239. In order to do a thorough analysis of the flow of funds through a fishing port at Mwe Bay, the following are amongst the questions that need to be addressed.

240. What sort of private processing industry could be attracted to Mwe Bay? Could existing processors absorb the cost of investing in new machinery in Mwe Bay? What are the operating costs of the fishing industry in Mwe Bay? What is the level of profitability of the fishing industry that could develop Mwe Bay? Can the industry absorb the costs of the Mwe Bay port?

241. Will the industry pay enough direct and indirect taxes, excluding quota levies, to service the port debt? If so, how much will be left to service the costs of land based infrastructure?

242. What equity contribution is the Government prepared to subscribe to the development of a fishing port in Mwe Bay? What is the expected return on capital? To what extent is the Government prepared to subsidise loan funds for a new port? Where would the subsidy come from? Can the Government establish a separate incentive scheme for the fishing industry?

243. What alternative revenue sources are available? Will the fishing companies operating on the land side of the Mwe Bay Port buy land from the port company (Namibia Ports Authority (NamPort)) to assist in reducing debt? What lease payments will be made?

244. How is the depreciation of the port building costs to be charged? These do not represent a cash flow drain but will affect the profit and loss of the NamPort-port management and operating companies.

245. To what extent will the industry be expected to cover the capital costs of the land based infrastructure?

246. How is the development of housing and social infrastructure to be treated? Is it seen as incremental to development expenditure elsewhere in the country or as replacing it?

247. What economic assumptions should be made about the Opportunity Cost and shadow-pricing of labour? Is it assumed that surplus agricultural labour will be attracted into the industry or will existing skilled, semi-skilled and unskilled labour be diverted to the fishing industry? What assumptions should be made about the Opportunity Cost of Capital?

248. These questions are not comprehensive and go beyond the limits of the Pre-Feasibility Study [21] and this Study.

249. The size of the Mwe Bay Project envisaged should involve more than a simple project cost benefit analysis in each case, The development of any of the port options with or without the development of Mwe Bay will have important repercussions on Government strategy for the fishing sector as a whole, including taxation, industrial incentive subsidies, the use of external resources, including foreign investment, policy preference for vessel types, the level of quota levies to be paid by foreign vessels and local vessels.

250. The size of the projects will have impacts beyond the sector. The fishing industry is a major export earner for the country. Foreign debt funding will place a drain on the current account of the balance of payments. Is this sustainable? The switching of large portions of the development budget to support one sector will limit the room for development expenditure in other sectors and regions. How does this fit in with the Government regional policy?

251. All these questions have to be further investigated and analysed by a comprehensive Feasibility Study for a Fishing Port at Mwe Bay which concentrates on the financial and economic as well as environmental viability of the Mwe Bay Fishing Port.



[21] Klein, W.A.; Moorsom, R.J.B.; edited by Dr.-Ing. Klaus Dierks: A Pre-Feasibility Study of Future Port Facilities in Namibia, Windhoek, 20 August 1993

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