Coega to administer Africa’s first automotive city for Tshwane

The new Tshwane Automotive City, the future R500 billion destination for the auto industry, is to be administered by the Coega Development Corporation (CDC) from Port Elizabeth.

The CDC has international ISO-certified systems and processes in place that will play a part in the delivery of the project on time, and within budget, said CDC spokesman Ayanda Vilakazi when announcing the appointment recently.

Reinforcing city’s connections with motor industry

Centred on the Tshwane Automotive Special Economic Zone (TASEZ), to be established outside the city of Tshwane, the new automotive urban development will reinforce the city’s already strong connections with the motor industry which includes assembly plants and specialised suppliers for the OEM market. Work on the first 81ha phase is already underway.

Keen interest from Ford supplier companies

An early adopter of the project has been the Ford Motor Company which concluded the private/public partnership after lengthy discussions with the government ended successfully late in 2019.

The company already has nine Ford supplier companies that have expressed interest in moving into the new zone. 

Sustainable, competitive motoring environment

Building on to the already extensive manufacturing and OEM hub in the city, the new auto city will offer participants the benefits of increased economies of scale that reduce the cost of doing business and are essential for creating a sustainable, competitive motoring environment. 

Added to the package within the special economic zone (SEZ) will be government incentives, additional investor support packages and the services that are to be expected within a state-of-the-art automotive zone.

Tax incentives will include a 15% corporate tax, a building tax allowance, an employment tax incentive, and accelerated tax allowance programme.

Companies wishing to relocate to the economic zone will be able to access  APDP benefits on offer through the Department of Trade and Industry (dti) that will include up to 30% in grants for investments made in production equipment designed to enhance outputs. 

Investor support mechanisms

Investor support mechanisms will include a mix of funding instruments, public-private partnership arrangements and funding support from the Industrial Development Corporation.

Speaking about the development, Department of Trade and Industry chief director of special economic zones Maoto Molefane said the SEZ programme is a vital tool in government’s bid to attract both foreign and local investments into the country. 

“The proposed zone will contribute significantly towards Gauteng’s reindustrialisation plan and building of Gauteng as a city region.  The automotive hub will be developed through a joint partnership between the City of Tshwane, Gauteng provincial government and the dti.”

Potential to create 20 000 jobs

As the proposed economic zone goes forward, it has the potential to create at least 1 786 permanent operational jobs, a figure that could grow to 20 000 jobs when fully occupied by mainstream corporations and companies from the SMME sector.

As the largest manufacturing sector in the country, the South African motor industry’s vehicle and component operations accounted for  27.6% of the country’s manufacturing output last year. Contribution by the broader contribution to GDP was 6.4%.