POTENTIAL investors have been given a major boost by the Nelson Mandela Bay Municipality, which has offered discounted rates, electricity and services for companies that bring new investments to the metro.
The municipality's relatively new investment incentive policy means new or expanding businesses could also benefit from rental subsidies, or a discounted rate for the use of municipal land and buildings.
The incentives were announced by mayor Zanoxolo Wayile, who handed over a R1-million cheque to the Discovery Health Port Elizabeth office yesterday to reward the company for investing in the city and creating 336 jobs.
Discovery was subjected to a strict criteria evaluation, which meant it had to have created a minimum of 50 jobs and brought capital investment of at least R10-million to the Bay.
The company will receive an additional R2-million over the next two years.
Discovery Holdings executive director Dr Ayanda Ntsaluba said it hopedto use the money for staff training and other ventures in partnership with the municipality.
Wayile hailed the investment, saying it was a shining example of what could be achieved when government and the private sector worked together towards the same objective.
"In spite of the many challenges that continue to confront us, government has the responsibility to create an enabling environment for business to thrive, while the private sector is expected to help create jobs.
"This means that there needs to be a strong partnership between government and the private sector when dealing with unemployment challenges. In seeking to regulate such partnerships, the municipality adopted an incentives policy. The policy focuses specifically on attracting additional investments from new and existing investors by offering predetermined incentives."
Wayile said investment incentives were mainly aimed at lowering the costs of setting up business in the Bay, thus creating an attractive trade and investment environment.
"The incentives form part of a larger package of investment tools which are used by the municipality to positively influence the local economy, and to generate and enhance municipal revenue," he said.
Some of the other incentives include:
- Joint funding of feasibility studies and business plan development;
- A rebate on municipal building plan approval costs for approved investments; and
- Skills development and training to employees of new investments.
The metro's trade and investment director, Anele Qaba, said after studying the municipality's budget, the maximum discount they could offer on rates, electricity and services was R1-million.
"The discount depends on the multitude of investments brought to the metro. But we have capped the discount at R1-million," he said.
The incentives were aimed specifically at new investors and established businesses looking to expand. "Any expansion is considered as part of reinvestments because it would mean there are new jobs created," Qaba said.
The municipality's budget for incentives for the 2012-13 financial year is R5-million.
Coega Development Corporation business development manager Christopher Mashigo said there were a number of investment projects in the pipeline that would be based at the industrial development zone.
"We should see the FAW truck assembly plant coming up soon, and there is something in the food and beverage sector that is in the pipeline, which we can't mention just yet," he said.
"Not far from that site is another food and beverage investment in the pipeline."
Nelson Mandela Bay Business Chamber chief executive Kevin Hustler lauded the investment incentives.
"We welcome Discovery Health's investment in the city and hope that the awarding of the incentive by the municipality will encourage further investment into Nelson Mandela Bay.
"Such incentives, together with available and quality infrastructure and basic services, are an essential factor in securing investment in this highly competitive environment," he said.
Meanwhile, asked whether or not he was concerned that the political instability in the city would chase away potential investors, Wayile said the "dust has settled".
"We have been interfacing with leaders of different formations to bring normality back to the region, and the dust is settling – although not firmly settled yet.
"Investors must not worry, the environment is conducive for investors. We urge them not to run away," Wayile said.
"There has never been political infighting, just a difference in opinions and perspectives.
"Sometimes how we handle ourselves and situations leads to conflict. There were, at times, tough stands that were affecting the metro, but there are no problems without solutions.
"Politically, we recognise that the social needs are greater than our narrow disagreements; we recognise that we must put the interests of our people and nation first," he said.
The Bay has been crippled by political infighting in the ANC for more than a year.
The volatile rift prompted organised business to call for a speedy resolution to the internal strife because it was driving away investors.
The two leaders at the helm of the spat, ANC regional boss Nceba Faku and Wayile, have since called a truce.