Cape Town port authorities have started work on a ZAR4.2 billion (US$647 million) expansion that will more than double container capacity in four years, reports South Africa's Business Day newspaper.

The project received final approval from the major corporate player, South African transport giant Transnet. Tenders have since been awarded for the construction and dredging.

The upgrade involves building a four-berth deep-water terminal that will have an annual capacity of 1.4 million TEU. Approval has been granted for the first two phases, but the third phase will wait on future demand, as it would expand capacity to 2 million TEU.

National Ports Authority CE Khomotso Phihlela said the expansion was needed to keep up with worldwide expansion. While South Africa initially expected growth of 8-10 per cent, growth in the past three years averaged 15 per cent. This compares with US growth of 6-8 per cent. The Far East grew faster, and South Korea's growth rate was 22 per cent.