Tugboat tender saves SAS from doldrums

The Durban-based Southern African Shipyards (SAS) has won tenders worth R400 million to build five tugboats for Transnet for delivery in 2010.

The tugs were being procured through two tenders: one directly from Transnet for three tugs for the Port of Nqgura, and one with Transnet National Ports Authority (NPA) for two tugs for Durban. The Ngqura contract was signed in July, the Durban contract late last month.

The tugs would be delivered at two-month intervals in 2010 and between 30 and 40% of the contracts’ value would be imported, as the engines and propulsion systems would be supplied from Germany. All construction work would be done in South Africa and about 250 jobs would be created. SAS had begun to build capacity to service the contract, by hiring people and equipping the site.

The contract was significant, as it put SAS in a stronger position to secure other deals from potential offshore clients. SAS is confident that there will be more work to bid for. For instance, the SA Navy has indicated that it will be procuring naval vessels.

SAS was in the doldrums for many years before Maharaj and chief operating officer Louis Gontier developed its site in Durban into the Bayhead Marine Industrial Park, with a range of tenants focused on ship repairs. Last year the KwaZulu-Natal Growth Fund provided a R24 million loan to redevelop the site. This enabled the two to buy the almost defunct business that held the lease to this prime harbour site and its cranes, welding machines and scaffolding. The lease runs until 2022.

The unsuccessful bidders for the Transnet tugs included Farocean Marine, a Cape Town-based business that has built three inshore fisheries patrol vessels for the department of environmental affairs, along with many other vessels. Another unsuccessful bidder was the joint venture between Dormac and Damen Shipyards in Holland.