Special Economic Zones are engine rooms for transformation

08 May 2018

The Department of Economic Development, Tourism and Environmental Affairs, mindful of the delicate balancing act between economic redress and investment attraction, has put in place measures to make conducting business in the province much more effortless. These interventions included the opening of a One Stop Shop facility within Trade and Investment KwaZulu-Natal offices in Durban and two smaller satellite One Stop Shops within Dube TradePort Special Economic Zone and Richards Bay IDZ respectively.

The MEC for Economic Development, Tourism and Environmental Affairs, Sihle Zikalala said the province was all about improving the ease of doing business whilst simultaneously ensuring that its people benefited from the investments accrued.

“Already, Dube TradePort, which is the new industrial and aviation hub for the province under the concept of Aerotropolis, has been the first to have a subsidiary One Stop Shop. “This is because we want people wishing to invest in various sectors of the economy to enjoy access to business information. Hence the One Stop Shop serves as a single point of contact to interface with various government agencies and departments to achieve a quick response to business application and provision of pertinent details for members of the business fraternity to make informed decisions about doing business in the province,” said Zikalala.

In the Richards Bay region, Zikalala said the department was fascinated and impressed with the progress made with respect to industrial development which again is influenced by the area’s close proximity to the advanced harbour facilities. Notwithstanding numerous new industrial developments, the department is also thrilled with the announcement of Richards Bay’s gas to power energy hub which will attract more industries into the region and is also on the fast lane with respect to mining operations.

“These two public entities have already begun serving as developmental nodes that house different sectors of the economy, in the north and south of the province respectively.

“According to the projected, R25 billion investment into the construction and activation of the gas to liquid plant would heighten investor confidence in this region with a prospect of creating in access of 3 000 construction jobs and 100 for permanent staff. These developments contribute to the triangular industrial sites of Richards Bay, Durban and Pietermaritzburg where state-owned entities are playing a vital role in energising local and regional economies,” Zikalala said.

The Dube TradePort industrial hub, like Richards Bay IDZ, brings meaning to the department’s role as the province in the activation of the country’s economy. This is reflected in its achievements during the 2017/2018 financial year where the entity signed around R1.7 billion in investments, of which R1.6 billion was black-owned companies. This resulted in the creation of overall 953 temporary job opportunities and 432 permanent positions. In the new financial year, Zikalala said they are expecting more investments from the private sector to enhance the precinct’s profile as the special economic zone.

“It is pleasing to note that Richards Bay IDZ continues to walk the investment and growth talk, which is marked by a sustained campaign to draw the attention of investors to the region whilst motivating existing firms towards expansions that had a butterfly effect on business and employment opportunities,” he said.

In the real spirit of Operation Vula that seeks to spur on all sectors of the province’s economy as practical levers for radical socio-economic transformation and desire to broaden growth in this north coast region, Richards Bay IDZ has in recent times signed investments worth more than R10 billion encompassing business operations from a wide range of economic sectors.

With continued efforts to create suitable sites for business operations, it is not surprising that RB Energy Services opted to settle in the Richards Bay IDZ with the construction of business facilities having started with an estimated R20 million investment. “Partnerships are pivotal for development, hence we thank uMhlathuze Local Municipality for working closely with the IDZ. More= pleasing is that the Richards Bay IDZ is mindful of balancing big industrial development with inculcation of an entrepreneurial spirit amongst emerging enterprises, which is reflected in the prioritisation of emerging contractors that collectives were awarded in excess of R221 million during business and project implementation,” he said.

What is an Industrial Development Zone (IDZ)?

An IDZ can be defined as “a purpose-built industrial estate, linked to an international air or seaport, which might contain one or more multiple Customs Controlled Areas (CCAs) tailored for the manufacturing and storage of goods to boost beneficiation, investment, economic growth and, most importantly, the development of skills and employment” (SARS: Industrial Development Zone).

Accordingly, IDZs are intended to provide investors with a competitive advantage by:

• offering tax incentives,

• providing the necessary infrastructure and utilities,

• simplifying administrative requirements, and

• customs support services.

While IDZs are funded jointly by all three tiers of government – i.e. National, Provincial and local – Investments from National is channelled through DTI by way of grant funding and is exclusively intended for infrastructural purposes.

In contrast, funding from within the province caters for both capital and operational expenditure in respect of the entity.

The RBIDZ comprises 240 hectares of land, with a future potential of more than 1 000 hectares. All completely developed IDZ sites are demarcated, fenced and receive access control and security systems and the RBIDZ will establish a Main Customs Control Centre.