eThekwini Municipality 2050 vision for the Durban to Gauteng Freight Corridor: What this means for Durban? Andrew A. Mather eThekwini Municipality

High Level Cost Estimates Socio Economic Benefits Presentation outline Context Roads Back of Port Land use High Level Cost Estimates Socio Economic Benefits Critical Decision Matrix Conclusion Recommendation

CONTEXT

OBJECTIVES The 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.

THE 2050 VISION The 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 plans

DURBAN to GAUTENG TRANSPORT CORRIDOR TRANSPORT CORRIDOR COMPONENTS DURBAN to GAUTENG TRANSPORT CORRIDOR PASSENGER TRANSPORTATION FREIGHT TRANSPORTATION & LOGISTICS Port Road Rail Air Road Rail Air Pipe Intermodal Hubs & Terminals Supportive Land Use Planning 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

STRATEGIC ALIGNMENT TO NATIONAL STRATEGIES AND POLICIES 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 Responds to crumbling infrastructure Resource Intensive economy Reduce poverty and inequality through lowering logistics costs and through BBBEE and local development via public investment 2050 VISION IPAP2 NFLS NGP NATMAP OUTCOME 6 NPC DIAGNOSTIC Prioritises corridors Identifies need to reduce logistics costs 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 Reducing logistics costs improves competitiveness and creates more jobs Infrastructure investment creates direct and indirect jobs Addresses backlogs and bottlenecks in logistics Prioritises corridors Opportunity for private sector participation in terminal operations

MAJOR PHASES OF DEVELOPMENT The 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.

Institutional Framework DoT Minister (National Champion) DoT Director-General (Chairman - Steering Committee) DoT Deputy Director-General: TL&CD Steering Committee Secretariat/PMU DoT DPE the DTI Treasury Presidency & NPC Provincial Governments KZN, Gauteng & Free State SANRAL ACSA RTMC PRASA Transnet Metros/Municipality Jhb & Ethekwini Work Streams Planning & Infrastructure Socio-economic , Finance & Funding Legislation, Policy, Regulation , Compliance & Environment Communication National Champion: Facilitate inter-ministerial alignment and Cabinet approval Steercom Chairperson: Ensure administrative and technical alignment in government Steercom Members: Responsible for sectoral adoption and alignment

INSTITUTIONAL FRAMEWORK: WORKSTREAMS Steering Committee Policy, Legislation, Regulatory, Compliance Workstream Socio-economic, Financing and Funding Communication Planning + Infra- structure Implementation Project Management and Co-ordination 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. Prepare and consolidate infrastructure plans for port, freight and passenger rail, road, terminals and land use. Drive project delivery to meet objectives. Advise on PLRC requirements, and ensure compliance. Facilitate PLRC changes required to support the project.

The 2050 Vision Poster

ROADS

N3 Road Needs R15,32bn PRIORITY DUE BY DESCRIPTION LENGTH COST 1 2020 (km) COST (2010 Rands) 1 2020 Cato Ridge to PMB to 6 lanes & PMB I/C’s upgrade 21,5 R2,05bn 2 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 PMB Bypass 60 R3,65bn 6 2025 Heidelberg - Germiston 40 R1,0bn 7 2035 Germiston - End 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

Major Road Infrastructure Proposals from Port of Durban to Cato Ridge Phase 1c: Mariannhill to Cato Ridge Port of Durban Phase 1a: Port to Mariannhill Phase 1b: North – South Freight Route Major Road Infrastructure Proposals from Port of Durban to Cato Ridge Legend 2010-2025 : Implementation Phasing : : : Dedicated Road Freight Route

Freight Route Phasing - Roads Phase 1b: North – South Freight Route and Complementary Upgrades Phase 1a: East – West Freight Route: Port to Mariannhill

URBAN PLANNING AND ECONOMIC POTENTIAL ASSESSMENT Typical Route Impact Analyses Broad Land Cover Key Industrial Clusters Industrial Accessibility ETA FREIGHT CORRIDOR STUDY

BACK OF PORT LAND USE

Back of ports ha required Year Back of ports ha required 2011 150 2014 179 2017 204 2019-2037 628 2037-2050 878 Back of Port Land Uses

HIGH LEVEL COST ESTIMATES

INFRASTRUCTURE ELEMENT INDICATIVE COSTS INFRASTRUCTURE ELEMENT COST (R billion) PORT (Current port expansions, DIA digout port and Bayhead digout) 150 RAIL Line capacity Inland Terminals Coastal Terminals 111 44 33 34 ROAD 20 PIPELINE 25

SOCIO ECONOMIC IMPACT

PRELIMINARY SOCIO-ECONOMIC ANALYSES INFRASTRUCTURE ELEMENT CONSTRUCTION JOBS OPERATIONAL 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

3. Increases in income/wages generation Economic impact cycle Economic Impacts 1. New business sales – new levels of demand generated by the port’s construction and development 2. Economic expansion - the growth in local and national economic production (gross geographic production) and supply 3. Increases in income/wages generation 4. Direct on-site jobs, supporting (induced) jobs as well as job opportunities

Increases in Economic Demand Demand for construction materials has a positive spin-off on national economy, generates NEW BUSINESS SALES. Total New Business Sales Phase 1: R54.3b Phase 2: R22.6b Phase 3: R21.3b Phase 4: R19 2b TOTAL: R117.6b

Increasing Local Production As business sales increase – this requires a significant increase in local production output, and generates NEW PRODUCTION referred to as GROSS GEOGRAPHIC PRODUCTION. Total New Production (GGP) Phase 1: R22.4b Phase 2: R8.9b Phase 3: R8.4b Phase 4: R7.6b 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 Impact Phase 1: R11.2b Phase 2: R4.5b Phase 3: R4.2b Phase 4: R3.8b 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 Rail 1.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 authority Purple - joint stakeholder decision required Red - decision to be made and driven by steercom

Phase 2 (2020 - 2037) Port Freight Rail High Speed Passenger Rail 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 authority Purple - joint stakeholder decision required Red - decision to be made and driven by steercom

Phase 3 (2038 - 2050) Planning / Critical Decisions Infrastructure Port 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. 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 authority Purple - joint stakeholder decision required Red - 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