South African Maritime Safety Authority (SAMSA) CE Tsietsi Mokhele says a locally-flagged merchant navy has the potential to create hundreds of thousands of jobs in five years. He says the revival of the country’s shipping and the transporting at least 40% of South African exports on locally registered ships would create up to 248 000 jobs in five years.
“In a fleet of 300 [ships] we could create 240 000 jobs,” he told the African Ports and Harbours Congress in Johannesburg, the South African Press Association reports. “Shipping is very intensive in terms of jobs.” Mokhele told attendees SA currently had just one ship on the commercial register.
This is because of ships registering in countries that offer owners better legal and taxation regimes.
Mokhele says his organisation has lobbied the government to change some of its regulations around taxation and banking, to make the country a more appealing host. “If we don’t move now, we’re missing an opportunity to create jobs.”
The SAMSA CE made the same comments at last October’s defenceWeb maritime security conference and the SA Navy’s 3rd Sea Power for Africa symposium in April last year. He then lamented that the SA Oranje, the last ship on the SA register was on the verge of decommissioning.
He noted that at its heyday, in the early 1990s, the SA merchant marine had about 120 ships on register: about 60 Safmarine vessels and a similar number of Unicorn-line vessels. While successors to both still operate in SA waters, their ships now carry flags of convenience. Mokhele says the problem with this is that SA – and Africa – can never become maritime powers “so long as on the commercial side we don`t own commercial vessels.”
Speaking to defenceWeb on the side of the conference, he said SAMSA initiated a programme called “Project 300” in October 2008 to argue for a 300 ship merchant fleet as a baseline figure. This would be done, in part, by rewriting legislation to draw ships back onto the SA register. But it would also involve reviving the shipbuilding industry and constructing ships.
“Project 300” consultations have included ship owners such as Grindrod, who were then expanding their fleet to about 60; ship operators and the departments of Transport and Trade & Industry. “Together with DTI and DoT we have initiated a maritime cluster forum combining a number of departments and agencies to find a way forward to best position this country as a maritime centre in the global economy,” Makhele added.
“Three hundred is not an overambitious target. Safmarine by 1990 had 60 ships. Grindrod is ramping up to between 54 and 64.” He said the fleet should include medium-sized fuel and chemical tankers as well as multipurpose cargo ships, “capable of carrying bulk cargo one way and containers the other”. Business could be secured by introducing a cabotage policy similar to that in the European Union which restricts the carrying of cargo between EU ports to EU-flagged ships.
Legislative changes to encourage ships to carry the SA flag include migrating from taxing profits to taxing tonnage: “Paying a nominal tax will be a big incentive for ship owners,” he says.
Building ships will create a sustainable maritime building industry, he continues. But it will need some government underwriting. “It needs a guarantee, like 2010 [the Soccer World Cup] If government does not commit … it means you can`t build the needed infrastructure, you can`t make the investments.” He was hopeful the state-owned Industrial Development Corporation and the Development Bank of Southern Africa would play a lead role in this endeavour. “The IDC held shares in Safmarine. They used government money to set up Safmarine so this is not the first time this is done.”
At the time he further stated hat SA would purchase two salvage ships worth R800 million. “We`ve just completed the feasibility study and with the DoT we will be buying two salvage vessels,” Mokhele said in a presentation on his agency`s activities. Mokhele said indications were the vessels will cost between R360- and R400 million each at the current exchange rate. “We are looking at buying two, one for the east coast, one for the west coast so we can respond to all incidents off our coast.” He did not further elaborate on the requirement. At present, salvage work is contracted to private hands, with Dutch-owned Smit Amandla Marine being a prominent name in the business.