COEGA Development Corporation (CDC) chairman Moss Ngoasheng was not party to its decision to procure the services of StewartScott, an engineering firm which is in a joint venture with Safika and of which Ngoasheng is a board member, a CDC spokesman said yesterday.

CDC spokesman Raymond Hartle said yesterday Ngoasheng did not sit on the corporation's procurement or audit committees when the decision to sign the contract with StewartScott was made.

Hartle's comments come after the publication of a report last week by the Public Service Accountability Monitor's Colm Allan, which raised concern about conflicts of interest in the development of a R4,5bn port and an industrial development zone at Coega, Eastern Cape.

CDC is a private company which was appointed by Trade and Industry Minister Alec Irwin to foster investment in Coega's industrial development zone.

Ngoasheng has called on Allan to apologise for his comments.

"Untold damage can be done to innocent people when false accusations are made," Ngoasheng said at the weekend. Responding to Ngoasheng, Allan said he had not accused the CDC chairman of impropriety.

"I merely requested, under the Freedom of Information Act, to know whether Ngoasheng was party to a decision to procure the services of StewartScott," Allan said. "I requested the information from CDC more than a month ago and to date I have had no response."

Hartle denied yesterday that the CDC had received a request for information from Allan. "Our request is a matter of record," Allan replied.

Aside from the conflict of interest question, Allan's report raised concern about the economic viability of the R4,5bn port development, which is to be funded by the taxpayer.

The viability of the port depends on securing an "anchor tenant" in the Coega industrial development zone, which would provide the port's primary cargo. To date two potential anchor tenants, Billiton and German steel manufacturer Ferrostaal, have withdrawn from Coega.

Ferrostaal, which is part of a consortium from which SA has procured three submarines, was touted to construct a R6bn steel mill at Coega to offset the cost of the submarines.

In his report, Allan says government's R43bn arms procurement deal "could not have been sold to the SA public without Coega The SA taxpayer could not have been asked to fund even a portion of the costs of the Coega project without the promise of massive investments from the successful arms suppliers."

Allan's report also draws attention to an environmental impact study, commissioned by Portnet and CDC and published earlier this month, which questions the viability of the port development. The study recommended that the port not be built "if the industrial development zone is not viable."

Hartle said yesterday he did "not recall" the environmental impact study's recommendation that the port project be canned unless the industrial development zone is shown to be viable.  

With acknowledgment to Jonny Steinberg and Business Day.