Following the successful introduction of a deep-sea bunkering service off Port Elizabeth the Eastern Cape has set itself the target of being the leading bunkering stop-over in Africa, according to according to Mlibo Qoboshiyane, Eastern Cape MEC for rural development and agrarian reform.
He was speaking at the South African Maritime Industry Conference (SAMIC 2017) being hosted in Port Elizabeth.
“The province is targeting liquid fuels including bunkering services and biofuels; gas to power generation; development of commercial and industrial gas; and oil rigs service industry.
“Our vision as the province is to become the biggest bunkering service centre on the continent.
“We are pleased with the progress in the first offshore bunkering services that started in May 2016. It has proved beyond reasonable doubt that Nelson Mandela Bay is the most suitable location for offshore bunkering services,” he said.
There are also plans for a gas pipeline linking a new terminal in the port of Ngqura to Mossgas.
“The commitment by the national government to allocate 1000MW gas to power generation at Coega IDZ is warmly welcomed.
“The Department of Economic Development, Environmental Affairs and Tourism (DEDEAT) in partnership with Nelson Mandela University is in the advanced stages of baseline studies on the shale gas potential in the Karoo and other parts of the province.
“These initiatives place the Coega IDZ and Ngqura Port in a better position for Liquid Natural Gas (LNG) industry and gas to power generation,” he said.
In addition to the proposed pipeline from Ngqura to Mossgas the Department of Economic Affairs is “also exploring feeding East London Port with Liquid Natural Gas to supply industry around the Buffalo City Metro and the Wild Coast Special Economic Zone,” he said.
Mlibo Qoboshiyane says that the EC (Algoa Bay) is aiming to become the largest bunkering destination on the African Continent. At SAMIC2017 pic.twitter.com/mNURQv6S0M
— Gqeberha (@MyPE) April 6, 2017
Verbatim address by the Eastern Cape Rural Development & Agrarian Reform MEC, Mlibo Qoboshiyane during SAMIC2017:
On behalf of the Eastern Cape, Premier, Phumulo Masualle, the Executive Council and the people of our beautiful province, I would like to convey our warm greetings to all conference delegates.
This important conference could not have been organised at a better time and place than the Eastern Cape in this port city of Nelson Mandela Metro. This conference is also taking place during 100th anniversary of the late OR Tambo as well as the sinking of SS Mendi.
As we progress with our deliberations in this important conference we must be inspired by the illustrious leadership of OR Tambo and the immeasurable courage of the great African warriors and their chaplain, Rev Dyoba who perished in the English Channel.
In welcoming you to our province, I want to give update on the work we are doing as the provincial government together with national government and private sector to grow our economy by implementing oceans economy programmes linked to Operation Phakisa, which gives the Eastern Cape an opportunity to benefit from the economic potential of its 800km coastline.
Oceans economy is one of the six areas to stimulate the growth of our economy in the provincial Economic Development Strategy. In taking forward the vision of Operation Phakisa in the province, we set ourselves the following agenda:
On aquaculture, we are currently refurbishing the hatchery in Mthatha Dam as well as building capacity at Tsolo Agricultural Research and Development Institute to serve as an aquaculture incubator. Support will also be provided to the catfish pilot project in Graaf-Reinet. Through the small harbour and coastal development initiative led by National Public Works, our coastal municipalities have identified aquaculture and tourism projects as well as coastal property development.
In the oil and gas lab, the province is targeting liquid fuels including bunkering services and biofuels; gas to power generation; development of commercial and industrial gas; and oil rigs service industry.
Our vision as the province is to become the biggest bunkering service center in the continent. We are pleased with the progress in the first offshore bunkering services that started in May 2016. It has proved beyond reasonable doubt that Nelson Mandela Bay is the most suitable location for offshore bunkering services.
This is also beginning to open up other economic opportunities in the whole value chain. The Ngqurha Port is always hosting three oil rigs at every given moment thus confirming Ngqurha as the most strategic location for oil rigs repair. The commitment by the national government to allocate 1000MW gas to power generation at Coega IDZ is warmly welcome. The Department of Economic Development, Environmental Affairs and Tourism (DEDEAT) in partnership with Nelson Mandela University is in the advanced stages of baseline studies on the shale gas potential in the Karoo and other parts of the province. These initiatives place the Coega IDZ and Ngqurha Port in a better position for Liquid Natural Gas (LNG) industry and gas to power generation.
Maritime skills are a critical enabler in the oceans economy; hence the Department of Education is planning to expand the reach of the maritime high schools to other parts of the province in 2018 to add to the two existing schools.
The province has adopted a Provincial Maritime Skills Plan focused at Maritime education and training at basic and post schooling levels; skills development for employment and self-employment; as well as labour market intervention.
In the Five Trends Shaping the Global Maritime Industry identified by IHS it is noted, as the requirements for more technologically advanced systems increase, the global shipping industry faces a serious challenge of managing an aging workforce.
Seafarers all over the world are getting older because fewer cadets are being trained to replace the senior officers. To attract the next generation of maritime professionals, shipyards must become more technologically advanced and innovative, and seafaring must learn new skills and integrate new technology.
CURRENT STATUS OF OCEANS ECONOMY PROGRAMME
MARITME SKILLS: Progress has been made through various initiatives such as the pilot where learners will be placed with Tag Yachts in Cape St Francis, placement of 5 apprentices with Tide Marine in partnership with the MERSETA. We are pleased that more other partners have submitted proposals to place more learners in the maritime industry with the provincial government and these are being processed by the provincial government. About 26 out of 29 learners studying maritime at the Ngwenyathi Maritime High and George Randal high schools passed their studies last year.
Coega Development Cooperation has conducted a detailed labour forecast for the maritime economy potential within the Coega IDZ and the Nelson Mandela Bay Metropolitan municipality.
Transnet Ports Authorities in East London, Port Elizabeth and Ngqurha Ports approved plans to develop maritime training centers to develop specialized skills in each port. East London Port will start processes to open its academy during this month. SAMSA is currently developing a specialized maritime curriculum for the TVET colleges whilst NMMU has established Marine Engineering department.
Provincial strategic skills project coordinates artisan and engineering development partnerships. In collaboration with the MERSETA, the provincial government will also train 10 Tag Yachts employees on maritime related matters.
Coastal & Marine tourism: Coastal Municipalities need about R40 million to complete their detailed business plans aimed at developing the coastal towns to benefit from the oceans economy, except Ndlambe, which has completed its business plan.
Oil & Gas Exploration: SAMSA is currently conducting a study to assess the economic contribution and employment opportunities created by the offshore bunkering industry in the Nelson Mandela Bay Metropolitan, which will also map out industry value chain activities that provide potential or beneficiation by the local industry.
Economic Development, Tourism and Environmental Affairs has completed a detailed business case for the gas to power generation at Coega IDZ. Government’s expectations from this work expect floating system for liquid natural gas transfer, allocation of the 1000 MW plant, 35% local beneficiation from the R25 billion investments, gap for smaller industry players to be opened.
Talks about the pipeline from Coega to Mossgas are almost 80% in favour of the Eastern Cape. The pipeline will also open another platform for local beneficiation. Economic Affairs department is also exploring feeding East London Port with Liquid Natural Gas to supply industry around the Buffalo City Metro and the Wild Coast Special Economic Zone.
In pursuit of its plans, government will also identify areas where small and medium enterprises and black industrialists can fully participate in this programme. With regards to Oil Rigs repairs, the provincial government will conduct a business case study, which will include opportunity costs and cost benefit analysis to help the province sustain current Oil Rigs repair in Nqurha port, given its commercial potential. The gas power generation is said to have potential to contribute 8500 jobs during construction and 300 permanent jobs with more jobs coming in from downstream industries.
Aquaculture: Through operation Phakisa, the province identified five Aquaculture Development Zones (ADZ), which use seawater in Qholorha, ku Centane, East London IDZ, Hamburg, Coega IDZ, and Nelson Mandela Bay. At Qholorha, the project, which is at design stage, will require huge capital injection to put up seawater reservoir and bulk infrastructure.
Though two operators from EL IDZ, Oceanwise and Pure Ocean were liquidated owing to huge operational costs, seven out of eleven aquaculture sites have secured investors and the IDZ is progressing well in securing other investors. The DTI has since allocated R40 million-investment incentive to the EL IDZ for this sector to attract investors while the IDZ is working with the Scandinavian company, ACVA to design cost effective infrastructure to ensure sustainability.
With regards to the Coega IDZ site, where we have developed a business plan at the zone which will constitute 60% fresh water fish farming and 40% mariculture, we are looking for investors to help drive this aquaculture development zone. There are fish farms operated by few companies at the PE port.
Our department is reviving hatchery and fish farm at Mthatha dam and we will also use Tsolo Agriculture and Rural Development Institute for aquaculture training and incubation, develop cost effective and sustainable aquaculture systems in partnership with Lower Saxony based Gorttigen University.
With already secured market within the African continent, ECDC and IDC funded private sector partners, started catfish pilot in Graaf Reinet, giving jobs to about 116 young people. The provincial government has resolved that our department shall build technical capacity to coordinate aquaculture programme in the province and set aside funds for farmer support in this sector.
Maritime transport & Manufacturing: Our focus in this regard is to create supporting funding model, maintain, refurbish existing port facilities, unlock investment in port facilities, implement strategic projects at the East London port, ensure public procurement and localization programme and preferential procurement in the African Maritime charter.
To date, a 1200 ton and 40 ton slipway, have been refurbished by the Transnet National Ports Authority with the additional installation of a 90-ton hoist to support the fishing industry in the port of Port Elizabeth. Refurbishment of the graving dock has started at the East London Port and will be completed at the end of April 2017.
Boatbuilding investment: This is one of the strategic elements of the Oceans economy for the province. We have a responsibility to ensure that the people of the province, the unemployed, entrepreneurs in the sector, benefit from this programme through investments and skills development.
Our government is working towards obtaining funds for investments in this sector to help companies that are operating in this field with the funding challenges they face. We will need about R80 million to finance some of the strategic projects in the Port of Port Elizabeth to realize the growth targets set in the operation phakisa. ECDC approved R20 million to fund the contract secured by Tide Marine from Transnet to manufacture rough tugboat in the Port of Elizabeth and this is expected to create about 70 jobs.
About R8.7 million has been secured for the Mandela Bay Composite Cluster non profit entity to drive sector associated development such as marine manufacturing, composite innovation, skills development, value and supply chain development.
Given the fact that there is a lot of research output focusing on oil, gas, ship building and aquaculture by the province’s universities such as the Nelson Mandela Metropolitan, Rhodes and Walter Sisulu universities.
We will move to ensure closer working relations with these universities and other institutions of higher learning in the province to help us realize the targets we set for oceans economy.
Owing to the importance of the oceans economy in our growth trajectory, the provincial government, is considering setting up a fund to support oceans economy initiatives such as aquaculture that have potential to benefit local fishing communities along the coast. The 800km coastline of the province gives us an opportunity to use the marine resources to bring development to the communities along the coast. Together with land, our 800km coastline, are the two natural endowments that can help us to grow the economy of the province.
Any economic growth must be people centered. Investments, manufacturing, education, must be centered around human development and not just on profits and revenue streams for private companies involved. We engage on this programme as government because we want to see small businesses, communities along the coast partnering with the industry to reap the same rewards, to benefit from this natural endowment and the infrastructure development that will accompany it.
Oceans economy, automotive sector, light manufacturing, renewable energy, agro-processing and tourism are our strategic programmes to grow the provincial economy to create jobs for local youth, business opportunities for local firms, especially small and medium enterprises.
The report I presented above shows a provincial government that is working with the private sector, civil society, communities, schools and national government with their entities to attract funding and investment, for manufacturing, training, education, skills development, aquaculture, maritime transport, oil and gas to grow the provincial economy.
With these natural endowments, Eastern Cape can’t remain a labour reservoir. This meeting should come up with workable plans to partner with the Eastern Cape government to implement the programmes I tabled here. Only this province has 800 km coastline in the country and we have to use that to benefit the people of this province. Lets work together to reduce unemployment, eradicate poverty in the province through these programmes and to add R177 billion through this sector into our economy.
When we do this well, we can create the possible 1 million jobs, by increasing current 300 million tons of cargo with another good percentage to benefit all of us to maximize benefits. I wish you all the best in your deliberations. Thank you.
Alan Straton
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