Port Expands Gateway Ambitions
Already highlighted by BMI 's Shipping team as a logistics outperformer , Namibia's planned expansion of the Walvis Bay port is set to further increase [its advantages in terms of infrastructure] over its peers. Adding an additional 650,000 twenty-foot equivalent units ( TEU ) capacity to the existing 350,000 TEU in the form of a new container terminal will position the port as one of the flagship entry points to the southern African region by 2020 . Already factored into our forecasts, the project supports our robust growth picture for the Namibian construction sector, which is set to experience 15.8% y-o-y real growth in 2013 and average 10.4% up to 2017, by which point the port should be operational.
The plans to expand the port have been in the pipeline for some time, but have been delayed since the initial contract awarded to China Harbour and Engineering Company was cancelled in July 2012. The Namibian Port Authority (Namport) ha s now announced that the selection of the winner of the retendered contract will be made in August 2013 after seven companies placed bid s for the project; Sinohydro , China Harbour Engineering Company, Gezhouba Group , Brazil's Constructora AOS, an RMB-led consortium comprising Namibian and South African financial institutions, Belgium's Dredging International and Consolidated Contractors Company's CCC-STFA-JDN consortium from Greece and STFA Group in Turkey.
Financing for the project is believe d to be on the verge of being secured , according to Namport executive Christian Faure . With the port having the potential to access markets of around 300mn peopl e, we believe that the port should successfully attract the financing its needs as it will be a gateway to some lucrative growth markets. With container throughput at Walvis Bay increasing by 482% between 2002/03 to 2010/11, from 37,185 TEUs to 220,178 TEUs, expansion of the port is prudent.
|Namibia's Ports Are Key For The Region|
|Quality of Port Infrastructure Scores|
Over the long-term, we expect that the development of the Walvis Bay port will lead to a multitude of other construction opportunities in the local region. As a key export route for land - locked and mineral - exporting countries such as Zambia, the Democratic Republic of the Congo (DRC) and Botswana , connecting infrastructure is going to be in demand. Indeed, the Walvis Bay Corridor Group was established to facilitate the use of the Walvis Bay port by developing road connections , in particular the Trans-Kalahari and the Trans-Caprivi highways . Already, the Walvis Bay corridors have recorded a substantial increase in volumes, with the Trans-Kalahari route reporting 92% growth in volumes. The Trans-Caprivi registered 82% growth. The construction of the Trans-Kalahari railway offers one example of the opportunities that the port has and should continue to create.
Additionally, commercial construction should also see an uptick as the port comes online. Already, local authorities are planning developments that will transform the coastal town into an industrial hub. Chief amongst them is the Walvis Bay International Logistics Park (WILP), which is expected to begin construction in 2014.
The main risks to the se development s stem from the potential for the demand projections on which the expansion of the port was premised to be lower than anticipated . We have noted a number of mining companies leaving projects in Africa following a slide in commodity p rices and high costs , and as a key export terminal for a number of mineral producing countries, Walvis Bay is vulnerable to this trend . That said, BMI 's A utos team believe s Namibia to be a choice destination for car imports into Africa , which look set to take up any slack . The import and regional distribution of vehicles, including second-hand ones, saw imports of vehicles double in 2012, to a value of NAD150mn. BMI believes there is further growth potential in this trade, given congestion and security concerns at other ports in the Southern Africa Development Community.