Update October 2008: I have added a follow-up story on the current state of shipbuilding in Durban. Click here to see if the window of opportunity really did open. Allan Jackson.

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A window of opportunity opens

By Allan Jackson - October/November 2006

Ship building and ship repairs have been carried out in Durban from early times but there had been no ships built in Durban since 2003 and the repair industry had been stagnant. I recently wrote an editorial on the subject in my capacity as editor of KZN Industrial and Business News and, during my research, I found that things are starting to look up a bit.

I wrote:

Ship building and ship repair has a long history in Durban and has been a substantial contributor to the local economy over the years.

Most people would probably guess that the first ship was built in Durban in the 1800s after a permanent settlement was established. In fact, and you can use this to amaze people at parties, the first ship we know about was built in 1685.

A vessel called the Good Hope was wrecked off Durban and the sailors came ashore and made their home on the Bluff. They later linked up with other sailors, who had been wrecked on the Bonaventura and the Stavenisse, and one of them managed to make a hammer and a saw out of metal from one of the wrecks.

The sailors then built a ship called the Centaur and, after loading her to the brim with provisions, they sailed her to safety in Cape Town. The authorities, impressed with the quality of this first Durban-built vessel, bought her for a handsome sum.

Ship repair could have an ever longer history in Durban because it is believed that the ancient Phoenicians sailed down this coast and may well have taken advantage of our sheltered bay to mend their ships. Durban was an extremely important ship repair facility during both world wars and played a vital role in the allied war effort.

No ships have been built in Durban since 2003 and, although ship repair is still pretty big business, the industry has stagnated a bit in recent years. Being very interested in the harbour, which I always think of as the heart of Durban, I thought I'd do a quick survey to see what the current situation is with these two important industries.

My first stop was at Elgin Brown and Hamer at Bayhead, where I spoke to MD Rob Deane to get his take on the situation. He confirmed my initial impression by saying that his company was experiencing a reasonable flow of work including some major jobs coming as the result of accidents and disasters at sea.

He believes, however, that the ship repair industry is not operating at its maximum potential and that this is mainly due to constraints imposed by the National Port Authority's (NPA) ownership of the dry dock facilities which his company and others depends on to carry out major repairs which, in E,B&H's case, cannot be completed in their own floating dock.

Deane told me that the charges levied by the NPA are considerably higher than those of similar facilities overseas and that this discourages many ship owners from having their vessels repaired here. He said that it was unusual for ship repairers not to be the owners of the repair facilities and that this had led to the higher charges.

He said he quite understood that the NPA could not be expected to run its facilities at a loss, or on a break-even basis, but that their profit margin drove up the overall costs. In the case where a ship repairer was making a profit on repair work, it could afford to charge less for the use of the repair facilities.

Another constraint for the industry is the continuing uncertainty over plans to expand the facilities in the Port of Durban which makes repairers unwilling to make new investments in buildings and equipment. One of the expansion plans currently being discussed, for example, is to extend the port's container handling capacity by digging out new quays at Bayhead.

The land which would be effected by the dig out is occupied in part by Elgin Brown & Hamer who have it on a long lease. Uncertainty around this and other issues is having a negative effect on the industry, but Deane remains hopeful that things will improve markedly if agreement can quickly be reached over the ownership of the repair facilities and on the expansion plans for the port.

He believes that a window of opportunity is opening for Durban in the shipbuilding and repair industries due to the fact that orders for new vessels are outpacing the capacity of shipyards around the world to supply them.

Southern African Shipyards (SAS) MD Louis Gontier echoes the positive outlook for shipbuilding and says that the industry could be set to boom in Durban. After a gap of three years during which no ships were built in Durban, he says that his company now has a trawler under construction in their yards and will most likely build two large barges before the end of the year.

The company has also partnered in a joint venture with Dutch firm Damen and will be building and commissioning two tugs for the NPA. They will soon commission a small slipway which will allow them to launch and dock vessels of under 500 tons and are in discussions to re-commission the old slipway on their property, which will allow the launch of vessels up to 140m long.

Gontier told me that he had recently attended a Shipping Exhibition in Germany as part of a team, including government, which showcased KZN as a shipbuilding cluster. He said that foreign firms had showed great interest in having ships built in Durban and that SAS was quoting on large projects including the building of offshore supply vessels, large yachts and hotel ships.

He said that offset requirements for some overseas firms, and the devaluing rand, was helping to make South Africa competitive, once again, as a builder of ships. He said that the benefits to the local economy could be enormous, with every job in created in shipbuilding leading to the creation of eight other jobs downstream.

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