Namibia: Swiss Firm Bags Container Terminal Deal

Walvis Bay — A Switzerland-headquartered company has been chosen by Namport to manage the new container terminal at Walvis Bay.

Terminal Investment Limited (TIL) got the nod ahead of four other companies that were shortlisted by the Namibian ports authority. Namport CEO Andrew Kanime on Friday announced that the evaluation process was finalised and that they approved TIL, which is partially owned by the Mediterranean Shipping Company (MSC).

MSC is the largest shipping line in the world by container capacity. “The next stage of the process will be to commence with negotiations between Namport and TIL on the concession agreement, focusing on detailed operational matters, including but not limited to the exact terms and conditions of personnel to be taken over by the operator,” Kanime told journalists.

The two parties are now expected to formalise the contract award, including the signing of the concession agreement as well as the handover of the cargo handling operations to TIL.

TIL has interest in more than 60 terminals, handles at least a million TEU’s per annum and operates in 31 countries across five continents.

“We envisage to finalise the negotiation and handover process by the first quarter of 2023,” Kanime noted. The decision to lease the new container terminal came after the level of utilisation of the terminal was considered.

According to him, its utilisation currently stands at 23%, which is not ideal for business as it presents a real threat to employment levels, given the very low margin of safety.

“Any decrease in current volumes can spell serious negative outcomes for the overall business, and we need to mitigate this risk by targeting the growth of business volumes sufficient to provide healthy margins and guarantee employment,” Kanime said.

He indicated that they are satisfied with the business case proposed by TIL, and that all objectives of the concession exercise such as increase in cargo volumes, investment commitment and employment guarantees will be solidified in the concession agreement, with penalties set for the non-attainment of the set and agreed performance and volume targets.

Kanime earlier said the concession does not mean that it will be sold, but they will enter into a specialised lease arrangement, where the operator runs the terminal and handles the containers in lieu of an upfront payment to Namport.

The operator will only be permitted to handle containers and limited project cargo, and not non-containerised cargo, for 25 years. This is in line with international benchmarks, which will allow Namport to recoup their investment as the contract will entail the expansion of the terminal quay and yard to increase throughput.

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