AN INDEPENDENT feasibility study has found that the proposed deep-water container terminal at the port of Ngqura outside Port Elizabeth would be viable even if there was no investment in the neighbouring Coega Industrial Development Zone. The study, by Grahamstown-based Coastal and Environmental Services, states that in terms of a cost/benefit analysis, the Ngqura port is “economically weakly sustainable” without an industrial development zone (IDZ). “If the IDZ is successful, the port will be an economically sustainable project,” says the report. Coega Development Corporation (CDC) communications manager Raymond Hartle says the R800-million container terminal will probably be funded and run by the CDC’s technology partner, P&O Nedlloyd. Benefits of building the Ngqura port will be felt throughout the South African economy, according to the draft strategic assessment report. It says savings to the economy include the lower costs of developing Coega compared to elsewhere in the country and savings on sea and land transport. Ship owners operating out of Europe and the Americas will benefit by being able to turn around in Algoa Bay, which is nearly two days’ sailing closer than Durban. “The results of the analysis show that the construction of the basic port infrastructure to provide a harbour at Coega and the development of a container terminal are economically justifiable as an alternative to the development of a container terminal at Richards Bay,” says the report, which has been published for comment. These savings will total between R12-billion and R19-billion over the next 20 years. The first phase of the port development is budgeted at R1,5-billion. According to the report, South Africa needs a new container harbour. The report warns that, without any investment in new container handling facilities, South African ports will run out of capacity to handle container traffic within the next six to seven years. Physical constraints within the existing harbours make expansion uneconomical, according to a specialist report by Maritime Education Research & Information Technology (Merit). While a container terminal is both needed and economically sustainable, the report emphasises the need for the development of the adjacent Coega IDZ. A key benefit to the local economy will be the expansion of the skills base, particularly during he initial three-year construction phase. While the R1,3-billion expansion to the Durban harbour means South Africa is not likely to experience capacity problems until 2007, the report recommends that construction on Ngqura should start within the next two years. Further expansion of Durban, it says, is less cost-effective than the Coega option.