Coega – a white elephant or a touch of genius
Apr 17, 2004
Author: Terry Hutson
This article first appeared in The Mercury newspaper (www.themercury.co.za) dated 26 March 2004, as the second of a series looking at the capacity and competing interests of ports in the Southern African region
The Port of Ngqura is a key that may unlock the potential of the Coega Industrial Development Zone (IDZ) and dramatically improve the economy of the Nelson Mandela Metropole (Port Elizabeth) and the Eastern Cape.
These sentiments were expressed by one of the new port’s designers, who later revealed another side by adding, ‘Coega - Joan of Arc for the Eastern Cape, or a white elephant alongside the Addo Elephant Park?’
The origins of the new port and adjacent IDZ go back many years to a proposal of exporting iron ore from the Sishen area of the Northern Cape via St Croix, a rocky island that lies off the coast roughly opposite the Coega River mouth.
The St Croix Island idea fell through when the government of that day opted instead to go with a new dedicated railway being built by Iscor, which entailed the development of a deepwater port and iron ore terminal at Saldanha Bay, but history has its own sense of irony. Frustrations over a lack of capacity on the dedicated Saldanha railway is now leading to renewed talk of exporting iron ore as well as increased volumes of manganese via Coega.
The above story reflects the ups and downs of the Coega story; of a port and IDZ anxiously seeking an anchor tenant that will justify the huge expense of its construction.
Its promoters argue that Richards Bay and Saldanha were also built on spec, without anchor tenants, an argument that doesn’t quite meet the facts. Saldanha was developed as an iron ore port specifically to handle large volumes of iron ore exports from the Northern Cape (currently 26m tons pa), and substantial signed contracts were in hand for the development of a coal terminal at Richards Bay.
In both instances the decision was justified even before and certainly after the event, whereas for Coega it has so far been a fruitless search for that elusive anchor tenant. So much so that we now hear that such a tenant isn’t necessary – the deepwater port is being developed instead as an economic enabler.
“The objective is to stimulate the economy through the IDZ and export manufacturers, including mineral beneficiation and industrial and technology transfer,” says Kelly Byrne, technical and planning executive manager for the Coega Development Corporation.
Notwithstanding the above, progress with building a new port has gone ahead in an impressive fashion and the first ship is confidently expected to sail into the new harbour within the next 12 months. What that ship will be is anyone’s guess, but don’t be surprised if it is flying the flag of a Dutch company and carrying containers, which some would think appropriate for several reasons.
The Port of Ngqura, which was conceived as an industrial port serving the IDZ, will then become South Africa’s eighth commercial port, and provide additional capacity allied to the ability to serve Panamax bulkers, as well as the new generation of cellular container vessels of up to 4 500teus (twenty foot container equivalents).
Work in progress at the new port of Ngqura in Algoa Bay. Picture courtesy Coega Development Corporation>/I>
Initially there will be five berths – two for containers, two for dry bulk cargo, and one for liquid bulk (petroleum products). That doesn’t make for a big port, nor are there urgent plans to extend further. Even the container terminal is planned for moderate volumes of up to 500 000 teus annually, which is about the same as the present Cape Town terminal.
So why all the fuss about Coega? Maybe the reason lies in the vast sums being spent for a port that few outside government and the local community seem to want. In fact it could be argued that Coega is a political port driven for political purposes laced with hope that the economics will eventually be justified.
But perhaps it is possible that the port and IDZ will have the potential to unlock these economies.
By comparison Durban currently expects to handle 1.5 million teus in 2004, and a total of over 50 million tonnes of cargo including petroleum products; an impressive figure by international standards. Any real concerns about the future of Durban have been largely negated with recent developmental projects, including the widening of the port entrance. By 2006/07 Durban should in fact be able to handle much larger container ships of up to 6 500teus.
Any motorist approaching Port Elizabeth from the north can clearly see the outline of the new port and the nearby IDZ. Contrary to earlier belief, the port is not being built along the Coega River, a meandering stream currently occupied by a well-known salt works. The slopes alongside the river are quite steep and will limit port development in this direction without significant earthmoving.
All current port development is taking place near the mouth of the river and the immediate area facing Algoa Bay, with two giant breakwaters 2 600m and 1 500m long providing protection from the ocean swells. The longer eastern breakwater takes a sharp curve to avoid coming within 500m of Jahleel Island, which is home to maritime birds such as the African Penguin and the Roseate Tern.
The visual impact of the port and IDZ is also important due to the proximity of the Greater Addo Park.
From a maritime and commercial perspective Capesize bulkers of up to 150 000-dwt and container ships of up to 6 500teus will be able to manoeuvre inside the port, although the current design capacity limits the vessels berthing to 80 000-dwt for bulkers and 4 500teu for container ships.
A total of 13 million cubic metres of dry earthmoving was required to create the construction cofferdam for the quaywall construction, the basin between the quays and the reclamation of the container terminal, and 14 million cubic metres of material has to be dredged to create the harbour. The Belgian dredger Filippo Brunelleschi is already on site.
Funding of the entire port construction is being handled by Transnet through its subsidiary the National Ports Authority, while funding for the adjacent IDZ, on which progress is being made in leaps and bounds, is coming via central and provincial government.
The Port of Ngqura, possibly the most researched, most analysed and most controversial port development ever undertaken in South Africa, is fast going ahead.
Will it be that white elephant alongside the Addo Park, or a Joan of Arc to the Eastern Cape? Time only will tell.