Trade and Industry Minister Dr Rob Davies has issued, for public comment, the application for the designation of an industrial development zone (IDZ) at Tshiame, in Harrismith, in the Free State, as well as the granting of an operator’s permit for an IDZ.

The Department of Trade and Industry (DTI) outlined in the Government Gazette of July 10 that the vision for the Tshiame IDZ (TIDZ) was the creation of a functional, self-sustaining industrial entity that would eventually develop into the envisaged Maluti-A-Phofung special economic zone – intended to strengthen the logistics and transport corridor between South Africa’s main industrial hub in Gauteng and the Port of Durban.

The value proposition of the TIDZ was to provide a competitive and highly efficient industrial mixed-sector entity that positioned itself as the leading location for its targeted sector activities along government’s strategic infrastructure project 2 corridor, in response to investor demand.

This would be achieved through the provision of infrastructure support, a competitive and transparent market environment and an efficient response to investors' market requirements.

Elaborating on the strategic objectives of the TIDZ, the DTI stated that the zone would initially focus on the establishment of a single cluster within the IDZ, such as an automotive and retail garment cluster, while providing supporting infrastructure that “differentiated” the cluster from its competitors.

It would be a multisector processing, manufacturing, engineering, logistics services, transport and logistics complex, serving the needs of the upstream value-adding, beneficiation, processing and production service companies operating across sectors and geographical areas in Southern Africa.

The zone would further look to provide efficient IDZ and customs-controlled area operations and processes that “facilitated timeous and cost-effective operations for international and domestic investors”.

“The aim of the TIDZ is to group different technologies, services and service providers for various customers in the selected target sectors of the economy to achieve synergies and the optimisation of processes through economies of scale, thereby helping to contribute to the long-term survival of the Eastern Free State region and the selected target sectors of the economy,” the DTI outlined.

Outlining the timeline for development, the department aimed to have signed agreements between the Free State Development Corporation (FDC) – the zone’s “implementing vehicle” – and at least two first-mover interested parties for space and services for three-, five- and eight-year periods by June.

It further intended to have signed agreements with four of the top ten suppliers, service providers and role-players of selected sectors by September.

“By November, [we also want to secure] agreements with all essential services providers required to provide logistical and ancillary services, while continuously signing agreements with any other interested tenants that
approach the FDC for space, but do not fall within the primary target
group for the first 18 months of the development,” the DTI noted.

Estimated capital expenditure for the first phase of the development, which would involve the construction of utility services, perimeter fencing, gatehouses, roads and other infrastructure, was R168-million.

A further R149.2-million had been earmarked for the development of a general distribution centre, R153.7-million for the development of a vehicle distribution centre, R167.3-million for the construction of a food processing and fresh produce hub and R85-million for other construction projects within the zone.

The projected income over the project lifetime of 20 years was R2.64-billion.