Dirk Botes, key accounts manager at the port, said the upgrade, which would cost R581 million at 2002 prices, would be effected by reclaiming about 15ha from the sea. It could later be expanded to handle 800 000 containers a year, should the need arise.

It would mean the container terminal would move from the Buffalo River's east to west bank, the same side as the city's industrial development zone (IDZ).

Building would be triggered "when industry commits to volumes", Botes said.

The port was operating at 60 percent of capacity and the $100 surcharge shipping lines charged for delays at South Africa's other ports were not charged in East London. He said that when ports started using about 70 percent of capacity, the authorities started looking at expansion.

The business case for the expansion will come from increased throughput because of the IDZ from DaimlerChrysler South Africa's planned expansion.