DEVELOPMENT: West Coast A Priority For Cape
Recent Western Cape Business News
The West Coast could see major development of its public transport system and oil and gas industries, it was revealed at the quarterly members meeting of business-led think tank Accelerate Cape Town.
Accelerate Cape Town chief executive Guy Lundy said the West Coast economic corridor, including Atlantis and Saldanha, was an area that was likely to see big development over the next few years.
Lundy said it was important to see the area stretching from Cape Town to Saldanha and up to Worcester, and not only the Cape Town CBD, as the main economic zone in the province.
Three speakers gave presentations on future development of the West Coast. Kylie Hatton, media manager for the City of Cape Town, shared information about the City’s new Bus Rapid Transport (BRT) System route to connect the West Coast to Cape Town. South African Oil and Gas Alliance (Saoga) executive director Warwick Blyth spoke in his personal capacity about opportunities in upstream activities (exploration, drilling, production and support services) in the oil and gas sectors on the West Coast. Economist Jacyntha Maclennan, senior manager of Wesgro IQ, the Western Cape Investment and Trade Promotion Agency’s economic intelligence unit, spoke about trade and investment opportunities in the West Coast and the feasibility study she was overseeing for provincial government into setting up an Industrial Development Zone (IDZ), the South African version of a free zone, on the West Coast.
Hatton said the City had strategically chosen to develop the West Coast bus route before addressing the need for a similar service in more populated areas such as Mitchells Plain and Khayelitsha. The reason for this was that the dynamics of the West Coast route and consultations with taxi groups and other affected parties on the route were far less complex than would have been the case on a major public transport route. The City therefore had an opportunity to iron out any difficulties in its ambitious new public transport network before rolling it out on a large scale. The West Coast area was also not serviced by any form of commuter rail network.
Hatton said the West Coast route would be developed over the next 20 years and the first phase was scheduled to be launched in early May.
Hatton said the City of Cape Town had chosen the BRT system over building a new rail network, because it had the reliability of a rail system, but it had existing infrastructure and was flexible and cost efficient. For the same amount of money (R7 billion) the City could build seven kilometres of underground rail, 14km of elevated rail, 40km of light rail or 175km of BRT.
Blyth said the offshore area from Saldanha up to the Orange River Basin was an important area for oil and gas exploration and showed great potential for development. An even larger opportunity for the West Coast is the provision of support, services and equipment to the oil and gas exploration and production activities in the sub-Saharan region. Unlike oil and gas operations themselves the supply industries serving these projects could be very labour intensive; the ship and rig-repair business in particular had great potential to expand and create many jobs. Cape Town was also an attractive place for international companies in the oil and gas services industry to set up regional head offices.
Saldanha Bay, because of its available land, deep water port and established engineering community, had the potential to develop significantly as a hub for regional oil and gas activity, much like the Australian Marine Complex near Perth has for their oil and gas activities.
Blyth said the recent finalisation of licenses for the West Coast blocks means that exploration and development activities are likely to pick up over the next 18 months with Forest Oil’s Ibhubesi project potentially leading with a large offshore development, pipeline to shore and a gas plant and power station near Hondeklipbaai.
Especially harbour maintenance and ship and rig repair were labour-intensive and could create many jobs. Over the next few years Saldanha could overtake Cape Town as the maritime maintenance and repair hub of the Western Cape, Blyth said.
Saldanha had the potential to develop significantly, much like the Australian Marine Complex near Perth, as it had a lot of available land, it was a natural deep water port, it had an established engineering community, the quayside was fairly well developed and it already had a small airstrip.
Maclennan said the West Coast was the fourth fastest growing region in the Western Cape, after Cape Town, the Cape Winelands and Eden. It needed to leverage its economic growth off the growth of Cape Town.
Maclennan said the West Coast economy was mainly driven by the manufacturing sector, while Cape Town was stronger in services. During the recession, the Western Cape economy was buoyed by the strong services sector, which meant that the economy kept on growing despite the decline in growth in other areas of the economy. The development of industry and the port in Saldanha Bay could strengthen the manufacturing sector and consequently the services sector on the West Coast.
Maclennan said if the West Coast was to grow economically, it would need direct foreign investment (FDI). Over the past seven years the region received only two FDI projects. The Western Cape government was now exploring setting up an IDZ to meet the challenges of globalisation, attract FDI, provide infrastructure, overcome administrative hurdles and develop linkages between local and international companies.
Wesgro IQ is tasked with researching the viability of an IDZ. As Saldanha was an environmentally sensitive area, various environmental implications were also being taken into consideration. “The feasibility study should be finished by the end of the year,” Maclennan said.
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