NAMPORT CEO, Andrew Kanime has clarified that new container terminal will not be sold but the Authority is only considering concessioning the N$4.2 billion terminal which was commissioned in recent years, Business Express understands.
Concessioning is the process whereby an asset, owned by the public sector, is availed for operation and management by the private sector, for a defined period of time at a fee and undertakings of mutually set investment upgrades.
“I must underline that concessioning does not entail selling off the asset, or the terminal in this case, but rather a specialized lease arrangement where the operator runs the terminal and handles the containers in lieu of an upfront payment to the concession grantor, being Namport in this case, making volume related payments during the tenure of the concession, introducing additional capital for investments and driving operational efficiencies in the business,” Kanime said last week.
He also highlighted that it was unfortunate that the dynamics in the shipping industry have significantly shifted.
“On the back of depressed macro-economic conditions which negatively impacted industries across all sectors with attendant decreases in imports and exports handled through Namibian, and other, ports across the region, shipping lines have moved to larger size vessel deployment as part of their own drive towards cost rationalization.
“The cumulative effect of these unforeseen and unfortunate developments has been a significant decrease in the volumes throughput through the new container terminal. Hence, given the need to earn a return on this very strategic investment we have been compelled to explore means and ways we can drive the utilization of the terminal and amongst the outcomes from our considerations has been the decision to consider concessioning the new terminal to an independent operator,” expressed Kanime.
While Namport had taken an in-principle decision to consider the possible concessioning of the New Container Terminal, the Government, being the shareholder of the business, decided in March 2021 that consideration should be given to combining this envisaged concessioning of the terminal with the sourcing of an investor to develop the National Single Window and a Special Economic Zone at Walvis Bay. It was the considered position that there were synergies amongst these three projects if they were rolled out concurrently and possibly simultaneously.
The Government through the Namibia Investment Promotion and Development Board (NIPDB) then issued a market invitation for potential investors to express interest to invest in and manage, the three projects, either jointly or separately. The EOI was issued in August 2021 and was christened the Walvis Bay Industrial Development Initiative (or WIDI).
“The EOI process closed in October 2021 and based on the adjudication of the submissions received which was carried out jointly by representatives from NIPDB, Namport, MIT, Ministry of Finance and Ministry of Public Enterprises, it was concluded that: There is market interest in the three projects to varying degrees; and the market interest was more in favor of in fact rolling out the three projects separately,” Kanime explained.
Namport has since, appointed Maritime Business and Transport Solutions (or MTBS), an international consultancy firm as transactional advisors in the envisaged concessioning exercise, drawn up, and issued, a request for proposal (RFP)’s to participants who expressed interest to manage and operate the NCT from the WIDI process which was carried out under the auspices of the NIPDB.
Conclusively, Kanime said: “I further reiterate that the disposal of the terminal is absolutely not part of the considerations of this process and ownership will remain vested in Namport until the end of the concession period where after the container handling operations will revert back to Namport”.