Gauteng prepares for two more special economic zones

The Gauteng provincial government is proceeding with the establishment of two new special economic zones (SEZs) in addition to the small one at OR Tambo International Airport.

One zone centred around the automotive industry — in particular the Ford and BMW plants — is envisaged for Tshwane and another based on platinum beneficiation in Springs.

Also under investigation is an SEZ in the Vaal Triangle.

A feasibility study is being conducted, department of trade & industry director-general Lionel October said in an interview on Friday.

The land for the SEZ in Tshwane has already been acquired — Ford is bringing in its suppliers, and a formal application for the establishment of the zone would be submitted in the next two weeks, he said. The provision of another crucial incentive in these zones — lower electricity prices

— was under consideration as this was a key issue raised by investors as undermining their competitiveness.

Investors are attracted to SEZs by a range of incentives, including reduced corporate tax rates and state-of-theart infrastructure.

These zones are a central pillar of President Cyril Ramaphosa’s stimulus package and he mentioned them again in his state of the nation address last Thursday.

The package cited the need for affordable electricity prices.

October said work was under way for a SEZ in the Northern Cape near the Vedanta zinc mine. The first phase of the mine had been completed and the second phase would now begin.

Only the Northern Cape and the North West do not have SEZs. Trade & industry minister Rob Davies said in January the department wanted to double the value of SEZ investment from R11.6bn to R23bn by end-2019.

According to the department, the SEZ programme has attracted 115 private companies with operational investments of R11.6bn from private investments, leveraging off the R4.6bn of public investments.

The programme has created more than 14,020 direct jobs. October said the three biggest SEZs — Coega in Nelson Mandela Bay, East London and the Dube tradeport in KwaZulu-Natal — are “roaring ahead”.

Coega has more than 30 investors while East London has about 28.