Trade and Industry Minister Dr Rob Davies on Monday opened a 60-day public consultation period for the designation of an industrial development zone (IDZ) at Saldanha Bay, in the Western Cape.
The project had been driven primarily by the Western Cape Investment and Trade Promotion Agency, Wesgro, which had carried out the feasibility study for the Saldanha Bay IDZ (SBIDZ) and presented the business model to the Department of Trade and Industry (DTI) in September 2012.
The DTI developed an evaluation report that was presented to the Manufacturing Development Board, which had endorsed the gazetting of the proposal, Davies said at a media briefing in Saldanha Bay.
“We are very excited about this. The work that has been done: the feasibility, pre-feasibility valuation report all tell us there are significant opportunities for an IDZ in this particular area,” he said.
The proposed SBIDZ would be an oil and gas and marine repair engineering and logistics services complex.
With the area being well situated in relation to the fast-growing oil and gas industry in West Africa, the intention would be to provide the exploration and production service companies operating in the oil and gas fields in sub-Saharan Africa with logistics, repairs, maintenance, and fabrication services.
The official IDZ designation would mean that the SBIDZ would be able to offer a customs-free area, which would act as a strong attraction for foreign investment.
Wesgro CEO Nils Flaatten pointed out that the sudden growth of the oil and gas industry in Africa meant that Wesgro had needed to move the SBIDZ process quickly forward.
“Should we delay in this process in the short-to-medium term it means the services that we can offer as South Africa will begin to be delivered by other countries around us. So speed and time were of the essence,” he said.
The Wesgro business plan proposed that the revenue potential of the SBIDZ could reach over R7.9-billion a year within five years. Up to 11 rig repair projects could potentially be undertaken each year accounting for a yearly revenue of R3.4-billion, with fabrication of products used in the offshore oil and gas industry generating a further R2.3-billion. Activities supporting the fabrication and rig repair activities could yield up to R2.4-billion each year.
The IDZ would contribute R3.4-billion to the the country’s gross domestic product (GDP) within the first year and could add R11-billion to GDP after 20 years.
Significant for Saldanha Bay would be the employment potential should the designation be received. Davies said the proposal suggested that in a worst-case scenario, the project would create 4 240 direct jobs over a 25-year period, accounting for 16% of the labour force in the area, and a total of 11 975 direct, indirect and induced jobs. However, the best-case scenario proposed 8 930 direct jobs and a total of 29 020 direct, indirect and induced jobs would be created over a 25-year period.
Saldanha Bay executive mayor Francois Schippers said that the general concept of an IDZ in the area had been discussed since as early as 1988 and the opportunity had now arisen for the project to become reality.
“The industrial development project in Saldanha Bay municipality is truly a non-partisan project. No matter which political party was in control of the municipality there has always been consensus that the establishment of the IDZ is in the interest of the municipal, district, provincial and national community,” said Schippers.
He added that the collaboration that had taken place between all spheres of government, as well as State-owned enterprises in working towards establishing the IDZ had been a shining example of how cooperative governance should be put into practice.
According to Davies, an information workshop would also be held in Saldanha Bay on November 30 to facilitate the community’s involvement in the public participation process.
“Assuming that the [consultation process] leads to the high level of consensus that we assume it will, then the subsequent processes should not be too long delayed and we look forward to perhaps coming here sometime in the new year to actually launch the establishment of the industrial development zone in Saldanha,” said Davies.