AWARD OF CONTRACTS FOR THE DEVELOPMENT OF THE NGQURA PORT

Media Statement from Jeff Radebe, Minister of Public Enterprises

Cape Town, 7 August 2002

Cabinet today noted the award by Transnet of three major contracts, valued at almost R2,2 billion, for the development of the port of Ngqura in Algoa Bay near Port Elizabeth. The Ngqura Port will form the center piece of the Coega IDZ. The award of these contracts places the development of Coega on an irreversible path, bringing in its wake a major contribution to the economic development of the Eastern Cape. It also signifies government's commitment to increase its contribution to providing practical solutions to economic development through the infrastructure spend of the major state owned enterprises. The three contracts relate firstly to the development of marine infrastructure for the new port, including the provision of breakwaters and quays; secondly, sand bypass schemes to prevent beach erosion where the construction of the port has disturbed the natural movement of sand in the surf zone; and, thirdly, dredging to ensure adequate channel and harbour depth. We envisage a situation where Ngqura Port will receive the first ship in September 2004, some 516 years after Bartholomew Diaz became the first ship's captain to drop anchor in Algoa Bay in 1488 near St Croix Island, just off Coega's beach.

The award of these contracts is the responsibility of the Transnet Board of Directors, acting on the advice of the National Ports Authority. Government has noted that Transnet applied thorough evaluation criteria and that the Transnet Board is satisfied with the processes they have followed to reach the final contractors. Each tender was individually evaluated in terms of technical, commercial, financial and BEE components. The NPA engineering division performed the technical evaluation; the procurement division assessed the commercial and BEE elements; and Finance Division evaluated the financial aspects of the tenders. Thereafter, the NPA Tender Board produced its recommendations, which were then assessed by the Transnet Board Finance Committee and subsequently Transnet's Board of Directors.

The three contracts awarded can be summarized as follows:

1. A R1,4 billion contract for marine civil engineering has been awarded to Ngqura Harbour Contractors Joint Venture. The contract relates to the provision of breakwaters to protect the port from adverse sea conditions and to allow safe passage into and out of the port; the construction of quay walls; and related earthworks. The JV comprises German-based Hochtief Construction AG, Concor Holding (Pty) Ltd (South Africa), and Ngqura Empowerment Contractors. This latter group consists of 4 BEE companies, namely, Africa Construction (Pty) Ltd based in Johannesburg, and three Port Elizabeth based companies: Siyaya Civils and Building Contractors CC, Sakhisizwe Construction, and Matota Macingwane, Pambo Civil Engineering Contractors and Consultants CC.
2. A common feature of harbour and port construction is disturbance to currents and the natural movement of sand in the surf zone area, which, if not checked, can often lead to erosion or other environmentally unstable situations. Thus, the second contract is for sand bypass works in the harbour area valued at almost R100 million. This contract has been awarded to Connec Joint Venture, made up of Concor Holdings and Ngqura Empowerment Contractors.
3. The third contract relates to critical dredging of the entrance channel, the basins and the turning circle of the port. Jan de Nul NV, a Belgian firm, has won this contract that is valued at R480 million. The work will enable ships of up to 80 000 tonnes dead weight to enter the port safely, be moored and be able to turn around safely.

Transnet's awards also contain significant black economic empowerment contributions. A minimum of 30% BEE participation was required for the maritime civil works contract and the sand bypass contract, while the dredging companies were required to source fuel from BEE suppliers. BEE spending will amount to some R571 million. We expect about 900 jobs over three years to be created with the implementation of these three contracts.

The construction of the port of Ngqura represents the first major and significant maritime and civil engineering project in South Africa and indeed Africa for some time. It will be the largest single government sponsored infrastructure development in recent times. The announcement of these contract awards provides solid grounds of Government's commitment to the IDZ. It should therefore provide comfort and confidence to any outside investors interested in the Coega project. This development in the Eastern Cape will be integrated through the IDZ into a much wider geographic area of our country and beyond our borders. It will provide an important location on maritime maps as a new and exiting destination and embarkation point for major shipping lines. And of equal importance, the flashing signal markers on the point of the breakwaters will symbolize new energy, new life and greater opportunities to the people of the Eastern Cape as a whole.