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Transport-focused Aerotropolis aims to catalyse economic growth in east Gauteng

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Transport-focused Aerotropolis aims to catalyse economic growth in east Gauteng

22nd January 2016

By: Schalk Burger
Creamer Media Contributing Editor

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The so-called Aerotropolis development taking shape in the east of Gauteng is seeking to more fully leverage the giant OR Tambo International Airport and related road and rail transport links to further stimulate economic and business development in the region.

The project aims to grow a functional economy through the strategic use of road, air and development of available land to enable mobility, densify the municipality and integrate the nine towns, 17 townships and well-established industrial areas, says Ekurhuleni metropolitan municipality executive mayor Mondli Gungubele.

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“This project is a recognition of the important role of civil aviation in the economy and the development of Gauteng,” says Department of Transport director-general Pule Selepe.

“The core principles include developing a sustainable aviation industry, promoting tourism and trade and improving regional and international cooperation. Further, the strategic objectives include growing the air transport sector to stimulate growth, aid job creation and promote and maintain an enabling framework for businesses and travellers.”

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Notably, the airport will invest R4.6-billion in developing its new Midfield terminal and facilities, and will spend R9-billion in maintenance and refurbishment over the next two years, highlights Selepe.

“Not only are airports central to the competitiveness of a region, but they also provide significant employment to local communities, while corporate facilities help to promote further investment in the area,” says Ekurhuleni City Planning head of department Motubatse Motubatse.

Nodes and Corridors
The Aerotropolis project consists of anchor nodes and corridors, which will leverage transport- orientated developments to provide a conducive environment for industries. The productive use of open spaces in the municipality, exploiting the agricultural potential of the area and promoting advanced manufacturing are also key focus areas, he notes.

The clusters of related industries, or hubs, around the airport provide incentives for local and international companies to locate their facilities and factories in these hubs. The clusters are also designed to provide industries and companies with the required utility, support and professional services within the area.

The clusters include logistics and distribution, education and skills training, biolife sciences, agribusiness and food processing, manufacturing and high technology, tourism and culture, retail, natural resources and energy, and professional services and public administration.

Further, 29 so-called catalytic projects have been concluded and mainly entailed establishing well-known and international companies within the various hubs to serve as anchor tenants or expert service providers, for example providing telecommunications services.

In the Plumbago business and logistics park, about 7 km north-east of the OR Tambo International Airport, global logistics and delivery company DHL has invested in two warehouses, including a 25 000 m2 DHL Supply Chain warehouse, and offices for its global forwarding and supply chain divisions, says DHL Supply Chain South Africa head Warren Brusse.

“The substantial investment is key for our business growth in the greater Johannesburg area. The park is well located, not just close for airfreight cargo operations to the airport, but also for local distribution to the greater Gauteng region. The development enabled us to consolidate two sites and leverage synergies to reduce costs,” he says.

Agriculture and forestry equipment company John Deere built a 20 000 m2 warehouse, with 6 500 m2 of adjacent land for potential expansion. Supporting sub-Saharan Africa’s future agricultural potential is part John Deere’s strategy. The investment confirms its commitment to growth in sub-Saharan Africa, including South Africa, says John Deere SA MD Len Brand.

Global fastener company Würth, local online retailer Takealot.com, fresh produce and foods company Fresh To Go, personal safety equipment manufacturer Jonsson and global logistics and freight company DB Schenker also established facilities in the park. A significant number of logistics, freight and transport companies and subsidiaries are also present in the Pomona area, about 2 km south of Plumbago, which forms part of the Pomona logistics hub.

The Aerotropolis project has received Special Economic Zone status from the Gauteng Industrial Development Zone provincial department, says Selepe. This enables the companies to benefit from lower corporate tax rates for a specific period, or receive other incentives.

The airport and supporting transportation systems will enable the easy movement of people, and thus skills, to and from the area, while companies providing supporting services, such as telecommunications and logistics services, have also been encouraged to establish premises within the hubs.

Aerospace and defence company Denel serves as the anchor company of the manufacturing and high technology hub in Bonaero Park, east of the airport. It has had a testing, avionics and office campus in the area for decades.

“Denel is developing suppliers of smaller components, which it will use to manufacture its aerospace systems. We cascade our accreditation to these suppliers and each can bid to supply us with aerospace components,” says Denel Aerostructures deputy CEO Victor Xaba.

The components are complex to manufacture and Denel believes that having a range of accredited suppliers will enable it to secure sufficient volumes of components, while the suppliers benefit from stable contracts that can underpin the growth of their businesses. The initiative also forms part of Denel’s Advanced Manufacturing Programme.

“Denel will focus on systems integration. We are not investing significant amounts in capital equipment, but we are offering incentives to suppliers that can co-locate within the hub. This offers the opportunity and an avenue for investments in advanced manufacturing in the hub,” he adds.

Denel is pursuing a 30-year growth plan, which aims to grow its presence within the global aero- space market and produce 40 to 80 Rooivalk attack helicopters over the next 40 years, mainly for the South African armed forces. It also aims to manufacture its small African regional aircraft for the African market. Denel regards these developments as creating significant work for smaller manufacturers, he highlights.

Dense Cluster
“The dense-cluster approach taken by the Aerotropolis is a framework to build new economic centres with these hubs. These are located in strategic positions and aim to enable the City of Ekurhuleni to crowd-in sunrise industries, services, manufacturing and transportation companies, and high-technology companies,” says Gungubele.

The region has good road interconnectivity to the energy clusters in Mpumalanga, including Secunda and eMalahleni, the eastern Free State, and the platinum- and coal-rich North West, as well as road links to Mozambique. Rail assets in the region were underused, but can also be leveraged, Selepe acknowledges.

Key concerns or obstacles identified include local road congestion, which would hamper both businesses and residents and potentially hamstring the project’s growth. However, the new PW 3, PW 15 and PW 17 freeways are being built to improve access across the eastern parts of Gauteng.

Selepe says the Aerotropolis project also provides an opportunity to develop an integrated transport system in Ekurhuleni, with seamless public transport for the airport and surrounding developments also determining the success of the project.

The Aerotropolis Master Plan, completed in October, thus far contains six regional spatial development frameworks contained within the metropolitan spatial development framework (MSDF).

“The MSDF was developed to accommodate and support the Gauteng City Region developments, Presidential Strategic Infrastructure Projects and the Gauteng Integrated Transport Master Plan. It is the overarching plan to drive the practical implementation and attract investment, as well as provide certainty and predictability to investors and developers,” says Motubatse.

The Aerotropolis plan is also aligned with the Ekurhuleni Growth and Development Strategy 2025. The municipality has produced a map of the proposed development sites, which are arranged in 5 km-, 10 km- and 15 km-zones around the airport, and has also mapped out the utility services available in these areas to support development planning, he adds.

The aim of the MSDF is to be a permanent feature of the Ekurhuleni municipality’s planning policy framework, emphasises Motubatse.

Further, the concept is designed to eventually improve the prospects of businesses across the region and not just close to the airport. For example, Tambo Springs, about 30 km south-east of the airport, will be developed into an intermodal inland port and manufacturing, agro- processing and cold chain park.

The Aerotropolis project will also be reviewed yearly, and business and industry are invited to continuously interrogate the roadmap to ensure that the project effectively presents opportunities for growth and development in concert with industry needs, avers Motubatse.

The goal of the project is to leverage the industrial capacity already present in the towns, and due consideration is also given to the demands of the various industries linked to the locations of the hubs.

Meanwhile, some of the areas are dolomitic and, while this does not necessarily prevent infrastructure development, the municipality has earmarked a large strip of land running east to west through the region – called the Main Reef corridor that includes most of the old mining sites – for development into green areas such as parks, sports fields and nature reserves. These green areas, where possible, will include many of the wetlands and sensitive watercourses in the region.

“We aim to develop a functional, liveable and competitive city. We cannot do this by making small plans. Therefore, the project was designed with the broadest inputs from business, government, experts and society possible. Further, there must be continuous dialogue among stakeholders. The Aerotropolis Master Plan is not an end in itself, but just the beginning of the project,” concludes Motubatse.

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