The port was officially launched by President Jacob Zuma last week.
The high-profile launch has sought to dispel criticism of the size of the investment in Ngqura.
Government’s recent decision to construct a manganese export terminal at the port has been met with disapproval, because, miners say, using it will be more expensive than Saldanha .
Other traders who have used the port have also experienced higher costs in transporting goods to and from it than has been the case with other ports.
Some analysts have raised questions about the economics of Ngqura, saying government should instead have funded the modernisation and expansion of the Durban container terminal.
But government won’t address questions about the economics of spending R10bn on the new port.
Zuma says the construction of Ngqura and government’s intention to expand it are part of a long-term vision to develop it into a transshipment hub. This would allow a vessel with goods from China that is destined for Brazil, for example, to offload its cargo in Ngqura and for another ship to collect it and take it to Brazil. “Worries and anxiety about Ngqura not being taken seriously must go away,” says Zuma.
Openly conceding that building Ngqura port was not financially viable, Transnet chairman Mafika Mk wanazi says “something needed to be done for the Eastern Cape”. An “instruction to build it was sought from Transnet’s shareholder, government”.
But Transnet leadership and government have said the deepwater port of Ngqura will have a different, though complementary, role to neighbouring Port Elizabeth and East London ports.
Plans to expand Ngqura are already under way. Over the next seven years, the port will receive new cranes to add to the six existing ones. Its berth will also be extended, taking its capacity from 800000 TEUs (20-foot equivalent units) to 2m by 2019. The investment will cost R8bn-R10bn, says Transnet CEO Brian Molefe.
Government’s decision to export manganese from Ngqura will also necessitate the construction of a manganese terminal. This will replace the facility at Port Elizabeth’s port. Once two planned manganese smelters are built within the Coega industrial development zone, an expected 2Mt of the 12Mt planned annual capacity of Ngqura will be beneficiated before it is exported.
Officials insist that Ngqura’s investment is not to the detriment of East London and Port Elizabeth. Ngqura, says Molefe, is attracting business that SA would never before have received.
Port Elizabeth will lose its manganese terminal, but its car export terminal will be upgraded, says public enterprises minister Malusi Gigaba. Land that is now used for port activity will be transformed into a waterfront with hotel, leisure and possibly even residential facilities.
Nelson Mandela Bay Business Chamber CEO Kevin Hustler says Port Elizabeth’s port has not declined in the face of high investment into Ngqura. Instead, its volume of smaller ships has increased as Ngqura absorbed larger vessels and transshipment business.
Hustler believes the construction of Ngqura is a long-term investment that will yield enormous benefits. Already, he says, the city’s economic activity has increased. Ngqura’s construction has injected life into Port Elizabeth’s logistics industry. Hustler has recently met with increasing numbers of international business delegations looking for opportunities in the city.
In a move that will please business, Zuma announced that a R1bn rebate from Transnet on port charges will be extended to exporters of manufactured goods from April 1.
However, Transnet may find it difficult convincing business to divert trade through Ngqura instead of using facilities like Durban because of the cost of inland transportation.
Its ability to reduce inland transport costs will be critical to realise returns on its investment into Ngqura. In the future, government leaders say, decisions about large infrastructure projects will be taken only if feasibility studies affirm their financial viability.
Article source: http://www.fm.co.za/Article.aspx?id=167994