Special Economic Zone brings benefits which include tax breaks and employment incentives
Bringing with it a range of new incentives and benefits, South Africa’s first and largest Industrial Development Zone, the Coega IDZ, is poised to officially convert to a Special Economic Zone (SEZ).
This was confirmed by the Coega Development Corporation, which has already begun referring to the site as an SEZ.
It confirmed the imminent new status of the zone when it announced yesterday that nine SMME’s had been awarded R30-million worth of contracts there.
It said the new status would become official as soon as it was ratified by the Department of Trade and Industry.
The department defines SEZs as geographically designated areas of a country which are set aside for specifically targeted economic activities, supported through special arrangements (that may include laws) and systems that are often different from those that apply in the rest of the country.
The department is expected to provide a number of incentives towards ensuring the growth of SEZs, revenue generation, the creation of jobs, the attraction of foreign direct investment and international competitiveness.
The incentives that tenants are expected to access include a preferential corporate tax rate, a building allowance, employment incentives and access to an allowance.
Commenting on its R30-million investment into the nine SMMEs, Coega Development Corporation spokesman Dr Ayanda Vilakazi said: “As an empowerment-driven organisation, the CDC is conscious of the important role that the small business sector plays in unlocking economic growth in Nelson Mandela Bay and South Africa.
“Our dedicated SMME unit was specifically established to support [smaller contractors] in line with our vision to be a catalyst for championing of the socioeconomic development.”
He said the contracts given to small contractors from the Bay had been awarded over 12 months and included three projects that involved CCA Fencing, MM Engineering and a custom control area – building in Zone 1 of the SEZ.
“The construction work on these projects includes brickwork, electrical, structural steel, civil works and landscaping, among others,” Vilakazi said.
“CCA Fencing sees the replacement of fencing, which entails the removal of 11km of palisade fencing and its replacement with a more secure and durable system, due to be completed [next month].
“More than R2-million of the project costs has been awarded to SMMEs – Magma Civil Engineering Contractors, Construction Solutions and Ngingi Construction.
“The project [includes] 36% SMME participation.”
He also announced the construction of South Africa’s first factory to manufacture liquid petroleum gas cylinders for MM Engineering at the SEZ as another major boost for small contractors, with contracts worth R22 246 847 allocated to them.
“When it is running at full capacity, MM Engineering will produce 3 200 metal gas cylinders a day,” he said.
“This is one of the first plants of its type in Africa.
“It will serve the local market, as well as countries within the Southern African Development Community and international markets.”
He said the three projects had created more than 171 jobs for Bay people.