The Portfolio Committee on Trade and Industry today expressed concern about the sustainability of the Industrial Development Zones (IDZs), given the financial model in which national government funds capital infrastructure, provinces provide operational expenditure and local government contributes bulk infrastructure.
Committee Chairperson Ms Joanmariae Fubbs said that, over time, IDZs are expected to become more financially independent as their investment pipelines are realised.
“Part of their viability is often hindered by provinces withdrawing resources from these IDZs too soon, leaving IDZs cash-strapped,” Ms Fubbs said. She further stated that there has not been an appropriate balancing exercise done in terms of support available from provincial governments. In addition, the wage bill may be overextended by large executive packages, given the current environment of economic and fiscal constraints.
Her comments come after media reports that East London IDZ has run out of money.
“This situation is often compounded by a low rate of realising the investment pipeline, which requires a holistic approach and closer coordination among government departments to deliver critical services and infrastructure timeously. This inter- and intra-governmental cooperation and coordination is essential to ensuring the sustainability of IDZs and lessons learnt will go a long way to ensure the sustainability of future special economic zones,” Ms Fubbs said.
ISSUED BY PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY, MS JOANMARIAE FUBBS
Source : Parliament of South Africa