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Promotion of Economic Grow Development in the Norther FOCUS

De Aar Logistics Hub Centrally located hub will reduce costs and improve efficiency.

Project location

PROJECT VALUATION SUMMARY

De Aar is strategically located in the centre of South Africa. It is a major rail junction at the intersection of the Cape Corridor (Johannesburg to Cape Town), the Namibian corridor (Gauteng to Namibia) and provides a link to the three ports of the Eastern Cape. The N10 road highway (Port Elizabeth outskirts to Upington) passes through the town.

Project cashflows Project IRR

14.1%

Project NPV

197 645

Payback period

8 years

Equity cashflows Equity IRR

Project background

Equity NPV Payback period

There are inefficiencies in the transport sector which restrict economic growth and job creation because over 80% of freight in South Africa is moved via road. The result of this is poor road conditions which have an impact on product quality, product losses and substantial expenditure towards vehicle maintenance and related costs. The result is increased operational expenditure for miners and farmers. The Northern Cape is a major exporter of table grapes, fruit and meat and is responsible for much of the cattle, sheep and goat farming in the country. Long distances and poor access to markets and storage facilities are limiting profitability for farmers. Small-scale and emerging farmers are excluded from exporting due to the lack of critical mass and other dynamics such as access to markets and financial resources. The mining sector has expressed similar concerns. Approximately 60% of the commodities from three large producers (BHP, Kumba and Assmang) is already moved from Hotazel by rail through the province via De Aar or Bloemfontein to Port Elizabeth. Various other commodities are moved via rail through the town of De Aar, of which

18.8% 209 146 8 years

the most notable are cement from Ulco (domestic market), coal and lime, and containers holding general cargo and automotive components. Train drivers and locomotives are changed in De Aar which supports the concept of De Aar becoming a consolidation point for freight to ensure migration from road to rail due to its location and connectivity. The De Aar Logistics Hub serves as the first step for the long-term solution sought by the Northern Cape Department of Transport, Safety and Liaison (NCDTSL) to optimise the freight strategy and logistic functions of the province.

Project desription The project entails construction of an inland intermodal system comprising a container terminal, a vehicle parking terminal, and a warehouse/cold room terminal. Once completed it is envisaged that De Aar Rail Freight Intermodal Terminal will be an internationally accessible trade free zone, with facilities that can handle intermodal operations, warehousing, logistical services and a rail cargo-carrying service.

Project objectives The long-term goal is to provide a sustainable transport network for the transportation of freight/ commodities by miners and farmers using the hub NORTHERN CAPE BUSINESS 2020/21

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Profile for Global Africa Network

Northern Cape Business 2020/21 edition  

The 2020/21 edition of Northern Cape Business is the 10th issue of this highly successful publication that has, since its launch in 2009, es...

Northern Cape Business 2020/21 edition  

The 2020/21 edition of Northern Cape Business is the 10th issue of this highly successful publication that has, since its launch in 2009, es...

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