The inadequate design and delivery of effective enabling policy instruments was hampering the incentives for South Africa’s industrial development zone (IDZ) programme, East London Industrial Development Zone (ELIDZ) CEO Simphiwe Kondlo said.

He indicated in a statement on Thursday that there were currently no IDZ-specific incentives, besides the Customs Controlled Area benefit, which had still not been implemented, owing to policy and operational issues between the various government stakeholders.

“There is a lot of criticism on the slow take-off of the current IDZs and, while the criticism is valid, it is important to note that very few IDZs globally have had to operate without incentives and an enabling legislative framework.

“By creating the necessary policies, setting in place proper legislative parameters, defining the required resources and garnering the support of parastatals and delivery agencies, government will have established the undiluted legitimacy of IDZs that is required to make us competitive,” Kondlo stated.

He further said the ELIDZ was hopeful that current discussions being led by the Department of Trade and Industry, which were geared towards improving the legislative framework of special economic zones (SEZs) within which the IDZs were categorised, would assist in increasing the competitiveness of the IDZs and accelerate the pace of attracting investment.

Kondlo added that the proposed SEZ Bill was the first attempt at establishing a legislative framework that goes beyond the tenuous association with the Manufacturing Development Act. The proposed legislation recognised the need for export-oriented zones that were linked to a port, as well as for inland zones.

ELIDZ, which was one of the first IDZs in South Africa and celebrated ten years of existance this year, had attracted R3.7-billion in investments since it secured its first investor in 2005. To date, 30 investors have been secured with 21 of these currently operational in the zone.

“To date, we have awarded R928-million worth of contracts to broad-based black economic-empowerment enterprises and R281-million worth of contracts to qualifying small, medium-sized and micro enterprises. We have transacted with more than 200 local companies since inception and, for us, this indicates the extent to which we have extended our reach as a government entity,” Kondlo asserted.