Critics of the plan say it is a gamble and would remain a colossal white elephant, an argument that angers Alec Erwin 

Senior Political Correspondent 

IT's happening,' reads the imposing Coega Development Corporation (CDC) logo on a large billboard just outside the Port Elizabeth airport. 

Put up a year ago, its primary aim was to quell mounting suspicion over whether the government-initiated multibillion rand industrial development zone and deep-water port project would ever see the light of day. 

Five years of waiting has been a very long time in an area where almost 50% of the people are unemployed, while the project's champions kept selling it on the promise of 20000 permanent and 50000 construction jobs. 

'It was to the benefit of the project' that it was delayed, says Trade and Industry Minister Alec Erwin. On Tuesday Erwin, accompanied by Jeff Radebe, minister of public enterprises, descended on the 'friendly city' where he announced that his department was to disburse the first part of funding for actual construction work to begin almost immediately. 

Revised monetary figures from the CDC of 'investor deals soon to be finalised' are mindboggling. The metallurgical industry is to invest a total of R14,5bn directly, leading to a R6bn contribution to the country's gross domestic product, with R8,7bn in spin-off investments. The 20 000 jobs to be created would have a R3,5bn contribution to the annual household income, of which R805m would go to lower income groups. 

'No. Not so fast,' says one of the project's chief critics, Colm Allan, head of the Rhodes University-based public service accountability monitor project. 

'We've heard it all before.' 

While the politicians and the CDC might still be refusing to see the 'gamble' they are making, Allan says, the stakes are high for the vulnerable Port Elizabeth communities, for whom Coega would remain 'a colossal white elephant'. 

For the broader SA public which is being led to believe that the 'incredible risk' is an investment in the country's future, Allan says, very soon, the nation will see that the billions government intends spending on the project should have rather been spent on things like antiretroviral drugs to prevent mother-to-child transmission of HIV/AIDS. 

Government is pumping taxpayers' money into a project that has been delayed so many times, significantly because it is failing to attract private sector investment for no reason other than that it is simply not viable, Allan maintains. 

Views like Allan's infuriate Erwin, who finds it 'very difficult to follow the logic' of those opposing the development. Slating some reports that have been written as 'poorly prepared polemic' designed to support obvious opposition to the project, Erwin says the view that the Coega project will prove to be too expensive is 'merely an assertion'. 

In one response he has just sent to another critic, Prof Patrick Bond of Wits University's, graduate school of public and development management, Erwin argues that the project no longer depends on an anchor tenant. 

'In the final analysis,' Erwin says in the letter, impatient with what he sees to be a continual rehashing of some of the old and defeated arguments, 'it would be an abdication of responsibility and downright irresponsible for a government of an industrialising economy like ours not to develop these opportunities'. 

Erwin's department is engaged in negotiations with potential anchor investors in the Coega project, including global resources group BHP-Billiton, which wants to build a $1,7bn aluminium smelter. 

'We don't comment on commercial negotiations,' was the minister's response to whether the talks with BHP-Billiton have given the impetus to government's renewed confidence. 

The CDC's projections are that a stainless steel plant in Coega, even in its initial stages, would involve in excess of one million tons a year, which would be valuable core business for the project. 

Erwin points out that government has always said Coega would be the ideal location for manufacturers like BHP-Billiton, which are doing business by adding value to raw materials and components and producing goods bound for world markets. 

The Ngqurha port will boast container, general cargo and bulk terminals. Coega's industrial parks to be spread across the entire 12000ha of land would be customised for heavy, medium and light industries. There is promise of hi-tech communications infrastructure, as well as 'the world's cheapest electric power'. Coega's long-term plans include an international airport to handle high-value freight as well as passengers. 

In negotiations so far with potential investors, so much depended on the operator's permit the trade and industry department finally granted on Tuesday, says one of the CDC's deal fixers, business development executive Graham Price. 

'With the framework and permit now in our hands, we are able to move to closure on a number of investments', he says. 'It means we can now focus on the nuts and bolts. We can now have more detailed discussions with investors with regard to the cost of infrastructure and land, for example, as well as issues around incentives.' 

As Eastern Cape premier Makhenkesi Stofile put it: 'Like wine makers would say, the longer it ferments, the better it tastes. We are absolutely convinced that we have reached the maturity stage now.' 

But, as the saying goes: only time will tell.