Laws for industrial zones to be overhauled

Posted On Thursday, 27 October 2011 02:00 Published by eProp Commercial Property News
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Treasury official says the legislative framework for industrial development zones (IDZs) is to be revamped to make them more attractive to investors

Andrew DonaldsonThe legislative framework for industrial development zones (IDZs) is to be revamped to make them more attractive to investors, a Treasury official announced in Parliament yesterday.

So far IDZs have not attracted the investments hoped for — a shortcoming the government plans to address by offering more incentives so that they can make a greater contribution to economic growth.

The Department of Trade and Industry is also looking to expand the number of zones, with possibly one at Saldanha Bay .

Treasury deputy director-general Andrew Donaldson told a joint meeting of Parliament’s finance and appropriations committees that the new incentives would be funded out of the R25bn that had been set aside over the next six years to boost the competitiveness of enterprises.

The aim will be to attract labour- intensive industries and services that have the potential "to export, join global supply chains and become competitive logistic hubs", according to the mini-budget tabled in Parliament this week .

Mr Donaldson said the government had invested a lot in IDZ infrastructure. "We have built a new port and there has been an expansion of the industrial estate in East London but these investments have not gained anything like the kind of impetus that is needed.

"What is under consideration is whether we need to supplement the state’s financing of the infrastructure — which is the main investment that government is making in these facilities — with other incentives.

"In many other countries there are a range of other kinds of incentives for business investment, for training and wages and sometimes in the form of preferential tax and custom arrangements and other adjustments to regulatory environment.

"In many countries IDZs have a strong export focus and I think what will emerge out of (the department’s) review of its IDZs is that there will be some areas with export potential which require new incentives," he said.

"What we have also been advised is that one should not take a one-size- fits-all approach to the development of concentrated industrial development areas.

"What makes sense for Coega will be different from what makes sense and offers growth potential in Richards Bay or the inland transport hubs at the major airports."
The law governing industrial development zones was 10 years old and needed reviewing, he said.

Democratic Alliance spokesman on trade and industry Tim Harris welcomed any strengthening of IDZ incentives which had not been attractive enough. These should include regulatory relief and the relaxation of labour laws.

Given the strong opposition by the Congress of South African Trade Unions to any inroads into wages and working conditions, it was improbable the government would do so.

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