In order to sustain and facilitate growth in exports, the South African government will over the coming years strengthen the logistics and transport corridor between SA's main industrial hubs to improve access to ports and export facilities, Economic Development Minister Ebrahim Patel said on Monday (20 February 2012).
Speaking at the launch of the new 3-series BMW in Rosslyn near Pretoria, which will create some 600 new jobs, Patel said Cabinet had established a Presidential Infrastructure Coordinating Commission - the PICC - to drive and support the rollout of infrastructure.
To this end significant investment in port, rail and road infrastructure would be developed.
The resultant infrastructure will reduce transport and logistical costs to BMW and other manufacturers, making South Africa a more competitive investment destination.
"As a first step, President Zuma announced in the State of the Nation Address, an agreement between Transnet and the Port Regulator to reduce port charges by R1 billion this year, as a means of balancing port utilisation and reducing costs," Patel pointed out.
He noted that the MIDP (Motor Industry Development Program) would soon be replaced by the APDP (Automotive Production and Development Program). The APDP will focus on a production incentive that calculates benefits on the basis of actual local production value (local content) and not on material cost as is the current practice under the MIDP.
"It is part of a strong and focussed drive to localize manufacturing and to strengthen South Africa as a manufacturing platform for global markets. Our ambition is wider than the auto sector and embraces a number of sectors in manufacturing.
Indeed, we have signed a local procurement accord with business, labour and community organizations to support this effort, and published an initial list of products in December that public entities need to procure from local manufacturers," Patel said.
"But we also recognise that the most solid localization platform is to be a flexible and competitive manufacturing base. This in turn requires investment in skills, know-how and technical capability.
"The new incentive is meant to stimulate growth in the automotive industry to 1.2 million vehicles per annum by 2020 with specific gains in the component industry. As such, the APDP is meant to be a generator of jobs and industrial development.
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