Nompumelelo Magwaza
KWAZULU-NATAL is poised to be a future platform for oil and gas as well as renewable energy industries in the country.
This will be done through the Richards Bay Industrial Development Zone (IDZ) that was currently lining up multimillion-rand investment deals with leaders in these industries.
The zone’s chief executive, Phumelele Motsoahae, said this week that Richards Bay, which had struggled to gain traction as an IDZ, was poised for growth and investment opportunities.
Richards Bay was one of the three active IDZ in the country, with R5 billion worth of investment collectively. KwaZulu-Natal economic development MEC Mike Mabuyakhulu said the IDZ was negotiating a potential R12bn investment.
Last year, the IDZ signed recognition agreements with three companies representing investments worth R4.56bn.
Nyanza Light Metals, part of the Mauritian-based Arkein International, Dubai-based Oasis Group and Phaka-Sangle Energy Africa were companies with pledged investments.
They will be operating in titanium dioxide pigment, waste oil process and solar water heater sectors.
The IDZ was one of the first economic initiatives that was established in South Africa to complement the country’s democracy with economic development.
The notion around IDZs was that they should be linked up with seaports and airports, which is why they were established in places such as Coega, Richards Bay, East London and OR Tambo International Airport, Saldanha and recently Dube TradePort.
“The inherent benefit of the IDZ was confined in terms of geography, sector and areas in which it could operate. This was reconfigured with a lot more liberalised set of incentives through the special economic zones,” said Motsoahae.
The Special Economic Zone Act was promulgated in May and would only become operational once the regulations have been adopted.
The Department of Trade and Industry has already earmarked the recently launched Dube TradePort and the Tshiame IDZ in Harrismith as the first to be transformed into special economic zones as soon as the regulatory framework had been established.
“We have already seen the benefits of being in the IDZ with the differentiated set of incentives that are being offered such as corporate income tax, the opportunity and certain discount that one gets for building purposeful infrastructure,” said Motsoahae.
In Richards Bay, investors have been lining up to be part of the IDZ which has the advantage of being close to one of the country’s deep water ports.
Motsoahae said some of the short-term investments that would be announced later this year would include a light manufacturing and renewable industries being set up in Richards Bay.
“But for a long term we are poising ourselves as a host platform for oil and gas opportunities as well as renewable energy sector,” he said.
The IDZ has started incorporating renewable energy technology in the lighting infrastructure. “We are currently building roads, utilities as well as solar lighting for the zone,” he said.
The zone was also expected to make an important announcement next month about possible investment opportunities. “Most importantly would be the fulfilment of the job creation, especially in construction,” said Motsoahae.