De Aar Logistics Hub

  • Project location: De Aar, Pixley Ka Seme District, Northern Cape Province, South Africa.
  • Number of employment opportunities: 2,475 (temporary and full-time)
  • Investment value: Total value of the project is R600-million.

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 description

The Project entails construction of an inland intermodal system comprising:

  • Container Terminal – consolidation of freight
  • Vehicle Parking Terminal
  • Agricultural Warehouse/Cold Room Terminal

The province has focused its priorities (in alignment with the National Development Plan – Vision 2030) and identified priorities to enhance the quality of life of the community.

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 large producers 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 the most notable are cement from 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.

The Key Priorities which could be addressed through these projects are:
  • Expanding infrastructure
  • Economic development
  • Creating jobs and therefore contributing positively to the livelihoods of the people of the province
  • Transforming the spatial reality
  • Improving education and training
  • Addressing the social ills of the province.
Potential commodity mix:

The Northern Cape has many commodities that can be traded and transported via the De Aar Logistics Hub, which could serve as a catalyst for local and regional economic development (see table below).

Project financed by:

Public-Private Partnership (PPP), Equity partners/investors. The proposed funding structure entails a cash equity injection of 15% and the balance being funded through senior and sub-ordinated loans.

Project status:

Initial Government Announcement, Project Investigation and start of Project Feasibility / Business Case completed.

Partnerships:
  • Provincial government (DTSL)
  • District and local municipalities
  • Consultants.

Contact

Interested parties may contact the Department of Economic Development & Tourism with subject line: ‘De Aar Logistics Hub’, below:

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