Cape Town. The Coega project has been cleared of all allegations of irregularities by auditor-general Shauket Fakie.

A negative finding, casting doubt on the proper management of the multibillion-rand project, would have had serious implications on the project's credibility and attractiveness to investors, both domestically and internationally.

The project will see the development of a R2,65bn deepwater port as part of an industrial development zone (IDZ).

A special investigation of the project was launched, following allegations that the Coega Development Corporation (CDC) was wasting taxpayers' money and guilty of irregularities in handling its finances. The allegations were mainly made by the Public Service Accountability Monitor in Grahamstown.

However, Fakie's investigation found no substance to these allegations. His report was tabled in Parliament and Eastern Cape legislature yesterday.

"We reviewed policies and procedures followed in the awarding of contracts over the period 2000-01 and found the processes followed by the CDC in the procurement of services to be transparent," Fakie's report stated.

"(Also) based on records and documentation reviewed during the investigation, no indication of conflicts of interest or benefits accruing to individuals involved in the contract awarding process could be found."

Fakie stated the investigation did not include a review of all tenders submitted nor did it include a review of the actual adjudication processes. Contracts awarded prior to the establishment of the CDC also did not form part of the investigation. The CDC was found to comply with the principles of corporate governance.

Dealing with the project's economic viability, Coega management said, in an addendum to the report, that investors had shown interest in the project.

French firm Pechiney had proposed to build a R17bn aluminium smelter.

Also, other potential investors had shown interest in projects such as a precision strip mill, a container fabrication plant and an electro manganese dioxide plant.

CDC spokeswoman Vuyelwa Vika said yesterday Pechiney was negotiating individually and at different levels with the CDC, Eskom and the National Ports Authority. "With specific regards to the CDC, talks are nearing finality," she said.

Management stated that the commitment shown by government and parastatals has had a positive effect on the future development of the IDZ.

Eskom had confirmed that there would be a substantial upgrade of electricity supply to the area, and tenders for the different elements of the port had been awarded in August.

Management said it had received a report on the viability of the container terminal and the Port of Ngqurha, which included projections concerning the growth of container traffic in the country.

Financing bodies had, management stated, also shown interest in discrete elements of the Coega project.

Vika said the CDC was holding talks with prospective suppliers and service providers parallel to the Pechiney project.

It was also awaiting a response from Ferrostaal, with regard to a possible investment.

With acknowledgements to INet Bridge and Business Day.