Transnet has applied to the minister of forestry, fisheries and the environment for permission to reclaim 22.4 hectares of land from Durban Bay, a project the state-owned freight and logistics group sees as essential to expanding the port’s container capacity and keeping South Africa’s economy competitive. The application, submitted by the Transnet National Ports Authority, proposes developing a new container terminal at the Point precinct capable of handling 1.8 million 20-foot equivalent units per annum. The reclamation would require 4 million cubic metres of infill material and would accommodate a new quay wall, berthing for ultra large crude carriers, harbour cranes and container stacking areas. The Port of Durban is one of the busiest in Africa, and the project forms part of a broader strategy to raise the port’s total capacity to between 10 million and 11 million TEUs.
The move represents a significant shift in Transnet’s expansion plans. The authority had previously pursued the development of an entirely new facility, the Durban Dig-Out Port, at the old airport site 11 kilometres south of the existing harbour. That project has been delayed primarily due to financing uncertainties and environmental concerns. Instead, Transnet has turned its focus to upgrading and expanding existing infrastructure, including deepening berths, expanding container terminals and improving rail links. The reclamation proposal is the most ambitious of these initiatives, requiring environmental authorisation while promising to reduce logistics costs and create new economic opportunities by boosting trade competitiveness. Transnet stated that the project would act as a catalyst for local economic development by strengthening supply chains, enabling industrial growth and attracting both domestic and international investment.
Funding for the reclamation and associated terminal development will come from approved tariffs charged for services and facilities provided by the authority. These tariffs are regulated by the Ports Regulator of South Africa using a rate of return or required revenues methodology. At a minimum, that methodology ensures the authority recovers its investment, costs and a fair return, with revenue derived from total volumes handled against applicable tariffs. The authority explained that the rate of return approach is premised on patient investment, with returns recovered over the useful life of an asset. Port assets and infrastructure have an average useful life of approximately 40 years, meaning that while upfront capital expenditure is required, the investment is recovered through tariffs over a prolonged period.
The reclamation proposal complements other major upgrades at the port, particularly at the Durban Container Terminal Pier 2, which handles more than 65% of the Port of Durban’s throughput and 40% of South Africa’s port traffic. Transnet last year signed a landmark 25-year contract with International Container Terminal Services, a Philippines-based operator, to run Pier 2. That concession is expected to inject R11 billion in investment, increasing the terminal’s capacity from 2 million to 2.8 million TEUs. Other projects include upgrades to the Maydon Wharf Container Terminal. Together, these initiatives form part of Transnet’s broader operational recovery following years of underinvestment in key infrastructure. The group seeks to invest about R125 billion over the next five years as it works toward a target of moving 250 million tonnes of cargo by 2030, up from the present 170 million tonnes.
The push to expand Durban’s capacity comes as independent analysis highlights South Africa’s significant export potential. According to the latest Where to Invest in Africa report produced by Rand Merchant Bank, the country has the largest untapped export potential of any nation on the continent, which if exploited could add as much as $75 billion in annual exports within the next five years. Transnet’s application to reclaim land from the sea now rests with the environment minister, with any approval likely to trigger further regulatory reviews and environmental impact assessments. The authority has framed the project as essential to improving maritime connectivity, creating a competitive hub port system, revitalising terminal businesses and reforming the container rail business.