EQUIPMENT SHORTAGE HAS GROWTH OVER A BIG BARREL

Nearly there!

Trevor Nel always says - there are no such things as 'problems' only opportunities and my goodness, does this not just scream of opportunities. Let's see who does what with those opportunities!

Equipment shortage has growth over a big barrel

March 30, 2007

By Samantha Enslin

Durban - South Africa's R420 billion infrastructure plans are severely challenged by difficulties sourcing port, rail and electricity generating equipment. Alec Erwin, the public enterprises minister, said yesterday at the Intermodal Africa conference: "The challenge is our ability to negotiate in a very tight supply market. If it comes to supplying China or South Africa, let's face it, China will win." The R420 billion boost to infrastructure is the biggest the country has ever seen, but South Africa is not the only country that is expanding infrastructure. "How do we secure supply of capital equipment? How do we ensure South Africa is not forgotten in the race to service China? It is very difficult to find locomotives, gantry cranes, turbines and nuclear reactors," Erwin said. The tight supply situation would not affect the pricing of infrastructure upgrades, as this had been factored into the costs. "We put tenders out and construction companies say they do not have the capacity," Erwin said.

Bloomberg reported that the tender for the R6.5 billion expansion of the Cape Town container terminal was extended after only one bid was received. Erwin said the public enterprises department had embarked on a competitive local supplier development programme to ensure that Africa was supplied with capital equipment from South African suppliers.

But Erwin said this programme was in the early phases and would be rolled out only over the next 10 to 20 years. On how parastatals were addressing the supply problems, Erwin said South Africa was still able to attract international suppliers for its capital expenditure programme. Components for equipment could be manufactured cost effectively and locally, the minister said. Investment in infrastructure over the next five years includes R150 billion in power generation, transmission and distribution; R64.5 billion in ports, rail and pipelines; as well as investment in passenger transport and bulk infrastructure. Investment in ports includes the R2 billion Pier One container handling facility at the Durban port, which is scheduled to be operating in May. The port of Ngqura in the Eastern Cape is also progressing, although at a slower pace. Khomotso Phihlela, chief executive of the National Ports Authority, said: "The Ngqura container terminal will be operating by the end of 2008. The equipment is already in place."The operator of the terminal was still to be decided, Phihlela said. "At this stage it will be SA Port Operations but it may be a joint venture."