Expansion of Saldanha port set to boost property market

Saldanha Bay Port infrastructure improvements

After years of talk, the port at Saldanha Bay is set finally to benefit from investment that will allow South Africa to participate and contribute more meaningfully in the oil and gas sector.

The Transnet National Ports Authority (TNPA) announced on 26 January 2015 infrastructure projects valued at R9.65bn at Saldanha Bay to improve its ability to serve the offshore oil and gas industry. The projects are seen as long-term and unlikely to be affected by the tapering-off in new oil exploration brought about by the recent dramatic drop in the oil price, which has put a question mark over some oil and gas projects.

Saldanha Bay port manager Willem Roux stressed the importance of the TNPA seizing the opportunity to serve the oil rigs operating on the west and east coasts of Africa of which about 120 oil rigs passed SA’s coastline annually. Most were unable to obtain services in Saldanha as the port was not equipped to meet the demands from the sector.

For the first time, the TNPA will invite private-sector participation in the projects, which will include the construction of a new rig repair quay, 380m long and 21m deep, to serve modern rigs, which require extra depth. The quay will be able to serve two rigs simultaneously.

The Mossgas quay will be lengthened from 38m to 500m, with a depth of 8.5m, to accommodate floating docks, which will enable the industry to build new service vessels to support the offshore oil and gas industry.

The cost price includes obtaining specialised equipment.

An offshore supply base will be built to serve as a one-stop shop to supply oil rigs with their basic needs, such as food and materials, and waste collection.

Mr Roux said the time frames for the projects had been expedited ahead of the TNPA’s own port development plans in order to align with those of Operation Phakisa, which President Jacob Zuma announced last year. The aim of the project is to clear infrastructure bottlenecks that constrain economic growth.

Mr Roux said the TNPA hoped to have a successful private-sector bidder for the projects — possibly on a build, own, operate and transfer basis — by September, and for the three projects to be commissioned by December 2017. The offshore supply base would be completed much sooner. The TNPA would be closely involved in the design, location and planning of the projects, and with the environmental impact assessments.

Effects on Saldanha, Jacobsbaai, Paternoster and Vredenburg property market

The projects will create an estimated 6,300 new direct jobs and 25,200 new indirect jobs, and contribute an estimated R4.74bn to gross domestic product which will. It will create not just overall economic growth in the area, but also many opportunities for investors in property as an influx of professionals and their teams who will be working on the new industrial and port developments will significantly boost the demand for accommodation in the area - adding pressure to an existing rental stock shortage.

The effect of such a big influx of buyers and tenants on the property market of the larger Saldanha Bay municipality, which also incorporates nearby Vredenburg and Jacobsbaai and are home to just under 100 000 people (Census 2011) will be significant.

Although the biggest rental demand is in the below R6000 p.m. bracket, the influx of professionals will also influence the higher rental brackets and should create a rental price hike. A rental price hike akin to the mining towns such as Kathu and Lydenburg due to acute shortages is however not foreseen - as the close proximity of luxury property in Langebaan (e.g. at Langebaan Country Club and Myburgh Park) should stifle such disproportional pricing.

Saldanha’s natural deep-water port  has already attracted significant industrial activity such as ArcelorMittal’s steel manufacturing plant, Sea Harvest, Namakwa Sands (Exxaro) and Durfeco. There are also three military bases in the area, and a number of smaller businesses and enterprises.

The lifestyle offerings of the area includes the Langebaan lagoon and the Saldanha beachfront with numerous water-sports activities. There are ample local sports facilities, restaurants, churches and social clubs to enjoy – with some of the best restaurants on the West Coast “just around the corner” in Paternoster. A growing Langebaan offering also add to the area’s attractions – including the Mykonos Hotel and Casino complex, the West Coast National Park, a variety of game lodges and the beautiful golf course at the Langebaan Country Club.

Source - BDlive