Harbour can be world’s port of call
THAT anyone would invade a hospital, trash the place with rubbish that could have included medical waste, interfere with the hospital’s staff trying to help the healing process, and endanger the lives of seriously ill patients, beggars belief.
Images of those atrocities at Charlotte Maxeke Hospital last week went viral, casting yet more doubt on whether South Africa is a good place for international business and investment when even a health sanctuary is not spared desecration.
Still trying to come to terms with such wanton vandalism, the continued contempt for human life, and the reluctance to deal swiftly and decisively with downright crooks in South Africa, I read a report on efforts by Hong Kong’s shipping community to “revamp and revive” the city’s maritime industry – and I saw a glimmer of hope for this corner of southern Africa, and for Cape Town in particular.
The future bustle of Hong Kong was brought into question prior to its return to Chinese rule in 1997. At the time, some shipping-related companies based in that city investigated alternative domains for their operations, fearing that the new dispensation would be too restrictive for them. Some Hong Kong operations did move, with Singapore as the destination for several companies wishing to remain within Asia. Others went to North America or returned to European bases.
However, since those concerns were largely unfounded – and its Chinese association allowed Hong Kong to blossom on the back of the Chinese shipping boom – a concerted effort by many has seen the port and its surrounds regain much ground, and it remains a major and massive global maritime centre.
Not convinced that the successful Hong Kong Ship Register – the fourth largest – should be the only focal point of maritime expansion, the Financial Services Development Council in the city believes the secret to growing the Hong Kong maritime cluster lies in attracting more shipping-related business to join those already based there.
Important to Hong Kong’s success in clawing back some of the momentum it lost to Singapore is the introduction of a more friendly tax regime for shipowners and for ancillary services such as shipping financing, shipbroking, marine insurance and ships’ agency operations. That way, reason Hong Kong’s protagonists, there will be snowball-like growth.
Like South Africa, more than 90% of Hong Kong’s trade is conducted by sea, and it is a major hub for other Asian ports, although obviously its cargo and shipping volumes, as well as its range of related activities, are far greater than anything experienced here. But can even small parallels be drawn between Hong Kong’s future – backed by the burgeoning maritime markets of nearby China, Korea and Japan – and a future South African shipping utopia?
Optimists point to the potential for significant growth in African seaborne trade. Promising figures show prospects of renewed growth in the offshore oil and gas industry off west and east Africa as oil and gas prices soar. Undoubtedly, as existing resources wane in other parts of the world, Africa could provide increased capacity for expansion of its mineral exports, more beneficiation and vehicle assembly plants, and Africa’s huge population should be a generator for the shipment of masses of grain imports. As Africa extends its transport base, further oil refining capacity will be essential.
To succeed in boosting the African shipping portfolio, specialised maritime functions – crucial to the steady growth of the industry – need to be located in a vibrant hub, for which South Africa, and Cape Town in particular, are ideally situated.
The local banking sector is said to be the best in Africa, communications are generally good, air links and airports are of a First World nature, while having similar time zones to much of western Europe is advantageous to the shipping world.
Well-developed, efficient and highly respected maritime legal structures exist in the country whose judiciary has a proven track record for independence. On the technical front, competent marine engineering and surveying services have shown themselves to be topflight.
Other important factors also signal that South Africa – and Cape Town with its special attributes – can compete favourably with European shipping domains such as Greece, Germany and even Norway.
Its agreeable climate and surrounds, its relatively low-cost living, its geographical location on the very busy and strategically important east-west shipping route, and its long maritime history give Cape Town the potential to become a natural shipping focal point through which South Africa can emulate – even partially – its Asian counterparts. Added to Cape Town’s own attributes as a maritime centre of note are the proximity of Saldanha Bay, the country’s most rapidly advancing harbour, and the vast potential of False Bay as a natural anchorage for bunkering and trans-shipment of cargoes.
Perhaps the time is ripe to campaign for third-party ship-managers to relocate their operations offices to Cape Town from more expensive places such as Piraeus, Isle of Man, Asian hubs, Bahamas and obscure archipelagos in the Caribbean and Pacific Ocean. In addition, if small jurisdictions can establish flags of convenience, why can’t South Africa – with its maritime infrastructure – do the same? And the local maritime industry sector would boom.
Even trying to gain recognition as a respected and sought after maritime centre will require much work from energetic, focused groups and people.
Vital back-up services for shipping in South Africa – bunkering, marine engineering industry, marine insurance and ship financing – need to be beefed up, while some land-side infrastructure, especially to the north of South Africa, leaves much room for improvement if the true hub-function of Cape Town is to be realised.
A friendly approach by the government to the expansion of shipping in South Africa should focus not only on tax relief, but also on a range of other aspects, including the easing of employment restrictions on foreign nationals with expertise that is essential to grow the shipping industry.
A few years ago, several foreign shipbrokers who were in the throes of training local people, were refused extensions to their work permits, causing the company to move to places with a more amenable dispensation along the Arabian Gulf. Others have shifted to Singapore.
But the maritime industry itself needs to undertake careful introspection. In former years, with many prominent companies playing such a major role in moving goods and people, the shipping industry enjoyed and exploited its status as a high-profile, glamorous and busy contributor to the global economy.
As employers, those companies were sought after among school-leavers and graduates. “Get a job in Union-Castle or a bank,” was the advice given to youngsters of my generation. However, the former prominent and glamorous standing of shipping has been usurped now by the airline and IT sectors.
In Hong Kong and elsewhere, including South Africa, the maritime industry has allowed security hawks to take control.
It now lies secreted behind fences and complex structural organisations that cloak its activities – and indeed its paramount role in the economy – from its greatest ally: the public from whose ranks will emerge its future investors, shareholders, clients, employees and leaders.
Returning to that report on Hong Kong, I noted a salient point : if all efforts to expand Hong Kong’s maritime sector are to succeed, it “will depend on another key characteristic of the city – its democratic political process”. To an even greater degree, growth in the South African maritime industry – and indeed, the success of all sectors, from the largest corporation to the spaza shop on the corner – will depend entirely on whether our ailing and currently toxic political seascape can shed those aspects that are abhorrent to prospective investors, and whether the authorities can resume proper and economically pragmatic governance.
I plead that Cape Town should go full ahead on a course to take its rightful place in the global shipping world.