SA may designate Saldanha IDZ by September 2012
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SA may designate Saldanha IDZ by September 2012

A feasibility study into the creation of South Africa’s fifth industrial development zone (IDZ), at Saldanha Bay, in the Western Cape, estimates that the development could yield between 4 240 and 8 930 direct jobs over a 25-year period and add between R11.2-billion and R31.6-billion in yearly revenues to the regional economy.

The report, which was produced jointly by the Department of Trade and Industry (DTI), the Western Cape government, the Saldanha municipality and Wesgro, calculates the total number of jobs that could be created at between 11 900 and 29 000.

Western Cape Finance, Economic Development and Tourism MEC Alan Winde said the study, which was released for public comment on Monday, sought to present a “holistic” view of the potential socioeconomic benefits, costs, risks and impacts of a designated IDZ in Saldanha Bay.

The report would remain open for comment until end November 2011, following which the feasibility study would be finalised in December.

The intention currently was to complete a business plan by March 2012 and to then make an application to the DTI in April for the zones’s designation and licensing. The designation process, which also required Cabinet approval, was expected to be completed by September next year.

The study highlighted five sectors as offering particular potential, including offshore oilfield services and marine repair; titanium and zircon beneficiation; wind-turbine blade production; solar geyser manufacture; and the production of hot briquetted iron.

Local Government, Environmental Affairs and Development Planning MEC Anton Bredellargued that, while the proposed IDZ had the potential to catalyse industrial development on the West Coast, it would also need to operate within the constraints of a yet-to-be-finalised environmental management framework.

A Saldanha Environmental Protection Agency might also be formed to ensure that the initiative took account of the region’s scare water resources, as well as ensuring that air quality standards were maintained.

Water, waste, power and transport infrastructure would be required and the study estimated that the public sector would need to invest between R5.12-billion and R14-billion to support the IDZ. But such an investment could, in turn, attract private sector capital of between R17.25-billion and R90.82-billion, on 1 440 ha of available land.

The proposed IDZ could also be the first to emerge following a broad-ranging review of the IDZ concept and how it had been implemented at Coega, East London, the airport zone in Johannesburg and in Richards Bay.

The DTI review highlighted a number of shortcomings of the IDZs in promoting domestic and foreign investment in estates surrounding harbours and airports and led to the drafting of new legislation, which would also be published soon.

The new Dedicated Special Economic Zones Act would enable government to establish new special economic zones, or SEZs, in areas that were not necessarily physically associated with an airport or a seaport.

An IDZ would then emerge as a type of SEZ, which would be purpose-built industrial estates that seek to leverage both domestic and foreign direct investments in value-added and export-oriented manufacturing industries and services.


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