is designed to also assist government to accelerate offshore oil and gas exploration. He also said the aspiration of the offshore oil and gas exploration focus group of the Oceans Phakisa is the drilling of 30 exploration wells in ten years.
“This would produce 370 000 barrels of oil and gas per day. If this is achieved, it would mean the creation of up to 130 000 jobs, with an annual contribution to the GDP of $2.2 billion, while reducing the dependence on oil and gas imports during the production phase,” said President Zuma.

The President said some projects have already commenced, and said a total of R9.2 billion is to be spent to develop Saldanha Bay as an oil and gas hub. He said the phased gas pipeline routes have also been defined.
“Environmental authorisation has been approved for the Burgan Fuel Storage facility in the port of Cape Town. This is an investment of approximately R660 million and construction will commence by the end of August 2015,” he said.

Although not directly part of Phakisa, SAS is supporting Transnet by building nine tugs for the entity, which will use them in Saldanha Bay for ore carriers and oil tankers. One of the tugs is a supertug with a 90 ton pull, which will be the last of the nine to be completed, in the first quarter of 2018.

The supertug features a Voith Schneider propeller (VSP), also known as a cycloidal drive, which uses hydro-dynamic vertical steel blades in the water. It is very economical and highly manoeuvrable, being able to change the direction of its thrust almost instantaneously. The vessel is a hybrid developed on the AJAX Class design for difficult Norwegian operations in the North Sea.

The South African Navy’s contribution to Operation Phakisa will be through its safeguarding and patrolling of the country’s exclusive economic zone. Economic stimulus will also be generated through the acquisition of three inshore and three offshore patrol vessels in the next few years under Project Biro, and the acquisition of a new hydrographic research vessel under Project Hotel. In the meantime, the SA Navy patrol South Africa’s waters, and the water of the Mozambique Channel, with frigates, a replenishment vessel, converted strike craft and minehunters.