Tag Archive | SEZs

DTI claims new SEZ investment incentives are better

In launching it’s new Special Economic Zone (SEZ) plan, the department of trade and industry (DTI) has admitted to Parliament that a lack of specific attractive incentives did not lure investors to the various IDZs in South Africa in the manner intended accompanied by somewhat “ad hoc” funding arrangements with national treasury.

There was also insufficient marketing and a lack of stakeholder co-ordination, DTI has said.

Lionel October, director general of DTI and his team were asked to present to Parliament on the readiness of the new Special Economic Zones (SEZs) which are planned to substitute as a new investment drive and how the existing IDZs would be incorporated into the new plan.

In retrospect, October explained to parliamentarians, DTI had found that it’s officials  had often been provided with insufficient or untimely oversight of individual strategic plans and operations of the IDZs themselves had found the regulatory framework provided by DTI for the operation of IDZs insufficient to guide long-term planning and coordinate plans in order to integrate into other national, provincial and regional strategies.

Between the years 2002 to 2012, the government of South Africa has expended a total of R7,6bn to the three functioning IDZs on the East coast, R5,4 billion(76%) of this coming from the DTI’s budget and R 1,7bn from the host provincial governments.

Meanwhile, over the eight years of its operation, the current plan has attracted a total of 44 investors who DTI claimed have invested some R12.3bn, creating they say some 38,000 direct and indirect jobs.

Lionel October told parliamentarians that DTI now planned a “one stop shop model for investors where bureaucratic red tape will be reduced”; that the IDZs would be incorporated and integrated with SEZs with the assistance of experts identifying weaknesses in the previous systems and that DTI was developing a marketing strategy for the integrated result.

Tumelo Chipfupa, DTI’s deputy director-general, told the parliamentary committee that DTI admits that the three IDZs (Coega, East London and Richards Bay) should have achieved better results and a lot more had been hoped for but the result of under-achievement had resulted mainly because “the funding model did not cater for the dynamics needed by investors and the fact that allocation of funds had been inconsistent and inflexible”.

Posted in Finance, economic, Land,Agriculture, Public utilities, Trade & Industry, Uncategorized0 Comments

No labour dispensation for SEZs, says DTI

In a media release, the director-general of the department of trade and industry (DTI), Lionel October said labour laws will not be relaxed in the new arrangements for accelerating industrial development through special economic zones.

He was addressing organised labour at the Special Economic Zones Bill public hearings held by the department in Pretoria, yesterday.

Whilst government needs the full support from organised labour and business for the proposed special economic zones to work effectively, he said, “It is not in our best interests to deregulate labour laws in order to attract foreign investors and therefore exploit our workers.”

The timing of the remark would appear that pressure has come from organised labour to say something to the working force as a result of the introduction by President Zuma of special economic zones (SEZs) and their introduction into Parliament by October and the DTI.

October also said in his media release that government needs a regulated labour market to remain competitive and raise living standards for workers.

He went on to say, “The model of special economic zones that the government is pursuing shifts away from competing on the basis of cheap labour to competing on the basis of the quality of services and support measures provided in the zones and their host regions.”

DTI concluded that the challenge as they see it is to develop a comprehensive package of support measures that will be adequate to “attract desired investments but also assist the country to master the desired industrial capabilities”.

Public hearings are shortly to take place members involving the public, organised labour and business the SEZ Bill and government’s policy in this regard. The stated purpose of the Bill being to “accelerate of industrial development and create jobs through the creation of new industrial hubs in under-developed areas and industrial decentralisation from traditional zones by building targeted areas.”

The Bill, gazetted by the minister of trade and industry Dr Rob Davies last month, will be tabled once public hearings conducted by the DTI have taken place

Posted in Finance, economic, Justice, constitutional, Labour, Land,Agriculture, Mining, beneficiation, Public utilities, Trade & Industry, Uncategorized0 Comments


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