COEGA DEVELOPMENT CORPORATION PRESENTATION TO SELECT COMMITEE ON TRADE AND INTERNATIONAL RELATIONS 23/05/2012

AGENDA Progress made since inception Funding Challenges Readiness to implement the SEZs.

Progress made since Inception Functions of Economic Zone Operator

Synopsis 1998:Coega Industrial Development Zone Development Framework Plan completed. –Ngqura Port Act enacted. 1999: Coega Development Corporation incorporated 2000: First four (4) IDZs proclaimed: –Coega, Johannesburg International Airport, Richards Bay and East London 2000: Environmental authorisation for IDZ and Port approved 2002: Provisional IDZ Operator’s permit granted to Coega –Draft National Ports Bill –Port of Ngqura Proclaimed –Commencement of infrastructure 2005/6: First tenant in the CIDZ

Progress 21 operating investors R1.24bn in private sector investments in -Metals -Agro-processing -Manufacturing -Renewable Energy & -Services sectors 3208 operational direct jobs indirect and induced rural jobs (from agro-processing) Over construction jobs

DYNAMIC COMMODITIES

Cape Concentrate

INVESTMENTS SECTORVALUE DIRECT EMPLOYMENT INDIRECT EMPLOYMENT ChemicalsR3.3 billion LogisticsR85 million Auto componentsR694 million Alternative energyR2 billion50350 BPOR31 million12048 Oil RefineryR76 billion Downstream metals (Iron and Steel) R75 million Food & Beverage IndustriesR100 million ManufacturingR50 million5040 TotalR82,335billion

BPO & SKILL CENTRE

Transformational Projects Oil refinery – Project Mthombo Ship Repair Yard Transshipment Hub Gas Terminal CCGT Seawater Intake Manganese Smelters Return Effluent – pre-feasibility study funded by DEDEAT Sishen / PE Rail Upgrade

Funding Functions of Economic Zone Operator

Challenges Functions of Economic Zone Operator

Readiness to Implement the SEZ Bill Functions of Economic Zone Operator

Develop and implement a strategic plan within framework of SEZ strategy. Make improvements to the SEZ. Provide or facilitate the provision of infrastructure and other services required.

Functions of Economic Zone Operator Provide adequate enclosures to segregate the zone from any customs area. Provide adequate security on the site including offices and facilities of the zone.

Functions of Economic Zone Operator Adopt rules and regulations for business within the zone in order to promote its safe and efficient operation. Maintain adequate and proper accounts and other records in relation to its business as per applicable legislation. Promote the relevant SEZ as a foreign and domestic direct investment destination. Undertake any other activity within the scope of the SEZ act.

Functions of Economic Zone Operator Facilitate a single window clearance facility that delivers required government services to with minimum red tape.

Comments on the SEZ Bill Quorum Requirement; government role is key. SEZ Fund to not be a major constraint; mechanism to ensure funding equity. Highlighting of the need for incentives; formation of a board sub committee on investments Reporting arrangement sill not clear enough; reporting to owner and the SEZ board only. SEZ permit holding company required to only operate an SEZ; requirement of grandfather clause to ensure continuity. Review of existing IDZ’s to ensure that they are positioned correctly after formation of differing classes of SEZ’s.

Coega Readiness Ascertain status of CDC as permit holder: – Considering that the CDC has several business lines outside of the Coega IDZ. – Could result in the unbundling of the CDC. Work with DTI on formation of SEZ board. – Identification of subcommittees. – Identification of classes of SEZs Evaluation of CIDZ as an SEZ (type?)

THANK YOU