Leonard Neill
INDUSTRIAL DEVELOPMENT Zones (IDZs) in South Africa have been given the official green light by the department of trade and industry in a statement issued this week. The aim is to attract investment by cutting through the normal bureaucracy and give manufacturers greater access to the country's major trading partners and markets.
Each IDZ will offer duty-free production with a customs-secured area. Enterprises setting up in a zone will be able to draw on new incentive packages that consist of cash grants, a skills support programme and a critical infrastructure fund in which government will grant subsidies up to 30% in training and development by private investors.
Coastal locations have already been identified in Durban, East London, Richards Bay, Coega near Port Elizabeth, Saldanha Bay and inland sites at Johannesburg International Airport and City Deep dry port.
Government plans to license operators to develop and run the IDZs to provide enterprise support measures, to minimise red tape and to provide efficient services to enterprises, says the department's Edwin Smith.
Enterprises based in an IDZ will enjoy duty-free import of production-related raw materials and inputs, a zero rate on VAT for supplies procured from South Africa, and the right to sell into South Africa by paying normal import duties on finished goods.
At present the two Gauteng inland 'ports' and the East London IDZ are the most advanced in preparations for development, with East London Development Zone Corporation chief executive Peter Miles
having now applied for an official licence to operate.
We are up and running, but certain details will only be known when all the stakeholders throughout the country get together with the minister of trade and industry in Pretoria on February 5, he says.
The government's financial incentive is still pegged at the R100 million mark, which is aimed mainly at the small and medium-sized enterprises, and we are hoping this ceiling will be lifted early next year to enable us to encourage larger business to take up space with us.
But the good news is that the programme is now live and we can start 2001 with a progressive outlook towards developing our operations.
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