The word port is usually associated with the coast and the sea, but developer Francois Nortjé has chosen the name port for his new ‘Distribution Junxion’. According to his website it will become a ground breaking inland port that sits on the entry and exit points for imports into and exports out of Gauteng.” Up to now, Transnet has controlled the railways, ports and pipelines in the country and the Department of Public Enterprises is the sole shareholder on behalf of the Government. But in his turnaround plan for the economy, Finance Minister Tito Mboweni indicated in August last year that he wants to introduce competition in ports and rail and encourage private sector participation. Third-party access would be granted to the rail network. Nortjé wants to capitalise on this and has found just the right piece of land to build his inland Port of Gauteng. He told Alec Hogg that his company plans to cut the current turnaround for transport containers which take four days at City Deep/Kaserne’s inland terminal to an hour. – Linda van Tilburg
Francois Nortjé started out selling plots of lands or stands on the corner of Republic and William Nicol in Randburg. From this he became a specialist in selling land and was involved in other commercial property developments including Makro in Wonderbook, Linbro Business park in Sandton and Damelin in Randburg. As he put it, “ I have been a land converter for 32 years.”
The idea to improve the efficiency of transporting goods from South Africa’s ports into the heartland of business came to him when his best friend, who has been importing tiles for 40 to 50 years told him that the best place for an import-export business in Gauteng, is south of the N12 in Alberton and Boksburg, near the N3. He judged that it could be a good position for a distribution warehouse, but industrial and commercial property, “wasn’t a big flavour of the month in South Africa for many years: with developers concentrating on retail sales and offices.”
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That was until eight years ago when warehouses and logistics started becoming a big part of property investments and he says” it is now the number one property class in the world. It is no longer retail and offices.” He said with this in mind, “we drove out there and went to look at the land and to our amazement found the land was extremely flat. There’s a railway line, two provincial roads that dissect each other there. And we took an option over the first piece of a hundred hectares next to the railway line and started a town planning application to see if we could get services.’ They battled for a while to get electricity, but eventually managed and started buying up the rest of the land. They were after big portions in order to have enough land for security parks.
Nortjé acknowledged that concentrating on rail may be “slightly problematic” because the route between the port in Durban and Johannesburg took about eight hours by truck, which means that rail needed to be very efficient to compete. He said the land that his company bought first was a 2.2km stretch next to the Durban railway line, which meant that a very efficient terminal could be designed and with new “methodology of loading the trains and off-loading the trains because you’ve got all the space… we think we can turn a train around in one hour if we really want to, whereas at City Deep and Kaserne; it can take up to four days to turn a train around.” This is according to a World Bank Report that was done by Dr Duncan Pieterse from the Treasury.
Nortjé pointed out that Finance Minister Tito Mboweni was in support of private terminals and said up to about 10 years ago, very few containers were unpacked in Durban. But due to the slow train turnaround times; importers presently unpack containers in Durban, leave it there and bring the goods up on a flatbed truck, because rail is so inefficient.
Responding to a question on whether the new Chief Executive Officer of Transnet, Portia Derby, who promised this weekend to clean up the SOE rot, had been in touch with Nortjé, he replied that he had not been contacted by Transnet, but that the World Bank had been in touch with him. Nortjé said he believed the time is right for a private terminal, not a Transnet terminal. He did not have anything against Transnet, but believed that private enterprise will work a bit quicker than a SOE.
“It is private land and is privately owned and we fund it privately. So, we prefer to have a private operator there. But if Transnet can deliver performance standards; we would gladly let them develop that terminal. But I don’t want to let them develop a terminal that operates like City Deep and Kaserne.” He said his company owns the surrounding land and the land would be more valuable if the terminal works well. If there is an operator at the Gauteng port that can turn a train around in an hour, demand for the rest of their land and warehouses increases and the value of his land would increase.
Nortjé said he believed that Transnet should allow private operators and thinks that it would happen. He said his company would not be the operator and once they have decided on an operator; they will go to Transnet and ask for two trains a week in the beginning, or three trains and grow it from there. He said he was sure it would grow very quickly because people will see that the Port of Gauteng’s terminal is quite efficient. “So, you’ll get your container within hours, instead of days and I can’t see that Transnet will refuse it because we want to assist the government because the government has got this Road to Rail initiative and we’ve got a terminal that is much more efficient than the state ones. And I’m sure they’ll gladly want to work with us and allow us to operate the terminal and then you just have to book trains from Durban harbour to the Port of Gauteng.”
The total investment based on 1.2 million square metres of potential warehousing at a cost of R8,000/m2 equates to R9.6bn (say R10bn). Nortjé says although he had Australian permanent residency; he found he could not fit in and prefers to stay in South Africa. He says he does not want to live somewhere else. “I just I have to bunker down and make it work and do my bit and hope everybody will do it. And you know, I’ll just make it work” he said.
