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Coega investment pledges worth R790m on hold

The offices of the Coega Development Corporation, which has implemented a range of operational measures to ensure businesses in the special economic zone can continue operating despite the pandemic
UNCERTAIN TIMES: The offices of the Coega Development Corporation, which has implemented a range of operational measures to ensure businesses in the special economic zone can continue operating despite the pandemic

Companies behind 12 investment pledges worth a combined R790m have adopted a “wait and see approach” before setting up shop inside Coega’s special economic zone (SEZ) as a result of  the Covid-19 pandemic.

This is according to Coega spokesperson Simlindele Manqina, who said the sectors affected included agro-processing, aquaculture, logistics, automotive and pharmaceuticals.

“They have indicated that they will inform us in due course on the way forward.

"We are taking an optimistic and positive view since none of them have indicated to be withdrawing at this stage,” he said.

Manqina said none of the businesses already operational inside Coega’s SEZ had closed permanently.

“However, as both domestic and foreign direct investment destinations, special economic zones are not exempted from the carnage that has affected many businesses.

“Operators have found the going to be very tough.

"This is attributed to many investors in the SEZ operating at below capacity and others not operating at all during the national lockdown, putting serious strain on the financial sustainability of the organisation.

He said Coega had been faced with a “double-edged sword” during the different alert levels of the lockdown.

“On the one hand, the need to provide essential services to some of the investors located in the SEZ, with others having little to non-existing economic activity.

“On the other hand, struggling to reduce the cost of operations during the lockdown period and faced with, at some point, no rental income from some of the investors, poses a challenge on the cash flow for the organisation.”

He said businesses were faced with difficult decisions on whether to continue as before or effect drastic measures to change their trajectory.

“The worst is still yet to come regarding the pandemic, the experts say," Manqina said.

“However, we remain resolute that if we work together, supported by our stakeholders, to implement the stringent measures required to survive during this difficult time, there is a chance that we could achieve our business objectives."

He said foreign investors were watching from a distance how African countries responded to Covid-19.

“Investors are looking for markets that will ease disruptions in their production chains, [be] swift to implement measures to stimulate economic recovery and growth and provide policy certainty amid a global challenge.

He said Coega had implemented a number of operational measures to ensure business continuity.

These included:

  • Extending Coega’s health and safety wellness clinic services to include the testing for the pandemic by qualified physicians;
  • Compulsory screening at all entry points using hand-held devices and measuring temperature using non-touch forehead temperature thermometers;
  • Stringent security measures at access points in the SEZ, including checking driver and vehicle licences and required permits as per the published regulations and screening processes;
  • Signage and information material for Covid-19 had been posted in the various foyers, on all floors and entrances, in all boardrooms, and on a dedicated Covid-19 online portal to raise awareness:
  • Placement of safety health environment representatives throughout the organisation to monitor the implementation of Covid-19 protocols and ensure compliance with the published regulations;
  • Frequent cleaning of common areas such as lifts, door handles, lavatories and other facilities;
  • Making sanitiser available at all Coega’s office entry points, boardrooms, ablution facilities, reception areas; and
  • Supplying staff with personal protective equipment.

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