1. TRANSPORT LIBERALIZATION: Maritime Maritime status

2. CONTENTS Global Maritime overview Maritime trade in services overview Maritime trade in services by country Key issues and recommendations Way forward

3. MARITIME SECTOR OVERVIEW

4. SADC ports are part of an international network Services to West Africa (examples) Midas Frequency Vessels Duration Smallest vessel Largest vessel Week 10 70 days 1,700 TEU 2,490 TEU CMA/CGM Midas CMA/CGM Angola Shutle Angola Shuttle Frequency Vessels Duration Smallest vessel Largest vessel 8 Days 5 49 days 1,800 TEU 2,200 TEU Some west coast services use hubs in Europe and the Mediterranean Lines include Maersk, OACL- Safmarine, OATL, MSC

5. SADC ports are part of an international network Services to East Africa (example) NYK Service Frequency Vessels Duration Smallest vessel Largest vessel 10 Days 5 50 days 400 TEU 800 TEU MSC operates a service to East Africa using the Salalah hub Other lines include Ethiopian Shipping Lines, Messina, H&H lInes, Delmas NYK

6. Export corridors are being developed Regional rail corridors are being developed in East Africa and West Africa to unlock export potential These require co-operation and harmonisation along entire corridors, including across countries Africa is rapidly developing as a strategic supply of resources Both east and west coast have mineral and other natural resources

7. Maritime industry developments Larger vessels require upgraded infrastructure – Largest container ship is the Maersk Triple-E class (18,000 TEU) – Largest container vessel to call in Durban (MSC Sola - 11,660 TEU) Ports aspire to hub status – Improved frequency, service levels – Reduced cost/TEU The industry dominated by relatively few international entities – Global terminal operators control 71% of container capacity (includes public sector operators e.g. PSA) – Top 5 operators control almost 50% of capacity Shipping lines are coming off a period in which they incurred severe losses

8. Key issues Ports handle over 90% of import-export cargoes Shipping lines are highly mobile Port and hinterland capacity has not kept pace with demand throughout the Region Congestion and delays result in higher costs to cargo owners (missed calls, surcharges, etc.) An under-developed maritime sector constrains economic growth

9. Factor that support a successful maritime sector Connectivity – Trade routes – Hinterland Volume Infrastructure Support services Trading environment Partnerships

10. MARITIME TRADE IN SERVICES

11. Maritime trade in services The SADC Protocol on Trade in Services (PTCM) in transportation is expected to reduce or remove barriers that impede the flow of trade between SADC countries The maritime sector for this study includes vessel operations (sea freight and sea passengers), and supporting services for maritime transport, namely WTO codes 7211, 7212 and 745** Maritime countries within SADC are the Democratic Republic of the Congo(DRC), Angola, Namibia, South Africa, Mozambique, Tanzania, Mauritius and the Seychelles The objective of the PTCM is facilitate an efficient, cost effective and fully integrated infrastructure and operations The process is expected to result in request-offers by August and initial offers (including transport) by November 2012

12. PTIS (maritime) key elements Maritime transport is an area of strategic importance to regional economic growth Realising the potential of this sector requires harmonised international and regional transport policies and regulations It is understood that developing coastal shipping, encouraging joint ventures with the private sector are key components for developing the sector Regional co-operation and harmonised tariff structures should not result in uncompetitive business practices

13. Issues affecting implementation The port sector has strong control and influence from government in all SADC countries. The industry often reflects national priorities Investment backlogs, inefficient port operations and undeveloped skills are critical factors affecting the industry Relatively low volumes limit the ability of SADC maritime nations to negotiate service and price advantages with large international carriers Creating capacity and requires large-scale investment. Skills development also requires investment and co-ordinated effort SADC countries are at different levels of implementation regarding international maritime regulations and conventions

14. Liberalisation status (maritime) No maritime states currently restrict foreign flagged vessels. Angola is considering a state-owned shipping company Coastal maritime trade is restricted in Angola, Tanzania Private sector participation – Only Mozambique has private sector involvement in port authority functions – All SADC countries support concession arrangements for port operations – Only Mozambique has an initiative to privatise marine services. South Africa considers this an option

15. MARITIME TRADE IN SERVICE BY COUNTRY

16. Maritime trade in services by country Angola Democratic republic of the Congo Mauritius Mozambique Namibia South Africa Seychelles Tanzania

17. Maritime sector profile Angola OwnedDominated ByComments Cargo vesselsPrivateInternationalMajor lines PassengerPrivateInternational Ship repairBothSonagolPrivate sector participation Agency and other support PrivateDelmasShipping line affiliates AuthorityPublicOnly provider MarinePublicRegional port authorities OperationsPublicSogester (Luanda) DepotPrivateMaersk RailPublic Resources attracting investment, including from China Strong government influence in the sector

18. Maritime trade in service environment: Angola Current status – Priority given to national economy. Priorities for Angolan companies – Not yet taken binding commitments to WTO – Controlled entry long-distance maritime and access for coastal shipping is limited – Concession and private sector involved in port operations, ship repair – Limited transparency Developments – Intention to establish a state owned shipping company may result in restrictions on foreign vessels Luanda Port

19. Maritime sector profile Democratic Republic of Congo OwnedDominated ByComments Cargo vesselsPrivateInternationalMajor lines PassengerPrivateLocal operatorsLocal transport Ship repairPrivateMinimal activity Agency and other support PublicSEP (bunkering)Also private shipping agents AuthorityPublicOnatraOnly provider MarinePublicOnatraOnly provider OperationsPublicOnatra Depot RailPublicOnatra State-owned Onatra is the dominant provider Lack of deep water capacity adds time and cost to cargo Volumes remain low

20. Maritime trade in service environment: DRC Current status – Port revenue used to subsidise other Onatra divisions – Political climate coming off an unstable base – Port authority and operations (mostly) performed by Onatra – Approval required for market entry – Ratio of foreign to national employees a restriction ( mode 4) Developments Recently joined OHADA to improve legal stability and facilitate regional economic integration Lack of capacity to progress harmonisation and liberlaisation Matadi Port

21. Maritime sector private profile Mauritius OwnedDominantComments Cargo vesselsPrivateInternationalMajor lines PassengerPrivate Ship repairPrivateLimited Agency and other support PrivateShipping line affiliates AuthorityPublicMauritius Port Authority Different share- holding by port MarinePublicMPAOutsourced OperationsPublicCargo Handling Corp. Depot Rail Cargo Handling Corporation is a government owned operation Private firms handle oil tank farms, fertiliser, flour, cement, etc.

22. Maritime trade in service environment: Mauritius Current status – No current concessions for authority and port operations – Private sector currently excluded form container operations and other designated general cargoes – oPrivate sector currently excluded form container operations and other designated general cargoes – oForeign equity ownership subject to approval (some areas restricted to nationals) Developments —Initiative to concession the container terminal is being revivied Port Louis

23. Maritime sector private profile Mozambique OwnedDominantComments Cargo vesselsPrivateInternationalMajor lines PassengerPrivateMSC Ship repairPrivateSmall dock facilities Agency and other support PrivateShipping line affiliates AuthorityMixedCFMDifferent share- holding by port MarinePublicOutsourced OperationsMixedDP Ports Grindrod DepotPrivate RailPublic Mozambique has regional port authorities, each with a stake held by state-owned CFM Port services provided by authority and operators

24. Maritime trade in service environment: Mozambique Current status – Concessions for authority and port operations – Cabotage by coastal vessel limited to national individuals / companies – Regulations that prevent ownership of land are restrictive – Regional transit bond guarantees – New Labour Law restricts the hiring of foreign staff Developments —Increasing focus on governance to improve transparency Maputo Port

25. Maritime sector private profile Namibia OwnedDominantComments Cargo vesselsPrivateInternationalMajor lines Passenger Ship repairPublicNamportNamport operates dock facilities Agency and other support PrivateShipping line affiliates AuthorityPublicNamportOnly provider MarinePublicNamportOnly provider OperationsPublic Private Namport Grindrod Containers Mainly dry bulk DepotPrivate RailPublic Namport provides both authority and operations functions Trans Namibia corridor seen as an opportunity for growth

26. Maritime trade in service environment: Namibia Current status – State owned entity Namport engaged in landlord and port operations – Some private terminal operations – No foreign company may provide towing services – Access by foreign nationals remains difficult Developments ―Corridor initiatives to promote regional co-operation ―Planned container expansion considering private investment Walvis Bay Port

27. Maritime sector private profile South Africa OwnedDominantComments Cargo vesselsPrivateInternationalMajor lines PassengerPrivateMSCSeasonal Ship repairPrivateSA shipyards, Dormac, ++ TNPA owns dry dock facilities Agency and other support PrivateBidvest, Grindrod, ++ Shipping line affiliates AuthorityPublicTransnetOnly provider MarinePublicTransnetOnly provider OperationsPublic Private Transnet Grindrod, Bidvest, ++ In all sectors Mainly dry bulk DepotPrivateSACD, ++ RailPublicTransnet Transnet is the dominant provider in the sector Extensive private sector involvement in shipping (non-local), ship repair, agency and port terminal (non-container) operations

28. Maritime trade in service environment: South Africa Current status – State owned entity controls ports and engaged in port operations – Competition in bulk, general purpose cargoes – Policy and regulations to encourage private sector participation – Restrictions on foreign employees ( mode 4) Developments —Transaction advisor appointed for Ngqura Container Terminal. Also enquiry for new dig-out port in Durban —Revised maritime policy being drafted Ngqura Port

29. Maritime sector private profile Seychelles OwnedDominantComments Cargo vesselsPrivateInternationalMajor lines PassengerPrivate Ship repairPrivateSmall Agency and other support PrivateShipping line affiliates AuthorityPublicSeychelles Port Authority Only provider MarinePublicSPAOnly provider OperationsPublicSPA Depot Rail Seychelles competes with Mauritius, Madagascar, Reunion for passenger volumes Shallow draft except for Mahe Quay (9.5m – 11.5m)

30. Maritime trade in service environment: Seychelles Current status – State owned entity controls ports and engaged in port operations – Foreigners require permission to own land – Investment in port infrastructure a reserved strategic area – permission subject to conditions – Restricted and strategic areas limits competition and limit attractiveness to foreign investors – Gainful Occupation certificate issued once no suitable Seychellois application Developments —Seychelles is currently negotiating accession to WTO. GATS schedule Port Victoria

31. Maritime sector private profile Tanzania OwnedDominantComments Cargo vesselsPrivateInternationalMajor lines PassengerPrivateSeasonal Ship repairPrivateSmall scale Agency and other support PrivateShipping line affiliates AuthorityPublicTPAOnly provider MarinePublicTPAOnly provider OperationsMixed Public TICTSContainers Mainly dry bulk DepotPrivate RailPublic Transnet is the dominant provider in the sector Extensive private sector involvement in shipping (non-local), ship repair, agency and port terminal (non-container) operations

32. Maritime trade in service environment: Tanzania Current status – State owned entity controls ports and engaged in port operations – Container terminal (TCITS) has been concessioned – Only Tanzanian ships in coastal trades – Restrictions on foreign equity ownership (60% in listed companies) – Increasing cost of permits for foreign workers Developments —Fair Competition Act to promote effective competition —Extensive port and hinterland developments planned Dar Es Salaam Port

33. KEY ISSUE AND RECOMMENDATIONS