R3bn bill for Coega

Posted On Thursday, 27 September 2001 03:01 Published by eProp Commercial Property News
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The taxpayer could face a R3-billion bill for the construction of the controversial Coega deepwater port and industrial zone, Parliament was told yesterday.

Property-Housing-ResidentialCoega Development Corporation CEO Pepi Silinga told Parliament's trade and industry committee that construction of the planned Coega port would cost about R2,4-billion, while the bill for the infrastructure of the industrial development zone would be in the region of R600-million. 

Members of the committee expressed concern over whether the project - which has yet to win a single industrial tenant - would create more sustainable jobs than other investment alternatives. 

Government is under pressure to justify the expenditure on another port on the Eastern Cape coastline, with concern being raised about the viability of the project. 

Silinga said the marine tender for the port construction would be issued in the fourth quarter of this year. Negotiations were also under way with parties interested in acquiring concessions to particular types of infrastructure, such as the bulk handling facility. 

'Not all facilities required would necessarily be funded by the fiscus,' Silinga said. 

He said that the Spoornet component of the zone development was estimated at R150-million and the road development, including the expansion of the N2, at R80-million. This would be funded by the National Roads Agency. Operation of the R800-million container terminal would be concessioned. 

Silinga's assistant, Tiya Kwezi, noted that to date control over 55% of the land needed for the industrial development zone had been acquired, although only 11% had so far been purchased. 

Negotiations were under way with 88 landowners, with the land acquisition programme due for finalisation by the middle of next year. However, the project could continue with the land already available. 

Silinga reiterated the arguments in favour of the construction of the deepwater port, stressing its strategic importance for SA. Port Elizabeth's and East London's harbours were shallow, requiring ships to wait out at sea for some time.

To deepen Port Elizabeth's port would cost R800-million. Also Port Elizabeth's back of port facilities were limited, which placed constraints on motor car exporters. 

Silinga dismissed suggestions that the project was economically unviable, saying studies had been conducted to prove it was. 

Sectors targeted for investment in the industrial development zone included automotive, metallurgical, textile and logistics industries. Kwezi said high environmental standards would be upheld, and this would act as a screen for potential investors.

Last modified on Thursday, 26 June 2014 09:54

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