Cruise Industry

Industry Focus: Why South Africa needs a Durban Cruise Terminal

South Africa’s cruise industry is one of the most resilient and fastest growing in the world, but has remained largely beneath the radar of most major cruise lines apart from MSC Cruises.

However, tourism officials in SA plan to change this with the development of the new Durban Cruise Terminal, which is expected to be completed by 2019.

Andrew Pike, head of the Ports, Terminals and Logistics group at pan-African law firm Bowmans, the under-development of South Africa’s cruise industry, and the reluctance of international cruise lines to homeport in the country is largely due to SA’s lack of facilities.

“There isn’t a large cruise ship industry around Africa, mainly because of poor facilities,” he says. “Other than Cape Town, which has its own modern cruise terminal, most African ports are commercial and not geared for tourism, so there aren’t a lot of places where cruise ships can call.”

Durban has been South Africa’s primary homeport destination for MSC Cruises for several decades, while Cape Town is the country’s cruise hub for all other international lines.

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“An attraction like the Durban Cruise Terminal could be just what the African cruise industry needs,” says Pike, and may prompt more cruise lines to take a chance on a South African cruise season.

This is what the United Arab Emirates did over the last ten years, developing newer, more advanced cruise ship infrastructure in the hope of growing the Middle East cruise market. That risk has paid off, with a 5-10% year-on-year growth over the last ten years, with six major cruise lines now homeporting in Dubai and Abu Dhabi annually.

Pike leads the Bowmans team that is advising Kwa-Zulu Cruise Terminal Pty Ltd (KCT), the preferred bidder for the tender to develop, construct and operate the new state-of-the-art facility at the Port of Durban.

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Bowmans has worked on numerous African port projects, including the proposed Durban Dig-out Port and major port facilities in Mozambique’s Port of Nacala, Ghana’s Freeport of Atuabo and Tanzania’s Dar es Salaam Port.

Pike says that the new Durban Cruise Terminal will be a far-cry from the current aged passenger terminal at Durban’s N-Shed wharf, which was partially redeveloped several years ago at the insistence of MSC Cruises.

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“This won’t be any old cruise terminal; it will be a new and iconic structure in Durban, with international-class cruise facilities that link up with existing tourist attractions such as uShaka Marine World, offering cruise ship passengers a ‘whole’ experience,” Pike says.

This ‘whole’ experience from the moment of disembarkation is essential for the running of a successful cruise sector. At Dubai Cruise Terminal and Abu Dhabi Cruise Terminal, passengers are able to have their luggage delivered directly from the airport to terminal when flying with Etihad or Emirates, while hourly shuttle busses take passengers to major attractions in the city for free, including Dubai Mall.

A world-class cruise experience is essential if Africa is to increase its share of the lucrative, but highly competitive international cruise industry, especially given its remote location at the southern tip of Africa, a location that does not provide the same strategic advantage as the Middle East, between the major cruise markets of Europe and Asia.

“In Africa, this is an industry with underserved tourism potential. Although the number of visitors to Durban has been increasing, to around 191,000 in 2016, the hope is that this will grow with the advent of the Durban Cruise Terminal, which is anticipated to be operational early in 2019,” says Pike.

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The preferred bidder, KCT, is a joint venture between MSC Cruises SA and Africa Armada Consortium, a black empowerment partner. MSC Cruises is the world’s largest privately held cruise company and the fourth largest overall, with a history of investing in ‘under the radar’ cruise markets. It homeports annually in South Africa as well as Brazil, two small but highly lucrative markets.

Pike says that KCT will receive a 25-year concession agreement with Transnet National Ports Authority. The process for the awarding of such a concession is relatively new, carried out under section 56 of the National Ports Act.

“To date, only a handful of concessions have been granted in South Africa under the section 56 process and each concession agreement is signed after a period of negotiation,” he says. “As port specialists, we see our most important role as facilitating win-win solutions between the parties.”

The Durban Cruise Terminal has widespread support among the public, government and private sector, says Pike. “The sentiment is that this project makes sense, gives Durban credibility as a tourist destination and is good for the cruise industry.”

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