One port good, two ports better

(column originally written for Grocott’s Mail)

Residents of the Eastern Cape cannot have missed in national newspapers the full-colour Transnet ads singing the praises of the port at Nqura, or Coega, as it is better known.

“If operations in one port keep the economy moving, imagine the momentum created by two,” states the headline.

The body of the ad boasts about the “world-class infrastructure and state-of -the-art equipment” of the Ngqura Container Terminal at the port and that the terminal and the nearby PE terminal complement each other.

It concludes: “The addition of the Ngqura Container Terminal represents the dawn of a new era that will literally put South Africa on the map.”

Apart from the misuse of the word “literally,” a common mistake and one that will irk the academic community in Grahamstown, the ad raises a number of questions for me.

One is: Why is Transnet using its money to tell us, the readers of newspapers, about this development? Infrastructure is something you advertise in the context of trying to lure foreign investment, which means that such advertising should be directed to foreign news media. I’m sure domestic newspapers are glad of the revenue, however, and would like to see an ad in Grocott’s next time. But what is the ad expected to achieve, other than to persuade us that more investment in Coega is a good thing?

Coega has attracted quite a lot of critical Press as a politically motivated white elephant over the years. It has a long history of announcing projects that did not come to fruition, the most famous being the long-mooted aluminium smelter, which was to be the keystone investment, validating the construction of the deep water port. The idea was that, as with the Richards Bay Hillside smelter and the Mozal smelter in Mozambique, the aluminium ore would be shipped in using large vessels that need deep water because they are heavy; the smelter would use cheap electricity to convert the ore or bauxite to aluminium, which would then be shipped out again. That never happened, and the Coega Development Corporation has been searching for other tenants that would justify the investment.

So my second question is what happened to the post-Polokwane revolutionary fervour of the SACP which lambasted what were described as the costly vanity mega-projects of the Mbeki era? The Pebble Bed Modular Reactor is history, but Coega is still with us. I suppose the answer to this is that the money is spent. In business terms it is a sunk cost. We can’t sell it to get the money back, so we had better make the best of it. In the hope of getting the aluminium smelter the necessary electricity was already secured, so it is might as well be used for the R4,2-billion Kalagadi manganese smelter, which now becomes the flagship tenant at the port.

My third question is whether having two ports is necessarily better than one. If the work at one port is simply diverted from another port, I don’t see the benefit. From an economic point of view, it would depend on the costs versus the benefits. Again, Ngqura is there, so we might as well use it for exporting ore and metals, which would require a deep water port.

The other big project is the huge Project Mathombo petrol refinery, which itself has already attracted the white elephant tag, and whose cost is unknown at this stage.

This too will mean huge tankers coming in to port to offload oil.

More encouraging than the big projects is the news that a Chinese car and truck maker, FAW, is to set up a R600-million manufacturing operation at the Coega Industrial Development Zone, which is separate from the port. The plant could equally have been built in PE or East London, I suppose, but is good news nonetheless.

In trying to measure the benefits of the Coega investment in foreign direct investment I have been consistently disappointed over the years. I just don’t know why the port does not attract investors.

In reading up about the proposed manganese smelter, however, something else other than misapplication of money has begun to concern me. Manganese smelting has frightening environmental dangers, causing manganese madness and symptoms that resemble Parkinson’s Disease. The US National Institute of Environmental Health Sciences (NIEHS) reports on its website that “miners and steel workers exposed to high levels of manganese in occupational settings developed problems with balance, movement, and fine motor coordination characteristic of Parkinson’s Disease, and were at much greater risk of developing Parkinson’s Disease itself.”

The smelter and the prospect of a polluting fuel refinery, makes me so glad I live in Grahamstown where the only have to worry about is the heavy metals in the water.