Grant Adlam
Grant Adlam



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kzn: The Evolution of KwaZulu-Natal - 2009 -Grant Adlam

2009-07-23

In 2009 the world celebrates the 200th birth anniversary of Charles Darwin and the 150th anniversary year of his seminal book, The Origin of Species.

Evolution is one of the most significant scientific theories of all time, and remains the basis for modern biology. Darwin's theory called "natural selection" was that through a process all organisms adapt and evolve or alternatively die out.

Competition for natural resources is one of the key factors of the evolutionary process. The world has experienced an unprecedented increase in population during the past century. Dramatic shifts in consumption of food have accompanied the population explosion provoking competition for food resources. The consequences have included a surge in grain production, a spectacular rise in meat production and consumption, and the emergence of an increasingly vital role for international trade. Agencies the world over are continually making decisions about how to invest in a future that will bring a healthy, sustainable diet to more people- or to fewer.

Similarly in modern day economics a variety of businesses compete endlessly in an environment or marketplace. This is subject to external forces like debt, population growth, fluctuating oil prices, and demand for new technologies such as microelectronic, computers, telecommunications, robotics and biotechnology. Ever evolving commodities including I-pods, mini note book computers, digital picture frames and blue ray discs dominate the 'must have' list of desirable objects. Not to mention the ever changing ways of social interacting varying from SMS's, e-mail, to Twitter and Facebook, all requiring human behavioural adaptations.

Research now indicates that the world is facing an unprecedented crisis on issues of global warming and climate change to which conditions it must also adapt its way of life.
Over the past century, the Earth has increased in temperature by about 0.5 degrees Celsius. Many scientists believe this was caused by an increase in concentration of the main greenhouse gases resulting from man's overproduction of these gases to meet the needs of modern living.

Currently the global economy has had a severe slowing down thrust upon it in the form of a globally depressed economy. Across the globe, change is apparent in the fluctuating demand for commodities such as oil, gas, and steel. As economies grow, the need for natural resources grows, and the prices of these resources rise. Conversely, as economies slow, the demand slows and prices go down, which has a negative impact on production, affecting industrial plants and creating closures and retrenchments, all with dire consequences for the local economies affected. The current global financial volatility has in part been created by 21st century banking systems caused by micromanagement of interests rates and currencies by central bankers in conjunction with fractional reserve lending and deficit spending everywhere (Mike Shedlock, 2009). Change is inevitable and is happening on a global scale as the world's banks and economies adapts to all these new circumstances. However, predictions are already in place that the worst is over recession wise and that growth should rebound, albeit slowly.

Economies are not only influenced by factors in the global market place but by political policies. Socialism, capitalism and communism have all made their mark on the world's economies. These policies have been subject to change and debate to cope with the ever shifting needs of society as well as the demands of integration into a global community.

All these factors as history has shown, will have influence over the path that mankind selects in this century. What is clear is that evolution has to happen for mankind to meet the challenges it faces in order to progress and grow. According to Andrew Sheng, Deputy Chief Executive, Hong Kong Monetary Authority, "The challenge of the 21st century is to promote shared growth, to prevent future crisis and to design a new international financial architecture that promotes resilient financial systems, efficient global resource allocation and a level playing field" (1998). Interestingly it has taken more than a decade for global decision makers to take finally note of the many challenges that confront them.

In the South Africa Context

In South Africa, the political arena has been a notable instrument of change over the past years and its influence on the future of the country is once more a subject of speculation The national election in April 2009 returned the African National Congress (ANC) as the country's ruling party with Jacob Zuma as the new president. South Africa's democracy has entered into a new chapter and continued transformation of the SA political-economic landscape is expected. However, President Zuma has chosen a cabinet that has largely pleased the business and financial community, both in South Africa and internationally. Notably Trevor Manuel, South Africa's well respected finance minister has been kept on as head of the new National Planning Commission. Manuel will now be responsible for strategic planning and co-ordinating among government departments.
South African National Assembly Election Results for the Five Top Political Parties
(22 April 2009)
Parties Leaders Votes % Change Seats Change
African National Congress (ANC) Jacob Zuma 11,650,748 65.90 -3.79 264 -15
Democratic Alliance (DA) Helen Zille 2,945,829 16.66 +4.29 67 +17
Congress of the People (COPE) Mosiuoa Lekota 1,311,027 7.42 +7.42 30 +30
Inkatha Freedom Party (IFP) Mangosuthu Buthelezi 804,260 4.55 -2.42 18 -10
Independent Democrats (ID) Patricia de Lille 162,915 0.92 -0.78 4 -3

President Zuma wants his administration to deliver visible change. He stated, \"We wanted a structure that would enable us to achieve visible and tangible socioeconomic development within the next five years". A message of renewal and progress was evoked at his inauguration on the 9 May. Building on the promises of past president Nelson Mandela, he said,

"Fellow South Africans, this is indeed a moment of renewal.
It is an opportunity to rediscover, that which binds us together as a nation.
The unity of our nation should be a priority for all sectors of our society.
We are a people of vastly different experiences, of divergent interests, with widely different views.
Yet we share a common desire for a better life, and to live in peace and harmony.
We share a common conviction that never shall we return to a time of division and strife.
From this common purpose we must forge a partnership for reconstruction, development and progress".

The Zuma era in underway in South Africa and time will reflect on the progress that is made. The immediate challenge to the new government is that of safeguarding economic growth. As with the rest of the world South Africa's economy has been taking a battering, however it may still be better placed than many others to weather the storms.

In part the economic firmness in the country is a consequence of public sector spending, which is likely to remain robust. Zuma's government is expected to continue spending on general state services, while the drive by government and public corporations on infrastructure spending will also continue. The public sector plans to increase capital by a massive R 787 billion over the next three years.

Economic growth is expected to rebound to around 2,5% in 2010 as confidence improves on the back of lower interest rates and increased activity around the hosting of the 2010 FIFA World Cup (Nedbank Guide to the Economy, April 2009). The South African Reserve Bank's Monetary Policy Committee (MPC) has already responded to the improved inflation outlook and recessionary conditions by cutting interest rates by 450 basis points, taking the repo rate to its lowest level in nearly three years, after five percentage points of increases between June 2006 and June 2008.

KwaZulu-Natal is a Key Component
Change is not only happening on a national level but has filtered down to each of the nine provinces of South Africa, one of which is KwaZulu-Natal. Although it is the third smallest province of the country, KwaZulu-Natal is a key component of the southern African economy.

Stable and Effective Governance
The provincial government of KwaZulu-Natal is committed to providing stability and effective governance. As a consequence of the national elections, the leadership of the province was taken over by Dr Zweli Mkhize in April 2009, who at his inauguration also promised change, stating that:

"Our conviction that the future is in our hands will enable us to transform KwaZulu-Natal to become the leading province in terms of its economic development and the quality of the lives of all its citizens'.

KZN election results
Party Votes % Votes Seats
African National Congress (ANC) 2 192 516 62.95 51
Inkatha Freedom Party (IFP) 780 027 22.40 18
Democratic Alliance (DA) 318 559 9.15 7
Minority Front (MF) 71 507 2.05 2
Congress of the People (COPE) 44 890 1.29 1
African Christian Democratic Party (ACDP) 23 537 0.68 1
Others (see below) 51 951 1.49 0
Total 3 482 987 100.01 80

Five Priorities
Premier Mkhize stated that in order to address the many challenges facing KwaZulu-Natal, the following five priorities will receive focus-
• Rural development and agrarian reform to ensure food security and rehabilitation of emerging farmers who acquired land from land reform processes, providing mentorship, capacity building and relevant support. The long term goal is for the agricultural sector to be strengthened to create jobs and maximize export potential.
• Intensive campaign to fight crime, support community conflict resolution mechanisms and promotion of effective policing, utilizing the existing structures and police volunteers. This will be accompanied by the fight against corruption.
• Support the health reforms embodied in the National Health Insurance for effective health services and promotion of health promotion programmes. The HIV and AIDS programmes will be expanded and the fight against multiple drug resistant Tuberculosis (TB) will be prioritized, whilst the conditions of employment are attended to, to eliminate the possibility of frequent industrial action by the health personnel.
• Promotion of adult literacy and the improvement of the quality of education.
• Building the economy to create decent jobs, fight unemployment and eradicate poverty, and promotion of small enterprise development and building a cooperative movement to address the issues of empowerment.

Advantages of KwaZulu-Natal

KwaZulu-Natal has many assets that provide the basis for such challenges to be met. These include:

1. Advantageous geographical position on the east coast of Africa
Of major significance is that the ports of Durban and Richards Bay around which KwaZulu-Natal is established are two of Africa's gateways to the sea-lanes of the world. The two ports provide a key competitive advantage and ensure the province\'s importance for economic growth, effectively repositioning the country to increase its share of the global market.

2. Largely untapped environmental resources
Known as the garden province, KwaZulu-Natal is a subtropical region of lush and well-watered valleys. An abundance of coal is found in the north of the province as well as a variety of other minerals, and the combination of its soils and climate make it ideal farming country.

3. Unparalleled scenic beauty and bio-diversity.
KwaZulu-Natal boasts two World Heritage Sites - the Isimangaliso Wetland Park and the Ukhahlamba Drakensberg Park. Superb beaches of world-class quality are to be found along virtually the entire coastline.


4. Enormous Human Potential
Known as the Kingdom of the Zulu, KwaZulu-Natal is a melting pot of African, European and Indian cultures. The province has a plentiful supply of both skilled and trainable labour, as well as proven entrepreneurial abilities, with the dedicated workforce. Labour costs are low and productivity superior, with high standards of local management.

5. Business Friendly
KwaZulu-Natal is the stepping stone to Africa markets and this is a real advantage in setting up a business base in the Province. You will find a business-friendly environment with an informed financial system, a sound banking sector, strong investment ratings, effective trade support facilities, and a huge emerging market.


Impressive Ports and Cities
As a consequence of the location of KwaZulu-Natal's two ports, Ethekwini Municipality (Durban and surrounding towns) and Richards Bay have developed into major cities. Other key towns in the province include Newcastle, Ladysmith Margate, Kokstad Pinetown, Port Shepstone and Umhlanga Rocks.

Previously situated at Ulundi, Pietermaritzburg in the Msunduzi Municipality is the capital city of the province. Pietermaritzburg's reputation is slowly changing from sleepy hollow to that of "City of Choice", combining both style and vitality. Apart from a hub of governance, the city is a regional centre for impressive sports events, outdoor festivals, shows, education, and the arts such as the Comrades Marathon, the Duzi Marathon, the Midmar Mile, the Royal & Garden Show, Art & Cars in the Park and International cycling events.

The Pietermaritzburg area is ideally positioned as a base for manufacturing, particularly aluminium, chemicals, food, furniture, timber and leather products. Many companies, like Hulamin and the R1 billion Safsteel plant, have established themselves in the vicinity and opportunities exist in the manufacturing of steel products.

A rejuvenation of the inner city has been sparked by government departments that are buying and renovating old buildings to be used as office space. The city has made a commitment to spending 20% of its budget to maintain existing infrastructure and ensure that the region remains an attractive investment option for business.

A key project that has been identified by provincial government is the development of a corridor between Pietermaritzburg and Durban, similar to the one connecting Pretoria and Johannesburg. The land alongside the highway has been identified as high-value area by investors

eThekwini Metropolitan

eThekwini Metropolitan is the economic powerhouse of the province and a very promising global competitor. The GDP generated ranks eThekwini as the 2nd largest economic centre behind Johannesburg. Ethekwini is not only an investment capital, a tourism and leisure centre, an international logistics management centre, retail node, but also a cultural and entertainment hub. Currently, the municipality is a substantial administrative centre, providing key public services within the Metropolitan area as well as to the wider region.

Impressive Port
Durban receives 64% of South Africa's seaborne container traffic and is the busiest port in Africa. The R300-million harbour entrance widening and deepening project, which commenced in the third quarter of 2007, is due for completion in April 2010. The project, which was commissioned by Transnet, will widen the entrance from 120 m to 220 m and deepen it from 12, 8 m to 19 m at its deepest point. 
This upgrading will allow 9 000- TEU (twenty-foot equivalent units) container vessels to safely navigate the entrance. At present, the largest vessels that can be accommodated are limited to 4 000 TEUs. The improvement will result in significant cost savings and have a major impact on the South African economy. The project aims to provide for the Port of Durban's development needs for the next 60 to 100 years.

Transnet Port Terminals has invested R 72-million in the delivery of two 285-t rail-mounted gantry cranes to be used in the Pier 1 terminal expansion at the Durban harbour. The cranes will facilitate the transfer of containers between internal road vehicles and road wagons.

The Pier 1 expansion includes 18 rubber-tyred gantry cranes, six ship-to-shore cranes, a rail terminal and an administration building.

In keeping with these upgradings, eThekwini's Municipality's Economic Development Department has spearheaded the formation of a maritime cluster. The cluster includes shipping, boating, cargo handling, storage, transport and logistics. Support services, such as ship repairs, communication, pilotage, customs clearing, inspection services, and marine insurance are also covered. The Department's Acting Head, Shunnon Tulsiram, said: "The development and operations of the port and city are interrelated. To achieve a common vision for the sustainable development of the port and city in the future, and to ensure their successful coexistence, joint planning is essential".


Giant Operations in Richards Bay
Richards Bay anchors the country's largest harbour, the world's largest coal export terminal and numerous giant industries and operations. Richards Bay is strategically positioned relative to inland markets and tourist attractions such as iSimangaliso Wetland Park. The city is easily accessible via a dual carriageway from Durban to Pongola.

"Richards Bay is experiencing an unprecedented boom within all sectors. The expanded John Ross Highway is forging along, the Broadwalk Shopping Centre expansion is nearing completion, four major residential developments around the city are being completed, plans for a new entertainment complex near Medway will add to the existing expansion at the Small Craft Harbour, huge port plans are reaching fruition, and industrial land prices have risen 100% within the last two years due to burgeoning demand,\" says Cliff Bell, business development & marketing manager for Richards Bay Industrial Development Zone (IDZ) (Property 24, September 2008).

The Richards Bay Industrial Development Zone (RBIDZ), on the north-eastern coast of South Africa, encourages international export competitiveness through tax and duty-free incentives, world-class infrastructure and competitive input costs. The RBIDZ, which totals 540 hectares, comprises five sites that have been developed to suit various industry types. The site for light industry is presently being developed into a customs-controlled secure estate, while the other four sites that focus on medium to heavy industry are being developed to client specification

Since it\'s opening, the Port of Richards Bay has expanded rapidly with the establishment of one new berth every second year on average, proudly fulfilling its aim of making it South Africa\'s leading port in terms of cargo volumes. Transnet Port Terminals is preparing for the next boom by creating additional capacity at Richards Bay.

The 800 million rand expansion of South Africa's Richard's Bay export terminal will continue in anticipation of a recovery in demand for the country's exports, said, Solly Letsoalo, Transnet Port Terminals chief operating officer (Business Report, May 20, 2009).

Volumes moved through the port are expected to double over the next five years. Capacity will rise to 21 million metric tons a year by 2014 from 13 million tons, and will be further increased to handle 35 million tons annually by 2020.

Richards Bay Coal Terminal is owned by South Africa\'s largest coal exporters, including Anglo American Plc, BHP Billiton Ltd. and Xstrata Plc. It is the biggest source of coal for European power plants. Richards Bay is likely to export 56.77 million tonnes of coal this year compared with a capacity of 76 million tonnes, expanding to 91 million tonnes. When that expansion is complete Richards Bay Coal Terminal will be the world\'s single biggest coal export facility.

The development of the port and the new businesses it will attract will be beneficial for the economies of the surrounding communities, and will without a doubt create more job opportunities.

South Coast Action
According to Pat Symcox of Colliers International, an upgrade to many of the beach fronts of the smaller towns on the South Coast as well as a residential creep towards a healthier and more relaxed lifestyle on the South Coast continues create opportunities. This trend is apparent in the rapid development of the region. South of Durban, the Amanzimtoti region is growing fast. Arbour Crossing, a major new shopping development, was opened on November 20th 2008, with a Pick \'n Pay Hypermarket being the key tenant. The Galleria, a second development in the same area, is due to open in 2009.
Further south, Port Shepstone, which falls under the Ugu District Municipality, is the administrative, commercial, distribution and transport centre of the South Coast. An urban renewal programme has been proposed with the specific aim of stimulating the tourism economy in the area.

Other projects in the Ugu region include the development of the Biofuels industry; the development of clinics and hospitals in rural areas; local skills development; developing a tourism and agricultural master plan for the region; investment in electricity generation infrastructure; the proposed upgrading and expansion of the Margate Airport; a new sports complex and the setting up of major local manufacturing operations.

Tremendous Growth on the North Coast
The KwaZulu- Natal north coast area is undergoing tremendous growth and development. Over the last few years millions of rands worth of development has occurred at Umhlanga Ridge and Umhlanga New Town Centre. Consequently major national and international companies have moved into these areas. Several new office parks are still under development and nearing completion.

Inland service centres
Ladysmith is the commercial centre for a large farming district and serves as a major shopping centre for towns such as Colenso, Glencoe, Bergville and Dundee. As Ladysmith is the economic hub of the Uthukela District Municipality, the banking sector is strong. Ladysmith boasts a strong and diverse manufacturing base offering several industrial areas, the largest being the Ithala Industrial Estate a short distance from the CBD.

Similarly, the town of Newcastle serves as the regional centre for most of the economic development taking place within the Amajuba District Municipality and hosts a variety of well developed economic sectors as well as having potential for future growth. Although the Mittal steelworks and the Karbochem synthetic rubber plant dominate Newcastle's industrial portfolio, a diversity of manufacturing and commercial undertakings share in the region's success. Newcastle has become the national textile capital, with some 65% of all South Africa's textile manufacturing headquartered in the surrounding industrial areas, including the country's largest producer of school wear.

Infrastructure Investment

Apart from the ports, Provincial government has consistently invested large amounts of capital in infrastructure across the different nodes and corridors in the Province. Undoubtedly KwaZulu-Natal is undergoing the biggest investment in infrastructure programmes in its history.

Central to KwaZulu-Natal's logistics development is the construction of the state-of-the-art King Shaka International Airport. The facility is situated about 30 kilometres north of Durban\'s city centre. The second step of this development will be the Dube TradePort, with full customs and excise facilities and bonded areas. In the future, the new dual freeway road corridor between Durban and Richards Bay will stimulate growth by effectively linking to the two ports. Further development of the transport corridor, linking Durban to Gauteng, the inland economic heartland, means that Durban can supply Gauteng with a variety of manufactured goods. The overall aim is to integrate air, land and sea transport. The multibillion-rand initiative will also contain commercial developments such as hotel and conference facilities, as well as service activities, residential elements, and a resource centre focusing on training workers to international standards.

In the best-case scenario, the Dube TradePort will increase KwaZulu-Natal's contribution to the national gross domestic product (GDP) by R 20,5-billion which will result in the increase of fixed investments (R 6,9 billion) and the increased government revenues and taxes R 4,3 billion. It is estimated that about 270 000 jobs will be created directly and indirectly due to this project. (Department of Transport, KwaZulu-Natal Provincial Government, 21 October 2008).

The Dube TradePort and the new international airport at La Mercy are predicted to begin operations by mid-2010.

Extending the life of Perishable Goods
The perishable-goods sector of the economy will benefit directly from the Dube TradePort. Produce will be transported at sea level instead of through Gauteng's OR Tambo International Airport at an altitude of about 2 000 m, which will extend the life of fresh produce. The port will include a cargo terminal and a perishables centre with direct air-side access providing a cold storage, a courier and a paid facility for the rapid export and import of time-sensitive products.

The transportation of perishable goods will be aided by the Dube TradePort's agricultural export zone, which will be beneficial for exporters of high-yield, time-sensitive, air-freighted horticultural produce. The Agri-Zone comprises 80 ha of land to be used for the cultivation of farming products and the provision of facilities designed to promote agricultural production and export in the region.

Attracting Developers
The Dube TradePort is also attracting developers to the province. From new locomotives to the upgrading of strategic rail links and the building of new stations, road restoration as well as the increasing port capacity, mutual advantage can be derived from private public partnerships in these opportunities.

2010 FIFA World Cup

The FIFA World Cupâ„¢ in June/July 2010 will bring to South Africa one of the biggest single sporting events in the world. Durban will host six games and one semi-final. The eThekwini Municipality has established the Strategic Projects Unit and 2010 Programme to drive and co-ordinate all strategic initiatives in the city as well as all the projects required to fulfil the City's hosting obligations. A key component of the business plan is the iconic Moses Mabhida Stadium in the heart of Durban, which a world class multi-purpose stadium in the making for the World Cup and beyond.

Iconic Moses Mabhida Stadium

Named after Moses Mabhida, a former General Secretary of the South African Communist Party, the new stadium complex includes an adjoining indoor arena, sporting museum, sports institute and a new transmodal transport station. The design of the stadium is characterized by large archways resembling the South African flag. The arch consists of 56 separate 10-m pieces, is 106 m high, weighs 3 500 t and has a high-tech cable car designed to take visitors to a viewing platform at the highest point. The high-tech cable car will be shipped from Italy and has the capacity to transport 25 people 
to the viewing platform at the apex of the 2 900-t, 106-m-tall steel arch over the stadium.

The capacity of the stadium is set to comprise of:
• 70 000 spectator seats
• Demountable seating will be removed to reduce the capacity to 54 000 post 2010 in legacy mode.
• 50 percent of the seats will be accessible from the main entrance while a 150 suites with housing ability totalling 7 500 set to cover a range of hospitality options.
• There are plans and allocations to increase the capacity of the stadium to 84 000 seats in the future to further accommodate major events such as Olympics.

Since the start of construction of the stadium two years ago, about 3 000 direct jobs have been created. Some 8 000 t of steel have already been used in the construction of the stadium, which is scheduled for completion in October 2009. For the provision and successful accomplishment of this development, the allocated budget amounts to R1, 83-billion. (http://www.sa2010.gov.za/)


"The benefits of the World Cup will reverberate through the city long after the last whistle has been blown," said Julie-May Ellingson, head of Durban\'s Strategic Projects Unit and of the city\'s 2010 programme. "Durban will be positioned as the sports and events capital of Africa and a world class city with the infrastructure and capabilities of hosting international events". The construction of the stadium means that Durban will be one of the few African cities able to host most of the Olympic disciplines within a single sporting precinct. This will bring economic benefits, including job creation, training and skills development, and will also attract investment, said Ellingson.

In addition, smaller sporting hubs are to be established around the identified training venues, which are located in previously neglected parts of the city. Stadia infrastructure development is also occurring in four district municipalities: Amajuba, Ugu, Umgungundlovu and uThungulu.

Transport Infrastructure
The projects under way for the World Cup have served as the main catalysts for the development of transport infrastructure in the province. Road, rail, air and marine have been integrated in an effort to boost economic growth in KwaZulu-Natal, with an emphasis on incorporating previously marginalised communities into the urban framework.

The city of Durban is planning a number of transport upgrades, as well as redesigning and upgrading major roads and intersections. The goal is to create a more internationally friendly travel destination as well as a more liveable city for residents. Developments include:

Public Transport Lanes
Public transport lanes are being created and designated on the southern part of the iNkosi Albert Luthuli Freeway (M4) as well as on the N3 motorway to free up traffic and speed up general mobility. The City of Durban's philosophy is to promote public transport over private and as such dedicated public lanes are being implemented where appropriate.

The Inner City Distribution System
The People Mover buses are attractive buses with large windows which travel along two designated routes within the city linking the beachfront to the CBD as far as Victoria Street Market. Departing every 15 minutes between 06:00 and 23:00, the wheelchair-friendly 'People Mover' already offers a safe, regular service to 30 000 people per month.

The 'People Mover' service will be expanded into a broader public transport inner city system, with large sections of travel in dedicated bus lanes. The service will cover the city from the beachfront through to Warwick Junction and from Margaret Mncadi Road through to the Moses Mabhida Stadium.

Second phases will extend into the Berea, Riverside and Umbilo, with high capacity links into the Umlazi, Chatsworth, KwaMashu, Inanda, Clermont and Pinetown areas.

Warwick Junction Infrastructure

Warwick Avenue is the entry point for commuters to the city centre and for traders wanting to meet their needs. Every day hundreds of buses, taxis, and trains enter and leave the area bringing and taking many workers to the centre, as well as thousands of visitors, shoppers, and informal traders.

This major transport hub is being revamped and restructured, to become a multi-modal transport precinct with better safety and efficiency, plus improved access.

The first projects to be implemented are as follows:
• A flyover will reroute traffic so that mainly buses or taxis will be allowed through Warwick Junction. The inbound flyover will be completed by December 2009.
• Public transport ranks and pedestrian facilities will be enhanced,
• Warwick Mall which will straddle the railway lines at Berea Station, introduces a vast new retail element to the Warwick Junction

eThekwini Municipality Strategic Projects unit head, Julie-May Ellingson referred to the Warwick Triangle viaducts as, "the most important transport project in the city in the last 20 years".

Road Network CCTV Monitoring and Surveillance
This system will be used to monitor security and traffic incidents in the city so that appropriate action can be taken.

Road Traffic System
A solar-powered LED traffic light programme is currently being developed

Non Motorized Transport
The city is developing pedestrian and cycle paths in the city.

Notwithstanding these projects , further afield other investment in transport infrastructure is underway.

* the R350 million P700 Corridor from Richards Bay to Ulundi will reduce the distance between Ulundi and Richards Bay
* the R300 million P577 from Mtubatuba to Hlabisa and Nongoma, and
* the construction of the R260 million Nsezi Bridge on the John Ross Highway near Empangeni, which is 1,2 kilometres long and the longest bridge in South Africa is scheduled to be completed in 2010. The Enseleni floodplain, on which the bridge is situated, is an environmentally sensitive area. Environmental factors have been taken into consideration throughout the course of the project, including the hippopotami living near the building site and the fact that the site is home to a variety of flora and fauna.

Grassroots Development
KwaZulu-Natal has prioritised the development of rural road networks, aimed at integrating previously marginalised communities into the urban framework. The project aims to stimulate economic activity and create job opportunities for emerging contractors and suppliers.

Over R2 257-million has been invested in the African Renaissance Roads Upgrading Programme (Arrup), which has promoted the participation of emerging Vukuzakhe contractors in the upgrading of eight major rural road transport corridors and one urban transport corridor in KZN.

The Zibambele Road Maintenance Contract System is a similar initiative, involving the employment of poor households by the KwaZulu-Natal Department of Transport to maintain rural roads in the Province. Zimbambele households maintain road drainage systems, ensure roadside visibility, maintain the road surface and clear the roads of litter and noxious weeds.

A total of 37 586 Zimbambele contractors were appointed earlier this year to maintain
23 638 km of rural roads.

Strategic Bridge City
Of note in the development of transport infrastructure in Durban is the development of Bridge City. A new town centre is being created 17 kilometres from Durban city centre, bridging the communities of Phoenix and Inanda, Ntuzuma and KwaMashu (INK) and linking them into the urban system. Located on the well known KwaMashu Highway strategic access between Bridge City, KwaMashu and the Phoenix Industrial Park will be provided.

The mixed use node will house major retail activity, civic buildings, commercial business and easily accessible transport infrastructure. A railway station is planned to be built below the two-level shopping centre that will allow people to embark and disembark into and through the shopping centre. Above the shopping centre, 750 residential apartments will be built

The centre is due to open its doors in October 2009 together with eThekwini Municipality's new bus and taxi rank (located adjacent to the shopping centre and the future rail station). The bus/taxi inter-modal facility is expected to accommodate approximately 100 000 people per day and 40 000 in each of the morning and afternoon peak periods (3 hours each).

The new commuter station and rail link within the transport precinct will provide direct access between Bridge City and all the major metropolitan areas of KwaZulu Natal.
The rail station is due to be opened in December 2011.


A Competitive Economy
The government and business people of KwaZulu-Natal are committed to building a Province capable of meeting the challenges of the 21st century, which means having a modern and competitive economy. The Province is second only to Gauteng in terms of its percentage contribution to South Africa's GDP.



Although one of the Province's strengths is that it has a diversified economy, four key sectors have been identified as the drivers of economic growth in the Province. These are:
 Services sector, including financial, social, transport, retail and government.
 Agriculture and agri-industry
 Industry, including heavy and light industry and manufacturing.
 Tourism, including domestic and foreign tourism.

Transforming lives

The finance, real estate and business services sectors contribute greatly to KwaZulu-Natal's economy. Providing basic social services to all households is an important part of socio-economic growth in the province and currently social service sectors showed the most growth in employment numbers in South Africa. According to President Zuma in his State of the Nation Speech in June 2009, "It is about transforming our cities and towns and building cohesive, sustainable and caring communities with closer access to work and social amenities, including sports and recreation facilities".


Socio-economic growth is about creating cohesive new living spaces for people and the Cornubia development, situated on a 1 200-ha greenfield site north of Mount Edgecombe, will do just that. Cornubia involves a R4,6-billion investment in roads, bridges and housing for more than 100 000 people and will create as many as 100 000 jobs. The development will deliver houses at scale and near to jobs, schools and clinics.

The private-public partnership between property development business Tongaat Hulett Developments and the eThekwini municipality is the largest multi-land-use development in South African history, and, once completed, will generate R250-million.

Swelling Real Estate Development
As a consequence of the excellent prospects, a high demand is evident for industrial and commercial land in proximity to the Dube TradePort. Together with this, the demand for homes is moving even further north. Substantial residential developments actively being marketed in the region include: Simbithi, Blythedale Coastal Resort, Seaton Delaval, and Brettonwood. Ballito is also growing fast and has its own schools, hospitals and major shopping centres destined for major growth.

Royal Palm Estates is one of the largest new developments on the North Coast of KwaZulu-Natal, with phase one spanning an area of over 700 hectares. This first phase includes a 380 hectare residential estate (Palm Lakes Residential), a 47 hectare office park (Palm Lakes Office), and a further 280 hectare corporate park (Palm Lakes Corporate).

At Simbithi Eco-Estate between Ballito and Salt Rock, some 30 minutes from the new King Shaka Airport at La Mercy, total potential land sales are in excess of R800 m, which will transform into total land and building value at approximately R6 bn. A fair share of buyers have bought apartments as holiday homes, triggering a domestic market. When complete, the 430 ha estate will include a wellness centre, along with a golf course and equestrian site.

According to Mark Taylor, CEO of developers, the eLan Croup, the company believes \"very passionately in the growth potential of the KwaZulu-Natal North Coast.\" The Elan Group is involved in a development at another \"mega resort,\" Blythedale Coastal Resort, within close distance of the Hluhluwe & Umfolozi Came Park, the St Lucia Wetlands Park, Kosi Bay and Cape Vidal.

A poverty-stricken rural community is the new part owner of the R10-billion Blythedale Coastal Resort, which was launched earlier this year. After a decade of squabbling over a land claim, the Dube community on the KwaZulu-Natal North Coast secured a 20% stake in the luxury resort, to be built on their ancestral land. As part of the settlement reached in January, the state bought the land on behalf of the 687 families for R 200-million, of which R 50-million will be given to the community to develop itself. Blythedale Hills will provide more than 1 000 social and affordable housing units.

Low-income earners and the wealthy will live together on the upmarket, 1000 ha estate, with its boutique hotel, spa, an 18-hole golf course and swimming pools. Houses, ranging in price from R42000 to R20-million, will have similar decor and style, and entry-level units will be government subsidised.

Other proposed facilities include a shopping centre, wellness centre and several schools.
"We are so happy to be a part of this development... this is going to be a huge benefit... as a community we can now see where we're going," said community representative Musa Dube.

Mark Taylor, éLan Group chairman, said the agreement was an example of what could be achieved if everyone worked towards a "common goal". The development was expected to create 80000 temporary jobs and 10000 permanent jobs.

These developments are in addition to various other private sector investments in major economic centres such as Durban, Pietermaritzburg and Richards Bay. After some delay, work on the Durban Point Development Area has recommenced; a project which will add prestige to the city. This location, which extends from Bell Street to the harbour and from the beachfront to Point Road, includes uShaka Marine World, but there is still another 45 ha of precincts to be completed. The regeneration of old buildings and upgraded infrastructure has already improved the area.

The eThekwini Municipality also proposes to extend the Central Beachfront promenade from uShaka Beach to Country Club Beach and to redevelop facilities at Addington Beach, New Beach, Dairy Beach and the area around the existing XL Restaurant as well as to upgrade the Mini-town facility.

The national Government Urban Development Zone (UDZ) tax incentive has been extended by five years from 2009 to enable the private sector to play an increasingly significant role in assisting with the development of South Africa's inner cities. For the refurbishment of existing buildings, investors are eligible to receive a 20% tax deduction in the first year of earning income, plus an annual depreciation of 20% over a four-year period.

For new developments, this incentive offers a tax deduction of 20% in the first year, plus an annual depreciation of 5% for the next 16 years. This ultimately leads to a substantial subsidy that should stimulate the inner city's property sector.

Already investments valued at a massive R1 billion have been pumped into Durban\'s inner city Urban Development Zone (UDZ), impeding decay and contributing to the restoration of the city\'s high-profile business and residential status. The eThekwini Urban Development Zone consists of the Durban CBD, including parts of Walter Gilbert Road.

Successful developments under the scheme include Albaraka Bank and the Standard Bank regional offices at Kingsmead Office Park, the ABSA building, the JBS building, housing a Mr Price shop, and the Olwandle Guest House in Stalwart Simelane Street, General Motors Dealership on the corner of Prince Alfred Street and Old Fort Road, Himalaya House at 273 Yusuf Dadoo Street.


Advanced Information Communication Technology
Durban is a leader in information communication technology with good IT infrastructure, including modern telecommunications and a sub-sea cable connectivity to the Internet.
The Smart City of Durban intends to be the leading African city in the provision of affordable, high quality, broadband access to its citizens, the business community and visitors.

Construction of the new Seacom undersea fibre optics cable along the east coast of Africa, including land-based infrastructure, and laying of the cable under the ocean floor, has been completed and operation is set to begin. The landing station in South Africa is at Mtunzini, near Durban, on the north coast.

Neotel, South Africa's second national operator, and Seacom, the developer of the private cable, which will connect South and East Africa to Europe and India, have agreed to commercial terms for the partnership of landing the sea cable system in South Africa.
Ajay Pandey, MD, Neotel said that through the partnership, Neotel will own the cable landing station and all facilities within the South African territory. The terms of the agreement ensure that the operation of the cable will meet current and future regulations, in line with the Electronic Communications Act of 2006.
Neotel will operate the facilities on an open access basis. Neotel and Seacom believe that such a policy will stimulate the South African international bandwidth market and make available affordable bandwidth to South African customers. Broadband is about dynamic media transfer, and it is instantaneous. The bandwidth that it will bring to the continent could facilitate development in education, healthcare, conservation, as well as significantly lowering the cost of doing business for companies.

Niche Agricultural Production
As KwaZulu-Natal is South Africa's best watered province; it has a larger area of high quality agricultural land than any other province, and it is the national leader in several agricultural products. The Midlands area between Pietermaritzburg and the Drakensberg is the heart of this high quality agricultural area concentrate on vegetable, dairy and stock-farming. The KwaZulu-Natal coastal belt yields sugar cane, wood, oranges, bananas, mangoes and other tropical fruit. Another major source of income is forestry, in the areas around Vryheid, Eshowe, Richmond, Harding and Ngome.

Attempts are being made to boost the Province's enormous potential in agriculture into competitive advantage by:

• Utilising all 590 bio-resource regions to produce timber, vegetables, fruit and meat products for export.
• Reducing reliance on imported foods and bringing down food prices.
• Moving subsistence farmers upwards into first economy.

While prices of generic agricultural commodities continue to decline, those of niche products are on the increase. KwaZulu-Natal offers plenty of opportunities in range of products from essential oils to biodiesel from timber, sugar cane or coconut or palm oil nuts.
Enterprise iLembe, the economic development arm of the iLembe District Municipality, is working with The Stables Wine Estate, a wine farm located in the KwaZulu-Natal midlands, to promote the north coast area as a new wine farm destination.
The Stables Wine Estate consists of 27 hectares of vines - eight in Nottingham Road and 19 in Greytown. The wines being produced from the grapes of these vines have already won medals, proving that quality wines can be produced in KwaZulu-Natal.
The development of a wine industry in KwaZulu-Natal offers substantial employment to the region, in both agriculture and tourism.


Manufacturing Sector- Robust and resilient
According to a report from a recent workshop hosted by Deloitte in Durban, "The manufacturing sector in KwaZulu-Natal is robust and resilient, and is facing the global economic downturn head-on, confident of emerging from the crisis stronger",(March 2009).
KwaZulu-Natal\'s diversified manufacturing sector is the second largest in the country, after Gauteng Province. The manufacturing sector is geared for export, with nearly a third of South Africa\'s manufactured exports being produced in KwaZulu-Natal. According to the provincial government, manufacturing is the biggest contributor to the province\'s gross geographic product (GGP).
The province has serious, globally competitive manufacturers with original designs and great components. The largest manufacturing industries are the automobile and component sector, pulp and paper products, chemicals and petrochemicals, and food and beverages.
Automotive Development Programme

In order to support the motor industry, details of a motor vehicle development programme that aims to boost local production to 1,2-million units a year by 2020 was released in September 2008. The automotive industry is the largest and leading manufacturing sector in the domestic economy.

The new tariffs are meant to protect continued local vehicle assembly. Besides having the huge Toyota manufacturing facility located at Prospecton, south of Durban, the region benefits substantially from an increasing number of automotive suppliers locating in KwaZulu-Natal. Other vehicle manufacturers include MAN Truck and Bus SA, Volvo Trucks and Bell Equipment.

More than 50 major automotive component suppliers are located in KZN, with 18 of them being secondary suppliers who provide individual components or raw materials to the manufacturers of components or sub-assemblies for the motor assembly plants.

Value-added support aims encourage increasing levels of local value addition along the automotive value chain with positive spin-offs for employment creation. The industry generates strong linkages with:
• Input industries such as aluminium, chemicals, electronics, leather & textiles, plastics, steel, machinery and equipment,
• Service industries such as engineering, logistics, tooling,
• Others such as financial, wholesale & retail, advertising.

This sector is supported by the ports, which provide a sound logistical platform for manufacturing operations dependent on either inbound or outbound seaborne freight.
The Maritime Vessel Construction and Repair (MVC&R) sector, also known as ship building industry, is vast and fast evolving. In recent times, Shipbuilding has changed from a \"heavy industry\" to become a capital and technology intensive activity.

Mining Resources
The mining sector which includes coal, titanium dioxide, zircon along with iron, steel and ferroalloys is important.

KwaZulu-Natal has an abundance of untapped resources to stimulate the economies of the northern part of the province. "Mining in smaller towns of the province will be a major source of job creation and will serve as a catalyst for economic growth and development in these areas," says Zamo Gwala, CEO of Trade and Investment KZN (August 2008). There are many opportunities for small businesses in value added initiatives.

Miranda, the mineral exploration and investment holding company, Sesikhona Kliprand Colliery project is the first in its coal pipeline in KwaZulu-Natal to move into the production phase. \"The award of our first mining right will unlock value at Sesikhona and move Miranda into a revenue producing exploration company with positive cash flows,\" said Miranda CEO Ron Nel (March, 2009).

Leading Tourism Destination
Despite its distance from the affluent first world markets, South Africa ranks within the top 30 tourism destinations in the world. KwaZulu-Natal is now the market leader for domestic tourism in South Africa, as well as number two in term of international tourism. The Province has great accommodation facilities, wonderful leisure and recreation opportunities, a rich history and diverse cultures. Many interesting sites have a colourful history of heroic people, struggles and wars represented in numerous battle sites.

The Durban International Convention Centre (ICC) remains the best conference centre in Africa and is considered to be amongst the top 10 worldwide. Since its opening in August 1997 the ICC has contributed as much as R 6 billion to the local economy. An ICC conference delegate survey done in October 2008 by Tourism KwaZulu-Natal, shows that on average delegates spend R6 400 per conference and that 47% of those polled said that they were "extremely likely" to return to the city on holiday with in five year period. The ICC's expansion into an entertainment arena that has been especially designed for concerts, sports such as wrestling, ice skating shows and exhibitions will bring new benefits.

Set apart by extensive sections of undeveloped coastline, many investors have taken note of KwaZulu-Natal. Those looking for development potential should consider the province\'s South Coast and game reserves, as well as Durban\'s CBD where a number of hotels require upgrading, and there is a necessity for new ones. There are currently a number of new hotels and a number of guesthouses at various stages of development in the province in Richards Bay, Durban, Hluhluwe, Umhlanga, Ballito and Bergville, as well as a hotel scheduled for the new King Shaka International Airport. On the cards for KwaZulu-Natal are accommodation facilities \"within shopping malls and connected to beach facilities\".

With the means to invest anywhere in the world, IFA Hotels & Resorts\' decision to invest in the South Africa and the Indian Ocean region was prompted by factors such as a well developed transport infrastructure and the strength of both domestic and international tourism. Further, the developer expects tourism in KwaZulu-Natal to expand rapidly. As such an investment of US$ 250m by IFA Hotels & Resorts into the new Fairmont Zimbali ensures that a property of the highest international standard will be delivered. The Fairmont Zimbali will feature an ultra-luxurious resort hotel, a championship Gary Player designed golf course with clubhouse and golf academy, full-service Willow Stream Spa, Signature Beachfront Villas, Golf Chalets, Apartments and Villas, as well as a Fairmont Heritage Place Private Residence Club.

The Tusk Umfolozi Casino, in Empangeni, in KwaZulu-Natal is relocating to Richards Bay, with bigger and better facilities by Peermont, the gaming, hotel and entertainment group in 2010. The relocation and expansion of the casino, which currently does not have a hotel, was decided on after a market research and feasibility study was done on the Richards Bay area to determine the practicability of the relocation.

The project is valued at approximately R 220-million and will consist of the new casino, a hotel and a 400-seat conference centre. The casino will have 300 slot machines, 16 tables, and a Metcourt hotel comprising of 80 rooms and suites, a restaurant and a show bar. Peermont chief commercial officer Mark Jakins says that the Richards Bay region is currently undergoing rapid economic development which, the company believe will strengthen sustainable demand in the years ahead for the expanded hotel, gaming and conference facilities in the area.

Further inland, there are plans for developments at wildlife-rich Jozini Dam along the Elephant Coast, while a public private partnership process is being implemented by KZN Wildlife at Royal Natal National Park in the Drakensburg.

Tourism has been identified as another means to transfer wealth into township areas in Pietermaritzburg by Msunduzi's municipal manager, Rob Haswell. Msunduzi is also the city of Nelson Mandela, Harry Gwala, and Mahatma Ghandi which provides a strong liberation heritage that will be a great tourism product once it has been properly packaged. The city is also looking at ways to further capitalise on the major international events it hosts: the Midmar Mile, Duzi and the Comrades Marathon. The aim is to increase the amount of time people spend in the town.

Zulu culture and history forms a key part of the Province's heritage and the Zulu monarchy of KwaZulu-Natal is the monarchy specifically provided for in South Africa\'s Constitution. As such KwaZulu-Natal's history and culture has not been forgotten in the face of progress. The ancestral burial ground of the early Zulu kings in eMakhosini Valley of the Kings in Ulundi is receiving a multi-million rand facelift which will put it in a position to attract scores of local and international tourists. The centre would include a magnificent conference centre, a restaurant, viewing tower and an amphitheatre. The aim of the centre is to conserve ancestral burial places, historical battlefields and other sites with historical and cultural significance.
The KwaBulawayo Tourism Development project was identified as a means for uplifting the local communities in the culturally rich Umlalazi region of the uThungulu District Municipality. The region is home to King Shaka\'s KwaBulawayo Military Capital, and is recognized as being one of the key sites of Zulu heritage. Graphic visual and aural heritage information, plus displays and models, will be provided.
In order to contribute to tourism growth in the region, the Development Bank of Southern Africa (DBSA) recently announced a new strategy designed to prioritise tourism projects in South Africa and the SADC region. The DBSA says it will only consider medium to large sized tourism projects, which equates to an investment amounting to more than R20 million in South Africa or US$10 million in SADC countries.

Environmental Challenges
Climate change is receiving greater focus globally with corresponding imperatives for South African industry to comply. The South African Chamber of Commerce and Industry, April 2009 commented that in terms of present industrial and commercial activity, there is a trade-off between growth and development and those measures designed to mitigate the impact of economic activity on the environment.

Environmental consultants are developing innovative frameworks to assist local and provincial government primarily in the implementation of stringent environmental legislation, which will particularly affect infrastructural development in the KwaZulu-Natal region. This is necessary, given that the province, which is rich in biodiversity, has become increasingly vulnerable to the effects of global climate change.

Investment is Key to Growing the Economy
No analysis can capture the true extent of what might happen in the 2010s. Closely linked to the Dube TradePort, is the province's inward investment and trade promotion strategy, which is driven by the KZN Department of Economic Development and Tourism, and Trade and Investment KZN (TIKZN). Increasing the levels of Foreign Direct Investment (FDI) into the province is the most direct and effective way of stimulating economic growth in the short to medium term, especially if this investment is in the form of fixed investments. Government's spending on fixed investment, will also be focused on areas which, are growing or have the potential for economic growth, in order to attract Private-sector investment, stimulate sustainable economic activities and create long-term employment opportunities.

The province has been elevated to the status of being a major actor on the international stage, through bilateral agreements with many countries such as China, India, Spain and Japan. KwaZulu-Natal has established three partnerships in China. Relations with Belgium have been strengthened since 2004. In 2005, co-operation with India was established through the signing of a memorandum of understanding (MoU) with the province of Punjab. KwaZulu-Natal is currently working on strengthening relations with Baden-Württemberg in areas such as social development, education, sport and recreation, 2010 FIFA World Cup and tourism.

More than 4000 jobs will be created when a company from Vietnam opens its first African furniture manufacturing plant in the uMshwathi area outside Pietermaritzburg.
Navifico, a furniture manufacturing company, wants to invest more than R100-million in the province. Speaking after meeting a delegation from Navifico, Economic Development MEC Mike Mabuyakhulu said the investment would be a major boost for the province.

Relations built with Mozambique and other neighbouring states have been strengthened, particularly in the areas of commerce, health and co-operation between security services.
The focus for the next five years will be to build on the firm foundation laid over the past five years. This will be achieved by pursuing three main objectives:
* to continue strengthening relations that have been enshrined in formal co-operative agreements with a specific focus on value-adding programmes that directly contribute to our growth and development efforts
* to support the national foreign policy direction, in this regard playing a pivotal role in African Renaissance and strengthening African Renaissance efforts on the African continent
* to continue to expand the drive of economic diplomacy that South Africa has commenced, since 2006.


Investment in KZN is encouraged by grants and low interest loans available from various sources. The province has established the KZN Growth Fund for projects in excess of R30m, while the Ithala Development Corporation funds developments specific to the province. Another avenue of aid, Gijima KZN, provides assistance with skills development, government and private sector networking, and applications for financial assistance. Government incentives applicable to the whole country are available in the form of programmes from the Department of Trade and Industry.

In the foreword to a new book called Africa\'s Greatest Entrepreneurs, Sir Richard Branson says that across Africa the spirit of entrepreneurship is very much alive, leaving him \"constantly amazed by the incredible energy and determination and innovation coming from entrepreneurs across the continent.\" Entrepreneurs help to shape changes in the economic landscape of the continent, bringing much-needed services to marginalised communities, creating spin-off small business opportunities, providing jobs in poverty stricken areas, and up-skilling the workforce

A recent survey of nearly 200 leading entrepreneurs across Europe, the Middle East and Africa has revealed that entrepreneurs remained relatively optimistic about business opportunities, despite the global recession. The study carried out by audit and business advisory firm Ernst & Young indicated that leading entrepreneurs were looking beyond the immediate crisis toward future opportunities. \"While focusing on their current performance is still important to entrepreneurs, it is in their culture to constantly look for new opportunities and new markets. This might mean a new sector, a fresh idea or a different geography. Or all three,\" (Zanele Xaba, Director of Entrepreneurial Initiatives, Ernst and Young)

KwaZulu-Natal offers economic sectors with fresh opportunity, many new initiatives and to some a fresh geography. Come and make change happen here! KwaZulu-Natal is ready to evolve.

Grant Adlam
grant@topbusiness.co.za




kzn: The Evolution of KwaZulu-Natal - 2009 -Grant Adlam

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