IDZs fail to meet targets

South Africa’s Industrial
Development Zones (IDZs)
are not meeting their
investment targets.
According to the
Department of Trade and
Industry’s mid-year report,
Coega, East London and
Richards Bay IDZs signed up
no new investors in the six
months April to September.
“There was no achievement
at mid-year for new investors,
jobs created and the value
of new investments in the
Coega industrial development
zone (IDZ) in the first
half of 2012/13,” said the
department.
This is “due to the impact
of the recent economic
recession, which has slowed
down planned investment
activities in the IDZs.
“Only one investor
was anticipated to have
been secured in respect of
Coega between April and
September 2012, but that
investor has been delayed due
to the current status of the
environmental impact scan
pending approvals,” it adds.
The number of new
investors, jobs created and the
value of new investments in
the East London IDZ in the
first half of 2012/13 “is zero
because no new investors
were anticipated for the two
quarters of the year”.
Richards Bay IDZ is
not expected to secure any
investor, as the entity is still
dealing with bulk earthworks
and other enabling
infrastructure which was
delayed by the challenges of
the “wetlands”.
The filling up of the land
to development stage started
during 2011/12 and would
be completed by the end of
this financial year, said the
department.
All three zones are
competing against IDZs
and similar economic zones
around the world which offer
much greater incentives in
the form of tax concessions
and free or low-priced land,
as well as fewer labour
restrictions.
The South African IDZ
strategy was devised on the
premise that the competitive
advantage was the availability
of abundant and cheap
electricity.
Government’s Special
Economic Zone (SEZ) policy
and incentives are still in the
melting pot.