Freeport Saldanha SEZ unlocks R4bn investment after legal resolution
Landmark agreement resolves years of conflict between the Ports Act and SEZ Act, paving the way for a national pilot framework and a major green-hydrogen hub.
By Larry Claasen
THE red tape holding up the development of Freeport Saldanha – the Special Economic Zone (SEZ) in Saldanha Bay – is finally being cleared, opening the door to major investments.
Established in 2013 as the first SEZ to incorporate a working port, Freeport Saldanha was designed to attract investment in oil, gas, marine and related services. More recently, it has been earmarked as a cornerstone of South Africa’s ambitious Green Hydrogen programme.
Ports Act vs SEZ Act: a legislative clash
However, its progress has been hamstrung by a persistent “misalignment” between the National Ports Act – which dictates that Transnet runs the country’s ports – and the SEZ Act, which places SEZs under provincial control. According to a presentation to parliament in June, the Department of Trade, Industry and Competition (DTIC) said the conflicting legislation over who was responsible for what had created investor uncertainty and resulted in slow project execution.
This legislative dilemma carried significant financial consequences. It created confusion over the respective obligations of the two entities, undermining coordinated investment and long-term commitment, and making it difficult to attract outside investors.
“Without synchronised land-leasing and infrastructure investment, high-value investors may not commit, weakening the business case for port infrastructure and reducing economic impact,” the DTIC said. It added: “Fragmented regulatory authority between landside and waterside infrastructure makes integrated investment difficult, threatening bankability and slowing project delivery.”
Provincial report warns of litigation risks
A report by the Western Cape provincial legislature, released in March 2025, echoed these concerns and highlighted the legal risks. “The lack of alignment between the Port Act and the SEZ Act has caused significant challenges,” the report stated. “Numerous engagements took place, at times nearly leading to litigation, due to substantial investments in port land rental without any tangible returns.”
The report also noted the difficulty of matching investment commitments. While the DTIC has invested R300 million and the Western Cape government has injected R1,2 billion, Transnet’s financial constraints have delayed port-side development. “These delays have forced the SEZ to shift its strategy to accommodate the situation. At a broader level, this issue highlighted the need for government entities to work collaboratively in a developmental approach.”
Breakthrough: Commercial Terms Framework agreed
Fortunately, this issue is now being addressed. In the same parliamentary presentation, the DTIC confirmed that a Commercial Terms Framework (CTF) and lease agreement between Freeport Saldanha and the Transnet National Ports Authority (TNPA) was being concluded. The CTF is regarded as a critical step towards ensuring sustainable, mutually beneficial operations within the zone and providing much-needed investor certainty.
Ministerial intervention speeds up process
The breakthrough followed a formal request from Freeport Saldanha to Trade, Industry and Competition Minister Parks Tau in December 2025 to expedite the process. That prompted technical engagements between Freeport Saldanha, Transnet and the TNPA.
The CTF for the Southern Precinct of the SEZ – which includes large-scale logistics hubs, manufacturing plants and port facilities central to the zone’s industrial activity – has now been concluded. “This marks a key breakthrough and establishes the basis for new commercial arrangements between Freeport Saldanha and TNPA,” the DTIC said.
R4 billion in committed projects on the horizon
The agreement is already unlocking lucrative opportunities. “The finalisation of the CTF and forthcoming conclusion of a new long-term lease between Freeport Saldanha and TNPA will unlock R4 billion in committed investments that require access to land and enabling infrastructure on the TNPA-owned portion of the SEZ,” the department added.
The DTIC also argued that there is now a clear opportunity to harmonise implementation through bespoke regulations for SEZ–port interfaces, including standardised head-leases, clarified risk-sharing and single-window approval. “Freeport Saldanha is the most logical ‘sandbox’ to pilot this proposed new National Port–SEZ Framework before rolling it out to other SEZs and ports,” it said.
This is critically important, given Transnet’s plans to develop a R13,8 billion deep-water port at Boegoebaai in the Northern Cape, alongside that province’s own plans for an SEZ in the area.
