Port Project Opportunity Revived

Namibia's Walvis Bay port expansion may up for grabs once again, in a move which would open up the country to new investment. The US$235mn expansion had been awarded to a Chinese contractor, to the upset of other bidders. However, a struggle to secure funding has forced the awarded to be cancelled, and the tender will now be reopened. The progression of the tender is crucial in opening up new port capacity in the Southern Africa region.

The engineering, procurement and construction (EPC) contract for the port was awarded to China Harbour and Engineering Company (CHEC) in August 2011 by Namibia Ports Authority (NamPort). Given CHEC was the only company pre-qualified out of 18 companies and joint ventures formed of local and international companies, the decision was a contentious one. NamPort claimed that CHEC was the only contractor that met the bidding criteria; however, after numerous complaints, the case was referred to Namibia's Anti-Corruption Commission, which cleared CHEC and NamPort of all wrongdoing.

These disgruntled companies may yet have another chance to bid for the project. The contract with CHEC was cancelled in late July 2012, reportedly as a result of difficulty in securing project funding. It is thought that the contract will be re-tendered if funding can be secured - a move that could be beneficial for companies that can come to the table with some degree of funding assistance. Indeed Japan announced earlier in July plans to help fund the port expansion through the Japan International Cooperation Agency (JICA), meaning that there could be a Japanese company involved in the project.

More Space Needed
Walvis Bay Port Data: Container Throughput, TEUs (LHS) And Cargo Handled, Tonnes (RHS)

The expansion plan involves constructing a new container port on reclaimed land at the southern end of the existing Walvis Bay port facility. The material for reclamation will be sourced from dredging projects also taking place at the port to create a depth of 16 metres, as well as a widening of the entrance channel, from 6km to 8.2km. Capacity at the port would increase from 260,000 TEUs to 500,000 TEUs.

It is hoped that improvements at the Port of Walvis Bay will enable Namibia to position itself as a regional transport hub, serving the landlocked countries of Southern Africa as well as providing surplus capacity for South African ports that are operating almost at capacity. The existing container terminal at Walvis Bay reached capacity earlier this year.

Botswana would be a key beneficiary of the port, especially if the Trans-Kalahari railway moves forward as anticipated. The railway, which stretches for 1,500 km railway, could connect Botswana's coal fields to the port of Walvis Bay; allowing Botswana a more direct, efficient and cheaper route to the coast. However, little progress has been made, with rumours that it had been abandoned in favour of a shorter route from Botswana to Mozambique, although this has been denied by officials. There is still no indication when the project will progress.

This article is tagged to:
Sector: Infrastructure, Shipping
Geography: Namibia, Botswana, Mozambique

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