RDZ gets clean audit, but what about getting business, asks DA

2012-10-08 00:00

THE Richards Bay Industrial Development Zone announced last week that it had obtained an unqualified and clean audit for two years running.

The provincial entity said in a statement this achievement was significant as it was the only one out of “11 public entities that report to the Department of Economic Development and Tourism (DEDT) to receive such an opinion in the 2011 /2012 financial year cycle”.

Other provincial entities were Ithala Bank, Tourism KZN and Trade and Investment KZN. Most notably in September, Ithala Bank was found to have suffered material losses amounting to R270 million in its 2011/12 financial year, triple its losses from the previous year.

But in recent months the RBIDZ has come under increasing pressure from both within DEDT and opposition parties to deliver on its mandate. The RBIDZ was incorporated in April 2002. Development has been slow, hindered by a smaller allocation of funding compared to Coega IDZ in the Eastern Cape, political wrangling between the council and the corporation, land acquisition and restraints on the type of business it can attract due to the air quality in Richards Bay already being highly polluted by existing industries.

Democratic Alliance MPL Johann Krog said although it was good they achieved a clean audit, the RBIDZ was not giving back to the public purse.

“Currently the RBIDZ is not value for money. It is claiming to have created employment, but it has not, except through the construction phase and this is of no interest. The RBIDZ was set up to entice foreign investors,” said Krog.

According to the IDZ’s statement, for each potential investor that applies to the RBIDZ to set up a factory, numerous legal requirements need to be met, including the necessary environmental processes, before any construction can commence.

On average, an Environmental Impact Assessment (EIA) takes approximately 18 months to complete.

The RBIDZ said it has paid nearly R200 million to the uMhlathuze Municipality for land and bulk service upgrades to service the IDZ and has to date created 250 construction jobs developing the land known as 1A, which sits adjacent to the Port of Richards Bay. RBDIZ CEO Ike Nxedlana called the clean audit a “result of robust control of environment policies and procedures approved by the board and implemented by the RBIDZ staff”.

“[The clean audit] is a foundation for good governance in our endeavour to deliver on the mandate of the IDZ programme. The Richards Bay Industrial Development Zone is committed to ensuring that they play their role in helping to achieve government’s objectives of creating jobs and investments for our area,” said Nxedlana.

But Krog said that in order for the RBIDZ to work beyond the construction phase serious inducements must be offered such as tax breaks. “The problem Richards Bay specifically will have is that it already has so much industry. These industry players could ask why they are not being offered the benefits, if any, associated with the IDZ,” said Krog.

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