Officials say the Coega industrial development zone has a 'project pipeline' of R8bn which had the potential to create 7000 operational and construction jobs
The Coega industrial development zone (IDZ) had a 'project pipeline' of R8bn which had the potential to create 7000 operational and construction jobs if they came to fruition, officials said yesterday.
Coega, situated in the Eastern Cape, is an industrial development complex, adjacent to deep water port Ngqura.
The investment pipeline covers a wide range of sectors including metals (R7bn), chemicals, automotive and logistics.
A number of 'transformational' projects which would push Coega onto a higher growth path had also been identified, Parliament’s two trade and industry committees heard during a discussion on the performance of industrial development zones and their readiness to implement the government’s new special economic zones policy.
Coega Development Corporation CEO Pepi Silinga said these key projects included PetroSA’s Project Mthombo oil refinery, a ship repair yard, a transshipment hub, a gas power station and manganese smelters.
Coega has already conducted international roadshows about a possible gas power station, which Mr Silinga said had elicited interest from operators in the Middle East and Russia’s Gazprom as well as from some South African companies. He estimated the investment required to be anything "north of R90bn".
Mozambique’s gas fields could provide the gas for the proposed power station, which would provide energy to the IDZ itself.
Coega has 21 operating investors which have invested R1,24bn in the metals, agroprocessing, manufacturing, renewable energy and services sectors and created 3208 operational direct jobs and over 40000 construction jobs.
The East London industrial zone has attracted R3,7bn in investments by 30 investors.
Among the constraints to better performance identified in the Coega submission were the need for consistent multiyear funding to provide certainty, the need for policy alignment and for more competitive incentives, and the ability to raise its own funds.
Tumelo Chipfupa, the Department of Trade and Industry’s deputy director-general of The Enterprise Organisation, said the IDZ programme could have achieved more and the special economic zone policy was intended to address its failings.
The department and the Treasury were discussing possible incentive schemes. The allocation of funds through the medium-term expenditure framework "has proved inflexible and unresponsive to the rapid response by IDZ operators to investor needs", he said. There was no mechanism to cover the cost of new projects.
Mr Chipfupa said that between 2002-03 and 2011-12 the government had spent R7,6bn on the three functioning industrial development zones, Coega, East London and Richards Bay. The department had provided R5,4bn and provincial governments R2,1bn.