Presently, the Eastern Cape Province has world-class seaport infrastructure but is inefficiently connected by air. The Mandela Bay Aerotropolis and Logistics Gateway Development master plan incorporates “aerotropolis” and logistics gateway concepts, while providing an intercontinental air capability.
The project aims to incorporate the following:
- Airport redevelopment
- Intercontinental runway construction
- Industrial/logistics development zone
- Smart village and incubator connected to the 2Africa undersea cable
- Intelligent electrical microgrid with islanding capability
- Agrivoltaics venture – for export
Overview
The proposed development is to be located on a 450 ha land area adjoining the existing regional airport. The initiative incorporates a new 3,300 m runway as part of a multifunctional solution, utilizing a new model.
The plan incorporates a number of synergistic ventures enabling the involvement of diverse private and public sector stakeholders. This will meet both financial and economic development objectives.
Elements of the overall plan include:
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- the airside infrastructure (runways-taxiways and navaids)
- the passenger terminal (including customs and immigration functions)
- attached and remote aircraft hardstands handling widebody and narrowbody aircraft
- an industrial-logistics development zone
- an aircargo facility with attached hardstands
- a smart village and incubator development
- a hybrid electrical microgrid
- an agrivoltaics venture
- associated ventures outside the land area
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The initiative enables a phased implementation, minimizing capital costs while meeting market needs.
The project builds on existing business while attracting new enterprises with an international focus. This is to be achieved using a new model for the creation of strategic infrastructure while meeting financial goals.
This project, initiated by the private sector, has the public sector as a lead stakeholder. This includes: the MBDA (Mandela Bay Development Agency – the Nelson Mandela Bay Metro, DTI (Department of Trade and Industry) and ECDC (Eastern Cape Development Corporation).
The development model enables the implementation of a project of value with the participation of the private and public sectors.
Project description
An international consultant (Franco Eleuteri and Associates) based in Dallas, Texas, initially defined the project concept and development strategy utilizing master development, sea-air-inland port, special economic zone, and industrial-logistics expertise.
This utilizes a new model as a multi-functional solution located on a 450 ha site adjoining the existing airport in Nelson Mandela Bay, South Africa. The site, which belongs to the Nelson Mandela Bay Metro, accommodates the master plan which includes a 3,300 m runway.
Nelson Mandela Bay is the largest metropolitan area in the Eastern Cape, with a population of approximately 1.3-million. The province is one of the four largest contributors to the South African GDP, with trade, catering, accommodation (tourism) and manufacturing being the largest contributors. The metropolitan area is served by:
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- Ngqura, as a deepwater port with e capacity of 2-million TEU’s per annum
- Port Elizabeth harbour, with a capacity of 400,000 TEU’s per annum including bulk ore and vehicular RoRo capabilities
The region is further directly connected by rail to Gauteng, the largest commercial market in Africa.
The province does not, however, have an airport with intercontinental reach, while Chief Dawid Stuurman International Airport is the third largest mover of airfreight, following Johannesburg and Cape Town. This travels by dedicated narrowbody freighter to CT and JIA (Cape Town and Johannesburg) in addition to using RFS (Road Freight Service).
Site characteristics
The development is to be located on a site to the southeast of the existing regional airport. This location has previously been reserved as a site for the future development of the airport.
The masterplan is anchored by a new 3,300 m runway, with a 1,300 m separation with the existing narrowbody 2,000 m operation. This separation enables the creation of an internal industrial/logistics zone and a passenger terminal between the two runways.
The site, which is uninhabited/unused, has no significant gradients affecting runway construction. It is further in close proximity to the developed beachfront, the undeveloped coastal areas, and Nelson Mandela University. The 2Africa intercontinental undersea cable is close to the site.
This is in addition to its proximity to the existing infrastructure (roads, sewerage, water, electricity). The development plan further incorporates utility community networks, including a hybrid electrical microgrid, with an islanding capability.
The suitability of the location is further motivated by the future flight paths being located over uninhabited areas. This includes a large adjoining cemetery and a designated green area to the northeast, while the adjoining area to the southwest has no urban development.
Individual opportunities
The Mandela Bay Aerotropolis and Logistics Gateway is a planned master development, which incorporates a number of parts:
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- the aeronautical infrastructure providing intercontinental air connectivity
- the passenger terminal and associated landside functions
- the logistics/air cargo and industrial special zone
- the smart village-incubator as a real estate development
- a hybrid electrical microgrid providing an islanding capability
- an associate agrivoltaics venture
Each of these ventures, with its own operational and business/financial characteristics, are part of an integrated plan.
Interested parties can, consequently, be involved in all or some of the individual opportunities.
Each of the ventures have different levels of technical complexity, requiring the sourcing of systems from abroad. This is in addition to the significant local involvement in construction and installation.
Equipment and technology requirements
The development requires complex equipment systems for:
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- the aeronautical infrastructure, including the runway with navaids and electrical equipment
- the passenger terminal with its equipment and IT requirements
- the electrical microgrid, with intelligent controller, photovoltaic panels, and battery inverters
This is in addition to other systems required as part of the master development. An initial estimation of these imported requirements for the start-up phase are:
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- $20-million (USD) for aeronautical and terminal requirements
- $8-million (USD) for the intelligent electrical microgrid
Economic fundamentals
The Mandela Bay Aerotropolis and Logistics Gateway Development initiative is based on a model which addresses the strategic/economic and financial goals of the individual ventures. This enables a phased implementation of the master plan, creating a window to the international markets, while increasing trade and tourism.
An initial capital expenditure estimate for the aeronautical infrastructure—the passenger terminal—the industrial logistics complex, and a hybrid electrical microgrid is calculated at approximately $230-million (USD).
The economic benefit of the project is calculated as:
- during construction 1,700 full-time direct positions and a further 850 indirect jobs
- on completion, an overall economic contribution including industrial/logistics maritime and passenger functions of over $200-million per annum
It is expected that, as an intercontinental gateway airport, a doubling of passenger traffic to Chief Dawid Stuurman International Airport, as a regional airport, will occur. This is to be complemented by the financial viability of individual ventures with the establishment of new enterprises in Nelson Mandela Bay Metro and the province.
Sponsors and capabilities
The development is undertaken outside of a conventional infrastructure model, where a need is identified and initiated by government.
The initial project sponsors include both the public and private sectors, where the initial plan was defined by Franco Eleuteri and Associates, as experts in the field.
Public Sector involvement and input has been received from:
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- The Mandela Bay Development Agency
- Nelson Mandela Bay Metro
- The Eastern Cape Development Corporation
- The Department of Trade and Industry
Private Sector involvement and input has been with:
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- Private companies such as Pagdens, The Mantis Group, BKB, PE Hotels, and others
- The Exporters Council
- The Nelson Mandela Bay Business Chamber
Franco Eleuteri, the lead specialist on the project, performed a similar assignment for the planning and development of the Dube TradePort and King Shaka International Airport in KwaZulu-Natal, South Africa. This involved presenting the work to the National Cabinet and the then President Zuma.
His work has involved sea-air-inland ports, economic zones/satellite cities, and transportation-logistics projects worldwide. The project sponsors and participants will capitalize on this knowledge together with that of national/international consulting engineering companies and private equity participants.
It is, therefore, expected that as the project proceeds, additional sponsors and participants will become involved. This will be both on a national and international basis.
Implementation financing
The approach presently used by government entities to undertake infrastructure projects frequently makes use of the private sector, due to the difficulty of sourcing taxpayer funding.
As a result, use is made of Public-Private Sector Partnerships which solicit private sector participation and funds. These vary in terms of their structure and the level of participation of the various entities.
The Mandela Bay Aerotropolis and Logistics Gateway Development intends to create an SPV with the goal of a non-bureaucratic process and a cost-effective fast-track process.
The resulting implementation strategy seeks to facilitate private sector involvement with its associated project finance structure. This would capitalize on the incremental land values, which would be achieved as part of the development process. The model would also utilize the funding generated by the financially-driven ventures as a means to offset the strategically motivated investment.
The project will, therefore, involve national and international equity participation and loan financing, while also seeking development funds. This would be facilitated by the SPV, which enables the project participants to assume different levels of participation and risk.
Conclusion
The development, therefore, enables its participants to achieve their individual interests while meeting the overall strategic goal. The approach is motivated by the infrastructure needs of the Eastern Cape, while addressing the shortage of capital funds available to government and the SOEs (State Owned Enterprises).
A project of value can, therefore, be undertaken by use of a new model as an aerotropolis and logistics gateway function.
Contact
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