More than 80% of the proposed 17E000ha of the Coega industrial development zone is in private hands
Peter Dickson
With six months to go before builders begin clearing the land for the proposed R1,6-billion deepwater port at Coega outside Port Elizabeth, one man’s mine stands in the way of the Eastern Cape’s much-vaunted “economic miracle”.
More than 80% of the envisaged 17E000ha Coega industrial development zone is in private hands and the project’s planners have only just begun the costly process of land acquisition. Construction is scheduled to begin before the end of November.
The Coega Development Corporation (CDC), the government agency driving the three- year project that includes three stainless steel factories and the port to be built by Portnet and “preferred private partner” the Anglo-Dutch P&O Nedlloyd/TCI consortium, says valuations have already been conducted for the 83 parcels of land involved and that the Eastern Cape government will foot the bill.
Of the land earmarked for Coega and which is bordered in the north by some of Outspan’s prime export orange farms around Addo, 37 plots are owned by private individuals, 22 by Transnet and 17 by existing businesses. One of these, which also include a long-established Cerebos salt farm, defiantly stood in the way this week.
Port Elizabeth estate agent John Price owns 192ha and last Wednesday, only days after the CDC announced its next step was to send formal post-valuation letters of offer to the affected land owners, placed an advertisement in the city’s Eastern Province Herald inviting comment on his plan to mine calcrete (calcite limestone) on his farm.
Price was not prepared to comment this week, but CDC communications manager Raymond Hartle said the agency, which was sending out the letters of offer from this week, would lodge objections. “We are negotiating with the owners for the land and Mr Price is aware of this,” he said. “Their rights are sacrosanct in a sense, but they cannot hold the upliftment of the people of this region to ransom.”
Denying mounting criticism that land acquisition has been left too late, Hartle said the state had to give the go-ahead for the project before land could be acquired as “it made no sense for us to have a vast land holding and no development prospect as an industrial zone” after initial investor British manganese ore giant Billiton pulled out last year in the wake of the Asian financial crisis. This event, Hartle says, had demanded a “radical change in strategy from industries requiring a port to becoming a catalyst for economic development.
“It has only been over the last year that the project has been in a position to go forward. It made no sense to acquire the land a year ago as we had no funding guarantee until it was confirmed earlier this year.”
Hartle says there is “ongoing contact” between the agency and the business and property owners and that “we are looking at various scenarios.
“We are a government agency and the state has the right to expropriate, but we have stated that we are negotiating on a willing buyer and willing seller and are making offers based on our own valuations.”
Hartle confirmed that R40-million had already been spent over the last five years, with not a single signature on any piece of paper to show for it, for a concept that has been on the drawing boards for 30 years. In Port Elizabeth, one of the more sceptical of South Africa’s cities, while estate agents predict a boom in the property market and booming values many doubt the ambitious project will ever get off the ground.
But Hartle says that Coega is “open for business” and that “the money seen as wasted is essential research and development that no company in its right mind would not do”.
Much of the R40-million spent so far, on the port’s design, needed to be “seen in context”, Hartle said.
The Council for Scientific and Industrial Research had built a scale model of the Coega port at Stellenbosch “as big as two rugby fields” and complete with a wave motion machine to explore wave pressures over a 100-year period.
Hartle added: “It is correct that we don’t have any contracts but we are quite comfortable with the fact that potential investors need to do their own feasibility studies – it’s a necessary process.
“The port is going ahead, with P&O Nedlloyd building the container part, and sooner rather than later. The time frames are very tight and the provincial government has budgeted for the land acquisition.”
The amount allocated by Bisho, which MEC for Economic Affairs Enoch Godongwana says will also contribute towards the CDC’s operating costs, has not yet been disclosed. Potential foreign investors who have indicated they will be undertaking feasibility studies in the Coega zone are Ferrostaal, Danielli and Thyssen.