New special zones plan

South Africa might have, in hindsight, spent too much time chasing anchor tenants for its industrial development zones instead of ensuring that well-serviced land was available at attractive rates.

Former trade and industry minister Alec Erwin yesterday said the main reason for the establishment of the industrial development zones in 2000 was to encourage the use of deep-water ports.

"We wanted to use our deep-water ports as anchors for spatial development initiatives. That is why we did not opt for free trade zones or special economic zones , which were also under consideration," he said.

But South Africa's major trading partners in Europe, the US, Latin America, India and China have been using special trade zones as policy instruments to attract investment, stimulate exports and create employment for decades.

China has a large number of trade zones that can be categorised into special economic zones, enterprise zones and industrial or commercial free zones.

The South African government is now hoping that the new special economic zones policy will create the framework for the development of industrial nodes outside the traditional industrial heartlands of Gauteng, Western Cape and KwaZulu-Natal, while improving the performance of the existing industrial development zones.

Under the proposed legislation, municipal and provincial authorities, and even public-private partnerships, can approach the government with plans to develop special economic zones in which the concentration of industrial infrastructure could improve prospects for investment, growth and job creation.

The proposed law is also aimed at improving the funding, governance and operational performance of the four existing industrial development zones, as well as of future special development zones. A special development zone board has been proposed to oversee zone designation and the granting of permits, and to manage a fund for the new special economic zones.

The difference between industrial development zones and special economic zones is that the latter can be set up in areas not intimately associated with a sea port or airport.

Not a single South African cabinet member was present on June 30 2004 when the valve was "cracked" and sea water started flowing into the massive dry basin that eventually formed the Port of Ngqura at the Coega industrial zone, the largest public-sector project in South Africa in the past few decades.