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Durban’s environmental groups and business community rarely agree, but
on the matter of the huge new industrial complex at Coega, 25 km north
of Port Elizabeth, there is unanimity: stop the waste.
The financial waste became a matter of national concern last week when
the Canadian firm Alcan agreed to a quarter-century Eskom power supply
agreement at what is assumed to be an extremely generous price (even
better than BHP Billiton gets at Richards Bay).
Alcan, whose main negotiator Cynthia Carroll was recently named CEO-
designate at Anglo American, will lead construction of a R20 billion
aluminium smelter. By 2014, Coega could be producing 720 000 tons of the
metal in one of the world’s biggest smelters.
But Coega is potentially South Africa’s most expensive white elephant,
competing with unsustainable projects like the Gautrain, Pebble Bed
Nuclear Reactors and the Lesotho Highlands Water Project.
Coega includes proposals for a new port, container terminal and
Industrial Development Zone (IDZ), utilising vast public subsidies and
quantities of land, water, and electricity.
The case against Coega is varied. The new employment anticipated at the port/IDZ would be the most expensive in terms of capital per job, of any major facility in Africa. Environmentally, the costs of the Coega projects in water consumption, air pollution, electricity usage and marine impacts are potentially immense. The scale of the pro-corporate infrastructure to be constructed by the state from scratch is unprecedented in Africa. It dwarfs the basic-needs development infrastructure required by deprived citizens of Mandela Metropole and across the Eastern Cape.
On a political level public law and participation processes associated with
the port and IDZ development have been unsatisfactory. Reports of conflicts of interest for key decision-makers cloud the project’s governance. Socially, there are significant costs as well, in the displacement of the existing residents and the future economic and
environmental burdens on low-income people in the area.
Most importantly, there are far better prospects for employment
creation and socio-economic progress in an alternative economic
development scenario proposed by community and environmental activists
six years ago. The alternative strategy prioritises basic-needs
infrastructure investment throughout the Eastern Cape and, at Coega, the
development of eco-tourism and small-scale agriculture and mariculture.
In all these respects, the Coega port and IDZ exacerbate the apartheid
economic legacy of division, marginalisation, and grandiose, unworkable
public-investment schemes. Such ventures were traditionally grounded not
in a logic of development, but instead reflected the power of special
interest groups.
For example, only 1000 permanent smelter jobs are going to be created,
in spite of the more than R10 billion of SA state funding used to
support the project. This includes R7.5 billion in general roads, ports,
water and power investments – making Coega ‘the single biggest
infrastructure project in SA history’ – and a R1,93 billion tax
incentive approved by the South African Revenue Service.
Eskom’s new deal is most worrying, given persistent shortage across South Africa. Using roughly 1100 MegaWatts, about 3% of the country’s total, Coega will present an enormous new drain on scarce electricity. Extremely expensive new transmission lines must be built from Eskom’s coal-fired generators in Mpumalanga.
With South Africa’s carbon dioxide emissions running approximately
20 times higher than even the United States on a per capita income
basis, Coega is an ecologically irresponsible project.
Ironically, environment minister Martinus van Schalkwyk returned
triumphant from Kyoto Protocol renegotiations on climate change in
Nairobi last month, claiming that ‘SA achieved most of its key
objectives’. Those included promoting ‘Clean Development Mechanisms’
such as the Durban’s Bisasar Road landfill, which has been delayed as a
World Bank project because of strong civil society objections.
But by bringing the vast ‘ghost on the Coast’ (the long-empty Coega’s
nickname) to life through the new subsidies, the national government
will substantially increase emissions. This, said van Schalkvyk, ‘sends
a clear signal to carbon markets of our common resolve to secure the
future of the Kyoto regime.’ What Coega also sends is a signal that SA –
not presently liable under Kyoto to reduce emissions – will be as
irresponsible as it can be until climate change regulation is finally
imposed.
Durban businesses have opposed Coega especially because of port and
container terminal competition. NGOs such as GroundWork and Earthlife
are furious about SA industrial policy as exemplified by Coega. But the
problem for advocates of a different energy, economic and environmental
future, remains local loyalties in the Eastern Cape.
In Mandela Metropole, we can predict upcoming resistance to Coega’s
guzzling of water and power. Back in 1998, the assistant city engineer
for hydraulics wrote a blunt memo about the prospect of a redistributive
tariff to help poor consumers: ‘If a rising block water tariff were to
implemented for industry, Coega would not go ahead’.
In other words, the perceived need to pump cheap water and electricity
into Coega industries will sabotage government’s stated objectives of
social justice, public health, and economic growth from being achieved.
Civil society resistance to this sort of maldistribution is already quite advanced, but often takes the form of illegal reconnections after prolific disconnections by municipalities and Eskom. What is needed is a more sustained campaign for radically new industrial policies as well as tough state regulation of emissions. We also urgently need grassroots carbon reduction initiatives.
The case of Coega is now increasingly standing out as a beacon of irresponsibility and corporate welfare.
(Patrick Bond is director of the UKZN Centre for Civil Society.)
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