Questions over Namport container terminal lease
A decision by the Namibia Ports Authority (Namport) to transfer the operation and management of its multibillion-dollar container terminal has been met with scepticism, with commentators questioning its move to private hands.
Government funded the construction of the N$4.2 billion facility through the African Development Bank (AfDB).
Namport announced its intention to lease out the facility for a 25-year period, saying the dynamics in the shipping industry significantly shifted on the back of depressed macro-economic conditions which negatively impacted industries across all sectors, including the newly- constructed container terminal.
The authority’s CEO Andrew Kanime said the move was in line with international benchmarks which will allow them to recoup their investment, as the contract will entail the expansion of the terminal quay and yard to increase throughput.
Declining volumes to blame
In 2019, he stated that the facility had never handled the capacities it was meant to handle. At the time, he attributed the decrease in the volumes of containers to various factors, including the “expansion of other ports in the region; the deployment of larger size vessels by shipping lines and the concentration of volumes by shipping lines at ports with higher productivity and port efficiencies”.
“These unforeseen and unfortunate developments caused a significant decrease in the volumes' throughput through the new container terminal. 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 utilisation of the terminal, and amongst the outcomes from our considerations has been the decision to consider concessioning the new terminal to an independent operator,” Kanime said.
An odd development
Labour commentator Herbert Jauch said while the announcement seemed odd given government’s investment in the facility, it was important for Namport to pronounce itself on employee security.
300 Namport staff members are currently attached to the facility. It is unclear whether these employees will be transferred over to the new operator, retained within Namport or retrenched.
“At first glance, this sounds very strange indeed. Namport needs to explain why it proposed to do that and how Namibia would benefit. They must also explain how the workers’ jobs at the terminal will be safeguarded,” Jauch said.
Transparency required
Academic Omo Matundu-Kakujaha said it was of utmost importance for the process to choose an operator be transparent, adding that it was not a bad idea at first glance.
“What you want is to tap into is international experience. If that can make you efficient and competitive, plus using the concession period to build local capacity, it will be a win-win situation. In this case, the contract should have a strong local capacity building clause, with clear indicators and targets,” he said.
Government funded the construction of the N$4.2 billion facility through the African Development Bank (AfDB).
Namport announced its intention to lease out the facility for a 25-year period, saying the dynamics in the shipping industry significantly shifted on the back of depressed macro-economic conditions which negatively impacted industries across all sectors, including the newly- constructed container terminal.
The authority’s CEO Andrew Kanime said the move was in line with international benchmarks which will allow them to recoup their investment, as the contract will entail the expansion of the terminal quay and yard to increase throughput.
Declining volumes to blame
In 2019, he stated that the facility had never handled the capacities it was meant to handle. At the time, he attributed the decrease in the volumes of containers to various factors, including the “expansion of other ports in the region; the deployment of larger size vessels by shipping lines and the concentration of volumes by shipping lines at ports with higher productivity and port efficiencies”.
“These unforeseen and unfortunate developments caused a significant decrease in the volumes' throughput through the new container terminal. 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 utilisation of the terminal, and amongst the outcomes from our considerations has been the decision to consider concessioning the new terminal to an independent operator,” Kanime said.
An odd development
Labour commentator Herbert Jauch said while the announcement seemed odd given government’s investment in the facility, it was important for Namport to pronounce itself on employee security.
300 Namport staff members are currently attached to the facility. It is unclear whether these employees will be transferred over to the new operator, retained within Namport or retrenched.
“At first glance, this sounds very strange indeed. Namport needs to explain why it proposed to do that and how Namibia would benefit. They must also explain how the workers’ jobs at the terminal will be safeguarded,” Jauch said.
Transparency required
Academic Omo Matundu-Kakujaha said it was of utmost importance for the process to choose an operator be transparent, adding that it was not a bad idea at first glance.
“What you want is to tap into is international experience. If that can make you efficient and competitive, plus using the concession period to build local capacity, it will be a win-win situation. In this case, the contract should have a strong local capacity building clause, with clear indicators and targets,” he said.
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