In 1996—upon completing the ‘seamless services’ project at Spoornet—I landed myself a lucrative job—as Business Manager: Multipurpose Terminals—at Portnet. Back then Portnet was both the port authority as well as conducted port operations. I joined the operations part of this South African supply chain system and was located in the port in Port Elizabeth.
As Business Manager—some mouthful term for General Manager for those who are into simplicity—I had the opportunity, among other things, to be involved in the process of deciding on the location of a new deep sea port at Ncquka—some twenty kilometers outside Port Elizabeth. Why would Port Elizabeth need another port nearby? Was it sheer wastefulness among those who already have?
No. Rather, it was in response to competition from elsewhere. That right! When under attack defend yourself not otherwise—as Malawians are wont to do. For instance, once upon a time—when Mugabe got busy getting rid of white tobacco farmers—I wrote [while in South Africa] to certain political figures; advising on how we could capitalize on that error of judgment. The response was—instead of ‘grabbing’ the white farmers—Malawi got busy empathizing with Mugabe. A Malawian President flew across and feted Mugabe for his anti-colonial stance! On the other hand, the Mozambicans [and indeed the South Africans] had no such compunctions. They took in the farmers. To this day, Mozambican tobacco is doing roaring business while Malawians scratch about in this self-made economic confusion.
So, it happened that in the early 90s South African ports, on the eastern seaboard, came under attack from Port Louis, in Mauritius. From the South African shores we watched deep sea ships bypassing South Africa. Traffic was being lost and those fickle ship captains—once they get into a habit of ignoring you—take some doing persuading back. So, the South Africans visited Port Louis NOT to praise the Mauritians for such an economic ‘coup de etat’. Instead, secret missions went in to study what it was that ocean-going vessels found attractive about that island port. The answer came.
Port Louis was situated out at sea—enabling massive 500,000+ toner deadweights to anchor and release their cargo from out there without the hassles that Port Elizabeth—ensconced in the shallow waters of Algoa Bay—had become. Hence to win back the traffic—disappearing towards Port Louis—a deep sea port was needed in and around Port Elizabeth. After some brain scratching, Ncquka—a salt mining village some twenty kilometers away the existing port—was finally settled upon.
That’s it: ‘Build a port at Ncquka?’ The political decision was convinced this was a simple ABC process. Indeed, some black elephants, within the new African ruling party, truly promoted this thought. Clearly, a white elephant was in the making. However, some of us—with some business thought between our ears—began to ask questions. A deep sea port—yes. Steal back traffic from Port Louis—may be. But, what else after that traffic has been won back?
You have, by now, heard of the arguments that were put forward in support of the ‘Nsanje Port Dream’. The figure of two thousand containers per year and some indeterminate regional traffic and nothing much else was bandied about. People in the civil services cheated their way into having their petty ‘David Livingstone’ project developed.
Now, having worked in the ports in South Africa, I happen to know that two thousand twenty-footers are the stuff you put into one ocean-going ship and go to lunch while tugs push the thing out of harbor and into the high sea! So, someone in the civil service of Malawi had lied to whole President that we would set up a port on the basis of a single ship load! Just as well the Mozambicans decided to be ‘nasty’. Can you imagine the kind of egg we would have had on our faces for the other 355 days that the Nsanje Port would stand idle?
At Port Elizabeth and Ncquka we got busy thinking deeper: how would we keep Ncquka fully occupied; considering the port at Port Elizabeth was to remain functional for some time to come. Indeed, ideas of moving away traditional Port Elizabeth traffics—manganese ore [from Keetmanshof], fresh orange exports, scrap metal, ore scintilla, VW cars to China and containers carrying in VW parts etc—to Ncquka were bandied around. But, these ideas were soon rejected because they amounted to ‘moving around existing furniture’ and calling that development. We needed a real and visible bonanza!
Credit to my colleague, Kevin Wakefield—then Chief Executive of Eastern Cape Chamber of Commerce and later: because of successes at Ncquka Chief Executive of the South African Chamber based in Johannesburg—we had to think outside such narrow boxes. We needed to keep Ncquka busy for 356; if not 500 days of the year. Out of the numerous meetings emerged new thought processes and terms. One of these was ‘Anchor Tenant’.
What is an anchor tenant? Where did the term come from? What was its relevance to Ncquka? What is its application to a vibrant Nsanje Port? How can it be applied to processes of economic development in Malawi?
Back in mid 1996 the term ‘Anchor Tenant’ was not new. In fact, it is as old as the first viable supermarket and/ or department store in the USA back in the mid to late 1930s. In other words, it is a property development and/ or asset development term. The property development guys in NICO—in building a successful shopping complex at Chichiri had an understanding of what was involved. That is a thing that the old PTC Supermarket—and thus Kamuzu—on Victoria Avenue did not understand. It had no anchor tenant and expectedly it is closed, isn’t it? Indeed, I saw, in the late 80, a few such sorry shopping complexes in Liverpool, England; products of ill thought shopping complex development or disappearing local and regional anchor tenants.
Putting up a shopping complex—the brick work—is a simple exercise; just as putting up a port is. The challenge is figuring out who the anchor tenant of that shopping complex—in our case the port at Ncquka and now Nsanje—would be. It is not by some nomenclatural accident that Chichiri Shopping Center is also called Shoprite Shopping Center. Shoprite is the ‘anchor tenant’ of that complex. Take out Shoprite today [while not making arrangements to bring in another major operator of similar caliber and operations] and Chichiri Shopping Center would be on its way to death. It may not be immediate but that is the final outcome. This is where ‘economic euthanasia’—as I wrote in an earlier blog—may become necessary.
So an anchor tenant—to use a shipping terminology—is the ‘anchor’ that ensure that the ‘ship’ does not, during heavy weather, float about; hitting itself and crushing to smithereens expensive quay walls. Indeed, one of the reasons why all ports [until Port Louis refused to buck the trend and was built in open seas] are situated in a bay or mountain alcove. This is to provide additional controls against such weather vicissitudes. The idea is to make sure the ship is not overturned or run ashore during a storm. So besides deadweight anchorage, ships need physical shelter or break winds. I am not sure what kind of anchors and wind breakers the architects of Nsanje Port designed for ships in the port in case of a dangerous storm?
An anchor tenant [plus the wind breaker] is the economic institutions in a port and/ or economy [including shopping malls] that ensure that the economic viability of the complex is sustainable throughout its economic life. Indeed, in property development business operations such as Shoprite generally occupy over 30% of the floor space of the complex. Yet, they have enough clout or power to negotiate down the rentals to less than 10%; while the small or subsidiary anchor tenants [those shops that come to the complex to assemble around the ‘anchor’] end up meeting 90% rentals and operating costs of the center! Unfair but a necessary evil for those who will make money from the traffic that the anchor tenant attracts!
So at Ncquka we needed to define an anchor tenant—the big guy that would attract continuous and year-long traffic to the port after the Port Louis traffic was won. We embarked on finding such an anchor tenant. The first lesson came from Richards Bay, in Kwazulu-Natal. Originally, a coal ‘conveyor belt’—nearly 350 million tons of coal is delivered into this port for shipment into the global system—Richards Bay was a sleepy town because the coal operation involved handling of coal into ‘pre-stacks’ in between ship arrival and loading. To generate continuity, an aluminum processing plant was established at Richards Bay—just outside the port area. Consequently, a comprehensive support industry—supplying both the port and the aluminum plant—has emerged. Additional ships, collecting aluminum ingots into the global market, now ply in and out of Richards Bay on a daily basis. Now, a beehive-like city—including the old Empangeni Town nearby—has grown behind the coal port.
Ncquka needed a similar industrial base around so as part of the Eastern Cape Chamber we went about attracting Billington HBP of Australia to establish and aluminum processing plant at Ncquka. Today, Ncquka, Port Elizabeth and the VW Assembly city at Eikenhof are fast coming together as one unified Nelson Mandela Bay.
Similarly—something those who developed the Nsanje Port concept failed to appreciate—there was [is] a need to define an anchor tenant. A viable and sustainable economic activity is needed to sustain Nsanje for the other 355 days of the year; long after the two thousand twenty-footers have left for Chiinde. How do we avoid creating a ghost town out of the Nsanje Port dream? It is a frightening specter but we already have such things around Malawi. For example, if you want to see a port without an anchor tenant take a lazy ride to Chipoka, Chilumba or even Monkey Bay when the Mtendere and/ or Ilala are not in port. Dead, aren’t they?
Nsanje needs an anchor tenant within the port itself. We need to get organized and approach the Billingtons of this world to establish an anchor tenant at Nsanje. The answers are there. The bauxite coming into Richards Bay and Ncquka is fetched from as far as Tete in Mozambique. Don’t we have bauxite right here—in Mulanje?
But more importantly, Nsanje needs an economic miracle in-country—somewhere in the Lower Shire or beyond. My suggestion that we persuade the-powers-that-be to establish a Nsanje Port Development Authority [NPDA]—responsible for formally and actively promoting development for Nsanje Port has met with wane smiles from certain technical authorities: nothing much else thereafter! Besides, the bauxite in Mulanje and an aluminum plant in Nsanje Port, the NPDA wo and the potential industrial complex around it. The traffic from theuld be responsible for resuscitating the mothballed Bangula Dam industries would keep Nsanje Port night and day!
So are anchor tenants only for Nsanje Port? In my next blog I link this argument to my earlier blog on economic engines; developing the thesis that even the national economy needs such anchor tenants.
The author can also be contacted at zivaiclaude@gmail.com
No comments:
Post a Comment