New law aimed at improving IDZs

Speaking at a press conference on Monday (16 January 2012), Davies said the new law would aim to overcome key challenges faced by the Industrial Development Zones (IDZ) that have favoured few regions, support that focused narrowly on the provision of infrastructure, planning that was done on a ad-hoc basis, inadequate coordination among key government agencies and stakeholders, financing arrangements that made it impossible to do long term planning and inadequate targeting of investments.

Special economic zones are accepted international practices that designate a certain area for the establishment of industries to enhance a country's global competitiveness. Such zones have been credited with the emergence of China and other far eastern countries as major industrial players.

These zones usually have a range of incentives ranging from tax breaks, to subsidies and special concessions.

SA has focused on establishing four industrial economic zones, namely in Richards Bay in KwaZulu-Natal, Coega near Port Elizabeth, East London and at OR Thambo International Airport near Johannesburg.

The latter is not functional due to the inability of the government departments and state-owned companies that include Denel and the Airports Company of SA to coordinate their activities.

Davies said the three operational zones had generated R11.8 billion worth of investments and had created more than 33,000 jobs in construction and employment in companies located within.

He said that government also wanted a broader definition of special economic zones that would include scientific and technology parks and other forms of commercial activity.

The new law, to be called the Special Economic Zones Policy Bill, will see the creation of a board to advise the minister, and the establishment of a fund to provide more coherent and predictable funding framework that would enable long-term planning, strengthen governance arrangements including clarification of roles and responsibilities of key stakeholders.

Davies would not say how much money would be in the fund, but did emphasise that its use would be to streamline environmental protection, infrastructure development and coordination.

Dti director general Lionel October said that the designation of Saldanha Bay as an industrial development zone was well underway and that it should be completed by the end of the year.