2050 vision for the Durban to Gauteng

Freight Corridor: What this means for Durban?

Andrew A. MathereThekwini Municipality

CONTEXT

OBJECTIVESThe Durban to Gauteng freight corridor forms the backbone of

South Africa’s freight transportation network, and is vital in

facilitating economic growth for the country and the Southern

African region.

South Africa’s ability to improve efficiencies and lower logistics

costs on the corridor, and to provide freight handling capacity in

line with demand, will be critical to the region achieving its short,

medium and long term economic objectives.

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THE 2050 VISIONThe 2050 vision provides an integrated solution to the growing expansion

requirements of the Durban to Gauteng freight corridor which will form the

foundation for the establishment of a Southern African regional freight

network.

The Durban to Gauteng corridor consists of the following key

developmental components:

• The Port of Durban

• The Durban – Gauteng road corridor

• The Durban – Gauteng freight rail corridor

• Strategically located logistics hubs and terminals

• Supportive local area land use plans5

TRANSPORT CORRIDOR COMPONENTSDURBAN to GAUTENG TRANSPORT CORRIDOR

FREIGHT TRANSPORTATION & LOGISTICS PASSENGER TRANSPORTATION

Port Road Rail Pipe Air Road Rail Air

Passengers and freight share the same infrastructure on the corridor. While at a demand and capacity planning level the development of the corridor considers the integrated impact of the growth of both passengers and freight , the 2050 Vision focuses on Freight transportation and logistics

Intermodal Hubs & TerminalsSupportive Land Use Planning

•Supports Regional Integration through reinforcing short sea shipping, extending the rail and road corridors into Africa•Public investment leverage opportunity for local development and BBBEE•Addresses aged, & expensive ports & rail

•Prioritises corridors•Identifies need to reduce logistics costs

•Responds to crumbling infrastructure•Resource Intensive economy•Reduce poverty and inequality through lowering logistics costs and through BBBEE and local development via public investment

•Increase rail market share•Competition for the management of container terminals•Long term national freight plan and prioritise corridor development•Implementation of the Transnet Infrastructure Build

•Prioritises corridors•Opportunity for private sector participation in terminal operations

•Reducing logistics costs improves competitiveness and creates more jobs•Infrastructure investment creates direct and indirect jobs•Addresses backlogs and bottlenecks in logistics

STRATEGIC ALIGNMENT TO NATIONAL STRATEGIES AND POLICIES

MAJOR PHASES OF DEVELOPMENTThe 2050 vision is driven by three major phases of port development:

• Phase 1: 2010 – 2020 (current expansions in the Port of Durban)

Pier 1 Phase 2, Maydon Wharf, berth deepening, land acquisitions, environmental approvals,

interim leasing of airport site, dedicated freight route to N2, construction of phase 1 of airport

site dig-out, phase 1 of road and rail expansions, land use plans, phase 1 of hubs and

terminals.

• Phase 2: 2020 – 2040 (Airport site development)

Construction of next phases of airport site dig-out, associated road and rail capacity

upgrades, second phase of land-use plans and development of hubs and terminals,

environmental approvals, land acquisitions, rail relocations, construction of first phase of

Bayhead dig-out.

• Phase 3: 2040 – 2050+ (Bayhead development)

Construction of next phases of Bayhead dig-out, ongoing associated corridor expansions.

The corresponding rail, road, hub and terminal and land-use projects also follow this phasing sequence.

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Institutional Framework

DoT Minister(National Champion)

DoT Director-General(Chairman - Steering Committee)

DoT Deputy Director-General: TL&CD

Secretariat/PMU

DoT DPE the DTI Treasury

SANRAL Metros/MunicipalityJhb & Ethekwini

Provincial Governments KZN, Gauteng & Free State

ACSA RTMC Transnet

Steering Committee

Work Streams

Planning & Infrastructure

Socio-economic , Finance & Funding

Legislation, Policy, Regulation , Compliance & Environment

Communication

PRASA

National Champion: Facilitate inter-ministerial alignment and Cabinet approvalSteercom Chairperson: Ensure administrative and technical alignment in government

Steercom Members: Responsible for sectoral adoption and alignment

Presidency & NPC

INSTITUTIONAL FRAMEWORK: WORKSTREAMS

Steering Committee

Policy,Legislation,Regulatory,ComplianceWorkstream

Socio-economic, Financing and

FundingWorkstream

CommunicationWorkstream

Planning + Infra-structure

ImplementationWorkstream

• Prepare and consolidate infrastructure plans for port, freight and passenger rail, road, terminals and land use.• Drive project delivery to meet objectives.

• Prepare internal and external communication strategy.• Arrange launch publicity.• Ongoing reporting activities.

• Ascertain investment requirements of program.• Advise on funding strategies.• Facilitate securing of funding.• Advise on affordability and sustainability.

•Advise on PLRC requirements, and ensure compliance.•Facilitate PLRC changes required to support the project.

Project Management and Co-ordination

The 2050 Vision Poster

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N3 Road NeedsN3 Road Needs

PRIORITY DUE BY DESCRIPTION LENGTH(km)

COST(2010 Rands)

1 2020 Cato Ridge to PMB to 6 lanes & PMB I/C’s upgrade

21,5 R2,05bn

2 2020 De Beers Pass 98 R3,44bn

3 2020* Freight Route Phases 1& 2 44 R2,76bn

4 2030* Freight Route Phase 3 23 R1,92bn

5 2030* PMB Bypass 60 R3,65bn

6 2025 Heidelberg - Germiston 40 R1,0bn

7 2035 Germiston - End 5 R0,5bn

TOTAL R15,32bn* Current investigation underway on an N3 8-lane option and how this could extend the start date of these projects

Phase 1c: Mariannhill to Cato Ridge

Port of Durban

Legend2010-2025 : Implementation Phasing : : : Dedicated Road Freight Route

Major Road Infrastructure Proposals from Port of Durban to Cato Ridge

Phase 1a: Port to Mariannhill

Phase 1b: North – South Freight Route

Freight Route Phasing - Roads

Phase 1b: North – South Freight Route and Complementary

Upgrades

Phase 1a: East – West Freight Route: Port to Mariannhill

ETA FREIGHT CORRIDOR STUDY

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URBAN PLANNING AND ECONOMIC POTENTIAL ASSESSMENT

Broad Land Cover Key Industrial Clusters Industrial Accessibility

Typical Route Impact Analyses

Back of Port Land Uses

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YearBack of ports ha required

2011 1502014 1792017 204

2019-2037 6282037-2050 878

INDICATIVE COSTSINFRASTRUCTURE ELEMENT COST

(R billion)

PORT (Current port expansions, DIA digout port and Bayhead digout)

150

RAIL• Line capacity

•Inland Terminals

•Coastal Terminals

111443334

ROAD 20

PIPELINE 25

PRELIMINARY SOCIO-ECONOMIC ANALYSESINFRASTRUCTURE ELEMENT CONSTRUCTION

JOBSOPERATIONAL

JOBS

PORT (Current port expansions, DIA digout port and Bayhead digout)

64 000/annum 28 000/annum

RAIL & ROAD 51 000/annum 49 000/annum

BACK OF PORT 23 000/annum 6 500/annum

Measuring Anticipated Economic Impact of Dig-Out Port Development

Order of Magnitude Study

Economic impact cycle

Increases in Economic Demand Demand for construction materials has a positive spin-off on

national economy, generates NEW BUSINESS SALES.Total New Business Saleso Phase 1: R54.3bo Phase 2: R22.6bo Phase 3: R21.3bo Phase 4: R19 2bo TOTAL: R117.6b

Increasing Local ProductionAs business sales increase – this requires a significant increase inlocal production output, and generates NEW PRODUCTION referredto as GROSS GEOGRAPHIC PRODUCTION.

Total New Production (GGP) o Phase 1: R22.4bo Phase 2: R8.9bo Phase 3: R8.4bo Phase 4: R7.6bo TOTAL: R47.5b

Work Opportunities and Job Creation More production translates into an increase in the need for Labour• 318 279 temporary work opportunities created through the port

construction process and• 63 656 jobs created during 30 year construction phase

Total Jobs Created in Each Phase

  Total Direct Indirect

Phase 1 29 664 21 301 8 363

Phase 2 12 138 8 803 3 335

Phase 3 11 483 8 436 3 046

Phase 4 10 371 7 631 2 740

 Total 63 656 46 171 17 484

Impact on Salaries and Wages during Construction

The temporary and permanent employment positions has a significant impact on the level of local salaries and wages.

These increase R23.8 billion over the period.

Total New Income Impacto Phase 1: R11.2bo Phase 2: R4.5bo Phase 3: R4.2bo Phase 4: R3.8bo TOTAL: R23.8b

Economic Impact of Dig-Out Port Operations

• An anticipated Operational related GDP of R55 615 million (per annum at full operation) equivalent to 2.75% of SA GDP in current 2010 terms.

• Job creation of an additional 27 533 jobs created at full operation. – Port and Maritime Business related jobs: 11552– Petroleum related jobs: 701– Wider Economy Employment: 15821

CRITICAL DECISIONS MATRIX

Phase 1 (2011 - 2019)Planning / Critical Decisions Infrastructure

Port 1. Acquire Salisbury Island (March 2011)2. EIA (March 2012)3. Rezoning (April 2012)

1. DCT Re-engineering (2012)2. Pier One Phase 2 (2015)

Freight Rail 1. Rolling stock acquisition plan (April 2012) 1. Rolling Stock Acquired (2015)High Speed

Passenger Rail1.Phase 1 feasibility (Oct 2011)2. Phase 2 Feasibility (Oct 2014)3. Cabinet Approval (Mar 2015)4. EIA (Oct 2019)5. 24 hour freight management system (June 2015)

Roads 1.Land assembly (Dec 2012)2. Rezoning (Dec 2012)3. EIA (Dec 2012) 4. Intention to Toll (Dec 2014)5. Proclamation (Jun 2015)6. 24 hour freight management system (June 2015)

1. East - West Road Freight: Phase 1a (2015) , Phase 1c (2019)

Logistic Hubs & Intermodal Terminals

1. Approval of investment and Implementation plan (Dec 2011)

1. Reconfigure and Upgrade of City Deep and other inland existing terminal (2015)

Land Use 1. Finalise LAP (Durban and Gauteng) (June 2011)2. Rezoning (2013)

1. Land use Phase 1 (2015)

Funding Plan Develop funding plan for Phase 1 (Dec 2011) Approved Funding (Dec 2012)

Blue - Decision solely within one stakeholders authorityPurple - joint stakeholder decision requiredRed - decision to be made and driven by steercom

Phase 2 (2020 - 2037)Planning / Critical Decisions Infrastructure

Port 1.Cabinet resolution on preferred use of site in context of 2050 vision (March 2011)2. Adoption of role of dig-out port in context of national port strategy (March 2011)3. Purchase of land / land assembly (Sept 2014)4. SEA (March 2013)5. Rezoning (Sept 2015)6. EIA (Sept 2015)7. Regulatory Approval (March 2014)8. Port concessioning (Sept 2016)

1. Dig-out phases 1 - 4 (March 2020 for Ph 1)

Freight Rail 1. Identify need and location (Oct 2011)2. Sequencing and Phasing (Dec 2011)3. Land assembly (2017)4. rezoning (2017)5. EIA (2017)

1. Coastal Rail Terminal Ph 1 (2020)2. Freight-Commuter separation (2020)3. Rolling stock Acquired (2020)4. New Inland mega rail terminal (2020)5. Natcor Upgrade Phase 1 (2020)

High Speed Passenger Rail 1. Rezoning and Land Acquisition (Oct 2021) 1. Phase 1 Construction

Roads 1. Land assembly (2016)2. Rezoning (2016)3. EIA (Dec 2016)4. Intention to Toll (Dec 2019)5. Proclamation (June 2020)6. 24 hr freight management system (2020)

1. East-West Phase 2 (2022)2. Phase 1b (North - South) (2022) 3. Extension of freight road from Cato Ridge to Gauteng Phase 1 (2020) (To be incorporated into N3 additional lanes/future upgrades)

Logistic Hubs & Intermodal Terminals

1. Identify need and location (Dec 2012)2. Sequencing and Phasing (Dec 2012)3. Land assembly (Dec 2012)4. rezoning (Dec 2014)5. EIA (Dec 2014)

1. Coastal logistics nodes Ph1 (2020)2. Inland logistics nodes Ph1 (2020)

Land Use 1. Implementation plan for phase 2 (2016)2. Rezoning (2017)

1. Land use Phase 2 (2020)

Funding Plan Develop funding plan for Phase 1 (Dec 2014) Approved Funding (Dec 2015)

Blue - Decision solely within one stakeholders authorityPurple - joint stakeholder decision requiredRed - decision to be made and driven by steercom

Phase 3 (2038 - 2050)

Planning / Critical Decisions InfrastructurePort 1. Habitat re-creation plan (2017)

2. Land assembly (2028)3. Rezoning (2029)4. EIA (2029)5. Regulatory Approval (2025)6. Port Concessioning (2028)

1. Bayhead Dig-out Port (all phases) (2038 - Ph 1)

Freight Rail 1. Land assembly (2028)2. rezoning (2028)3. EIA (2028)

1. Coastal Rail Terminal Ph 2 (2038)2. Natcor Upgrade Ph 2 (2038)3. Rolling stock acquired (2038)4. New inland mega rail terminal ph 2 (2038)

High Speed Passenger Rail

Ongoing construction phases

Roads 1. Land assembly (2028)2. Rezoning (2028)3. EIA (2028)4. Intention to Toll (2028)5. Proclamation (2028)6.24 hr freight management system (2038)(To be incorporated into N3 future upgrades) - already a toll road

1. East-West Phase 3 (2038)2. Extension of freight road from Cato Ridge to Gauteng Phase 2 (2038)(To be incorporated into N3 future upgrades) - already a toll road

Logistic Hubs & Intermodal Terminals

1. Land assembly (2028)2. rezoning (2028)3. EIA (2028)

1. Coastal logistics nodes Ph 2 (2038)2. Inalnd logistics nodes Ph2 (2038)

Land Use 1. Implementation plan for phase 3 (2028)2. Rezoning (2028)

1. Land use Phase 3 (2038)

Funding Plan Develop funding plan for Phase 1 (Dec 2025) Approved Funding (Dec 2028)

Blue - Decision solely within one stakeholders authorityPurple - joint stakeholder decision requiredRed - decision to be made and driven by steercom

CONCLUSION• There is alignment within Government in respect of the

role of the corridor, its components and development timeframes.

• A Multi sectoral Institutional Structure is in place to monitor and drive a set of critical decisions to ensure capacity is provided in line with demand.

• The 2050 Vision is aligned to key national policies and strategies

• It provides an aligned, integrated and total solution to the freight transportation needs of the one of the most important economic corridor in the country and Southern Africa