MSC Cruises to invest R200-million in new ‘Durban Cruise Terminal’

Finally, after years of delays and political wrangling, news broke recently that MSC Cruises’ South African subsidiary (MSC Cruises SA) and the Africa Armada Consortium, were teaming up to redevelop the passenger terminal in the Port of Durban.

The new ‘Durban Cruise Terminal’ will be developed on the existing cite of the current outdated terminal by KwaZulu Cruise Terminal Pty Ltd (KCT), a joint venture formed by MSC Cruises SA and Africa Armada Consortium (a black empowerment partner).

MSC Cruises SA will own 70% of the project, and AAC will own the remaining 30%.

The announcement was made by Transnet National Ports Authority (TNPA) Chief Executive, Richard Vallihu.

“Despite the pressures of the global economic climate on disposable incomes, the global luxury cruise sector remains one of the fastest growing segments in the tourism industry and has the potential to grow the economy and create jobs,” Vallihu said.

“The Durban cruise market had grown from 75 947 passengers ten years ago to 191 412 passengers last season. Already we have at least 20 international cruise liners operated by 14 cruise lines calling at South Africa’s ports,” he added.

Capital investment for the project would be in excess of R200 million and the bidder will be responsible for the design, financing, construction, operation, maintenance and transfer of a Cruise Terminal Facility for a 25-year concession period in the Port of Durban.

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Vallihu said the preferred bidder, KwaZulu Cruise Terminal Pty Ltd (KCT), had put together an exciting concept and had the experience to deliver a facility that would be the jewel in the crown of the Port of Durban.

For most cruise industry observers, MSC Cruises has long been the most obvious choice of investment partner, the cruise line has been homeporting a cruise ship in Durban during the summer months for more than 20 years.

The current passenger facility, N-Shed, was upgraded ahead of the 2015/16 season, but remains woefully outdated for the needs of the modern cruise industry, making Durban a sideline cruise destination for all the major cruise lines except MSC Cruises.

The new Abu Dhabi Cruise Terminal (top) compared to the current passenger terminal at N-Shed in Durban shows the urgent need for modernisation.

In 2014, MSC Cruises launched an investment plan to support the second phase of its growth through the order of a total 11 new, next-generation MSC Cruises ships through 2026 for a total investment of more than R100-billion.

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The company is the first global cruise line brand to develop an investment plan of this length and magnitude, spanning a horizon of over ten years and the expansion of its fleet is expected to see a ‘tonnage cascade’, in which cruise ships deployed in ‘emerging markets’ such as Brazil, the Middle East and South African become larger.

This has already been seen in the Middle East, where the MSC Lirica was replaced with the much larger MSC Musica and Fantasia several years ago. In Brazil, MSC Cruises will be deploying its gargantuan new MSC Seaside cruise ship, while in South Africa the mid-size MSC Sinfonia has been replaced by the much larger MSC Musica.