252. Existing commercial port facilities will suffice throughout the planning period for the slow and expected growth demand scenarios as well as much of the rapid growth scenario in respect of full cargo categories except large-scale bulk mineral exports. There is little prospect for a second commercial port both operating on a competitive basis with Walvis Bay and repaying its capital costs. Accordingly, no financial assessment for alternative commercial port facilities is required.

253. Only Port Option 2 (Strategical Context 1) will have to be investigated in more detail by a Comprehensive Feasibility Study: Port Option 2A (Möwe Bay Fishing Port built): Major Marine Engineering Projects: Lüderitz Fishing Port Extension L1, Walvis Bay Commercial Port Expansion WB1 and Walvis Bay Fishing Port Expansion WB1-A or Walvis Bay Fishing Port Northern Extension WB1-C and New Möwe Bay Fishing Port MB1 - or - Port Option 2B (Möwe Bay Fishing Port not built): Major Marine Engineering Projects: Lüderitz Fishing Port Extension L1, Walvis Bay Commercial Port Expansion WB1 and Walvis Bay Fishing Port Expansion WB1-B or Walvis Bay Fishing Port Northern Extension WB1-D.

254. Bulk mineral exports will face serious environmental difficulties long before the theoretical port capacity at the Port of Walvis Bay is fully utilised if transported through the Town of Walvis Bay and stored on the NamPort-port land. The project-based economics of large-scale mining projects in any case generally favour dedicated loading terminals to the project promoter's design.

255. Under the port charging system currently in force it will be difficult for any port depending primarily on income from fishing vessels to return an operating surplus, let alone cover depreciation and repay the capital costs of new investment. In such circumstances, no fishing port investment could turn out viable, however intense the demand for port facilities. Public policy on the financial regime applicable to the use of fishing ports should be subjected to a comprehensive review.

256. The financing of a medium to large fishing port at Möwe Bay entirely by the public sector would require the commitment of the entire flow of quota and research levy income attributable to future fish landings at the port for the lifetime of the investment in the fixed assets. Even then, the IRR would be modest at 8 - 9%.

257. On the other hand, the financial and economic viability of funding of such a port through a reasonable mix of private and public sector finance should be investigated by a Comprehensive Feasibility Study.

258. The financing of expansion at Walvis Bay, whether within the existing fishing port or through a northern extension, would require the commitment of no more than 7 - 10% of the attributable levy income, on which basis IRRs of 17 - 25% can be assured. At this share of fisheries tax revenue, investment in such facilities is viable.

259. The financing of a fishing port extension at Lüderitz would require the commitment of 15% of attributable levy income, which would give an IRR of 17%. On this basis, investment in such facilities is viable.

260. While expansions at Walvis Bay and Lüderitz can benefit from established infrastructures, a new fishing port at Möwe Bay would have to be built from scratch. Building costs at Möwe Bay are likely to be particularly expensive given the remoteness of the site. In addition, high-cost supporting infrastructure (coastal road, water scheme, trunk power line, telecommunications) would have to be provided at the outset of the project. The net costs are far in excess of equivalent developments at Walvis Bay.

261. If the Möwe Bay Port Option MB1 would be considered, shadow-priced arguments like development reasons like the exploitation of the northern fishing grounds, value-adding by shore-processing, creation of employment possibilities and regional decentralisation have to be evaluated in depth.

262. The decisions to be taken in choosing a port option will have far-reaching effects and should be co-ordinated across the Government and should be made only on the basis of a rigorous and detailed analysis. It is particularly important that the following ministries engage on a joint basis in planning, evaluation of options and monitoring of progress:

- Ministry of Works, Transport and Communication (civil engineering);

- Ministry of Fisheries and Marine Resources;

- Ministry of Finance;

- Ministry of Trade and Industry;

- Ministry of Regional and Local Government and Housing;

- Ministry of Mines and Energy;

- Ministry of Agriculture, Water Affairs and Rural Development;

- Ministry of Environment and Tourism;

- National Planning Commission.

263. This Study based on the Pre-Feasibility Study indicates that the financial and economic issues around the viability of the development of any port option, but in particular affecting the development of a new Fishing Port at Möwe Bay are the crucial questions which have to be addressed in the first instance in any future comprehensive Feasibility Study. Engineering issues are considered to be secondary as they are derivations of demand and activity at any development scenario.

264. This Study proved the marginal economic viability of developing a Fishing Port at Möwe Bay and therefore it is recommended that a full, comprehensive, detailed and rigorous Feasibility Study should consider the numerous complex issues related to such a development.

265. Terms of Reference for such a comprehensive Feasibility Study can be found in: Klein, W.A.; Moorsom, R.J.B.; edited by Dr.-Ing. Klaus Dierks: A Pre-Feasibility Study of Future Port Facilities in Namibia, Windhoek, 30 November 1992, Section 14, p. 258 ff.

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