Cape Town Harbor Ship Repair Companies Losing Money

The infrastructure and maintenance backlog at Cape Town Harbor, South Africa, due to basic wear and tear, four-decade-old cranes, and the need for all-around upgrades, is estimated to be costing ship repair companies at the harbor R700 million (USD 97.6 million) in lost business a year. The lost business includes ship repairs (at least two ships a week are sent elsewhere) and general servicing of the gas and oil industry in West Africa. A R3.2-billion (USD 446-million) plan to upgrade, expand, and repair the harbor’s facility has been in the works for some time, but final governmental approval of the project has been delayed awaiting the results of an environmental impact assessment.

An official statement on the Republic of South Africa’s Department of Public Enterprises’ Web site summarizes the sentiments of the chief executive of the National Ports Authority (NPA), the landlord of Cape Town Harbor, on the delay: “But authority CEO Kgomotso Philele said the long delay in getting the environmental green light was having severe implications for Cape Town harbour. Its container terminal was operating at about 110%-115% capacity and the expansion was ‘absolutely critical,’ Philele said. He said the delay was limiting the harbour's growth as a transshipment hub. It had also pushed up costs for the project from the initial R2,6bn [USD 362.4 million] to about R3,2bn [USD 446 million]. The danger was that ship owners would just bypass Cape Town to avoid the delays, Philele said.”

Public Enterprises Minister Alec Erwin shares Philele’s opinions on the prolonged environmental studies. According to the Department of Public Enterprises’ statement, Erwin “emphasised in briefing Parliament's portfolio committee on public enterprises earlier this week that the time-consuming process of environmental impact assessments was ‘problematic.’ He said they ‘were holding up some of our investments.’”

While many, most notably ship repair companies, appear to agree with Philele and Erwin, Environment and Tourism Minister Marthinus van Schalkwyk believes more time in necessary to fully investigate all the environmental implications of the expansion plan. In fact, he recently revoked his initial authorization of the plan after disparaging an environmental impact report commissioned by the NPA as “flawed” and “irresponsible.”

As stated on the Department of Public Enterprises’ Web site, the minister “criticised the Council for Scientific and Industrial Research - commissioned by the authority to undertake an environmental assessment - for its report, which he said failed to deal with all aspects and reflected ‘a serious breach of responsibility.’ Its report lacked critical information and was technically limited, the minister said.” The minister said that “more information to meet the objections to the proposed expansion” was needed. He said that he would provide his decision within two months of received that supplementary data.

At the moment it seems ship repair companies will just have to continue to wait for the needed repairs, upgrades, and expansion -- and lose money in the process. The entire Department of Public Enterprise’s statement can be read at http://www.dpe.gov.za/home.asp?id=391.