Setting municipal priorities straight

LOCAL ECONOMIC DEVELOPMENT SETTING MUNICIPAL PRIORITIES STRAIGHT

A key driver of improving the lives of ordinary citizens is the ability to attract investment and facilitate development. The City of Ekurhuleni has identified a number of priority areas to enable regional economic development.

The City of Ekurhuleni is a major economic and social role player within the context of South Africa by means of its strong industrial characteristics and contribution to the national economy, as well as the size and extent of the population that is contained within its administrative boundary.

The ever-changing context of economic growth and advancement, and the need of the economy for sufficient skills to drive this growth, requires a higher education institution that can cultivate, support skills development aimed at advancing economies, and growing knowledgebased information flows and processing in a variety of fields and occupations.

EKURHULENI IN CONTEXT One of three metropolitan municipalities in Gauteng, Ekurhuleni is a key role-player in the Gauteng City Region (GCR) – a cluster of cities, towns and urban nodes that together make up the economic heartland of South Africa. Positioned on the eastern side of the GCR, the City of Ekurhuleni is the manufacturing and logistics hub of the country, well connected via rail, road and air to domestic and international markets, and increasingly aiming to brand and leverage its economy around the O.R. Tambo International Airport as an aerotropolis.

Pre-Covid, the City of Ekurhuleni had a total GDP of R301 billion. In terms of its total contribution towards the Gauteng province, Ekurhuleni ranks third behind Johannesburg and Tshwane, relative to all the regional economies to total Gauteng GDP.

The structure of the City of Ekurhuleni’s economy is dominated by four sectors, namely manufacturing, finance and business services, community services and general government. Although to a lesser extent, the trade and hospitality sectors also contribute significantly. Over the past years, major structural shifts have occurred in the structure of the economy, involving the decline of the dominance of the manufacturing sector, which dropped from 30.3% in 2000 to 22.7% in 2015. There was a comparable increase of the contribution of the finance and business services sector, which increased from 14.8% in 2011 to 21.3% in 2015.

In 2018, the community services sector was the largest within the City of Ekurhuleni, accounting for R66.4 billion or 22.7% of the total GVA. The sector that contributes the second most to the GVA of the City of Ekurhuleni is the manufacturing sector, at 20.8%, followed by the finance sector, with 20.3%. The sector that contributes the least to the economy of City of Ekurhuleni is the agriculture sector, with a contribution of R1.22 billion or 0.42% of the total GVA.

ECONOMIC STRATEGY The City, through its internal processes, developed its 10-point Economic Plan to position Ekurhuleni as the industrial hub of the South African economy. The plan identified 10 priority areas for economic intervention, which are: 1 Revitalisation of manufacturing sector 2 Implementation of the

Aerotropolis Masterplan 3 Acceleration of the IDZ/SEZ

Programme 4 Land availability for strategic development 5 Implementation of the Township

Economy Strategy 6 SMME support through public procurement 7 Massive infrastructure investment 8 An enabling public transport system 9 Promote localisation and local production 10 Skills, capacity development and institutional stabilisation. The plan serves as the City’s economic recovery and reconstruction plan, and provides a framework for targeted City-led interventions. Of the above, significant progress has been made to date particularly in respect to the revitalisation of the local economy, with some highlights below. City industrial parks: The City has directed substantial efforts into investing in its own industrial parks. Through strategic land release for economic development, the City developed its own industrial parks such as the Labore and Withok Industrial Precinct, which includes five catalytic projects at an estimated value of R251 million over five years. The automotive hub and manufacturing facility intend to target major industries.

Investment in Strategic Urban

Developments (SUDs): The City has seen significant progress in the implementation of its Strategic Urban Development zones. Various SUDs are currently underway – namely ACSA Western Commercial Precinct, S&J Industrial Precinct, Lords View Industrial Estate, Prasa-Gibela and developments along the R21 Corridor – with the City investing over R900 million on bulk infrastructure to unlock these investments. These economic projects provide the City with an investment pipeline of over R300 billion over 15years.

Accelerating the implementation of

SEZ Programme: As part of revitalising the manufacturing sector in Ekurhuleni, the SEZ (Special Economic Zone) Programme has become one of the City’s key programmes. Investment in the O.R. Tambo International Airport IDZ has included the following: - Northern Precinct (R4.5 billion), currently under implementation with over 1 000 people working in the precinct. - ORTIA SEZ Precinct 1, currently under implementation and almost fully let to tenants, with a total capital investment (bulk and top structure) to date of

R1.1 billion, total jobs (direct, indirect and induced) estimated at 3 000, and a GDP contribution estimated at

R1.5 billion. - ORTIA SEZ Precinct 2, currently under implementation, with a total capital investment of R1.5 billion, total jobs estimated at 7 557, and a GDP contribution estimated at R1.8 billion. - ORTIA SEZ Precinct 3, currently under implementation, with a total capital investment of R566 million, total jobs estimated at 2 788, and a GDP contribution estimated at R658.7 million. - Tambo Springs Inland Terminal SEZ, currently under implementation, to deliver the required bulk infrastructure to support the development, with the City spending over R240 million to date on bulk and related services.

FACILITATING INVESTMENT The City has also continually assisted investors at different stages of investment to remove stumbling blocks to make their developments and investment a reality. The interventions have led to improved working relationships among key role players and departments in the City. During the 2020/21 financial year, the City managed to attract and achieve an investment value of R4.4 billion. This achievement was against the R4 billion target and was achieved despite the challenging economic conditions presented by the Covid-19 pandemic and resultant lockdowns.

TARGET? EXCEEDED!

During the 2020/21 financial year, the City of Ekurhuleni achieved an investment value of R4.4 billion against a target of R4 billion.

A MIXED-USE DESTINATION

The mixed-use Riverfields Precinct based in Kempton Park lies adjacent to the R21 and is a major component of the Albertina Sisulu Development Corridor. It is redefining how Ekurhuleni’s businesses and residents live, work and play.

The Riverfields development precinct is a key growth node in Gauteng, which is perfectly positioned for various residential, business and logistics opportunities. Having been earmarked as one of the City of

Ekurhuleni’s Aerotropolis catalytic projects, Riverfields is a regional beacon of progress founded on a blueprint of forward thinking.

Working in partnership with the City of Ekurhuleni, in excess of R950 million has already been in invested in bulk services infrastructure for Riverfields, resulting in top structure investment of R11 billion with another R10 billion currently underway.

MILESTONES: BULK SERVICES Notable bulk services milestones have been achieved in the Riverfields Precinct, including the R21 underpass. Completed in 2015, it alleviates the limitation of the R23 bridge over the R21 and was a catalyst for the

Riverfields industrial and logistics corridor. The 88 kV line upgrade and new transformer in the Bredell substation was completed in 2020 and has the capacity to provide an additional 126 MVA to Bredell and Riverfields. The most recent milestone is the completed displaced right-turn intersection that acts as the gateway to the industrial corridor. This intersection type is also known as a continuous-flow intersection, which is an innovative solution for traffic that can carry between 85 000 and 130 000 cars a day. This is one the first intersections of its kind in South Africa.

From the City of Ekurhuleni’s side, milestones include the building of the Bredell Reservoir, providing water supplies for the entire region. The upgrade of the Northern Outfall Sewer line assists with sewage carrying capacity in the industrial node, while co-funding the 88 kV line and new transformer in Bredell. The muchneeded upgrade of the local sewer pump station is currently underway.

UNLOCKING FUTURE DEVELOPMENTS In order to unlock further future developments, certain infrastructure is still required. The sewer processing capacity in the Eastern Precinct, under the banner of the Ekurhuleni Water Care Company (ERWAT), is currently constrained and in need of a significant upgrade. Upgrades are also required on the Northern Outfall Sewer line phase 3 and Pomona Outfall Sewer line phase 1. Road upgrades are

needed as well. These include the extension of the R21 expressway over the Swartspruit, the construction of the K155 and overpass over the railway line, as well as the K105, which will connect Riverfields and the City of Ekurhuleni’s Esselen Park residential development. Power infrastructure is also required on the western part of the development via an 88 kV line.

MILESTONES: DEVELOPMENT PROJECTS Significant development milestones include the upmarket residential estates of Glen Erasmia and Glen Eagle. The Glen Eagle Office Park is an ongoing development with over 12 office buildings completed, another two expecting to start soon, and a few well-placed stands catering for most office sizes still available. From a logistics point of view, Riverfields is home to the well-considered Plumbago Industrial and Business Park, which houses various multinational tenants, including DHL, DB Schenker, Takealot and John Deere. Other industrial investors include the multinational Bosch and data centre owner Teraco. Teraco houses Africa’s most connected data centres and is currently building an electrical substation with a 120 MVA capacity in Riverfields.

The Riverfields Precinct has also become a preferred destination for Equites Property Fund Limited, which, in addition to its two business parks within Riverfields Precinct, housing the multinational companies of Sandvik and Imperial Logistics, also acquired the 38 hectare DSV Campus, in partnership with the Eskom Pension and Provident Fund.

NEW DEVELOPMENTS Equites Property Fund Limited is currently busy with further expansion in the precinct with another approximately 200 000 m2 of leasable space.

Precinct One is Riverfields’ newest mixed-use development and includes the recently completed, family-focused convenience centre Harvest Place. With ample, free outdoor and indoor parking, this upmarket 17 000 m2 GLA centre is anchored by Woolworths, Checkers and Food Lover’s Market. In addition, it offers family fashion options, a coffee bar, health and beauty stores, a liquor store, restaurants and fast-food outlets. Other developments that have commenced in Precinct One include Glen Starling, with 400 new apartments for the rental market, and the new campus for the Maranatha Church.

On the residential front, the upmarket Swallow Hills Estate has been well received by the market, endorsing Riverfields Precinct as a residential address of choice, with most of the 180 full title stands sold out and the first of the upmarket sectional title developments within the Estate, delaCasa@Swallow Hills Estate, completely sold out. The Estate offers 24-hour access control security, landscaped garden parks, a maintained soccer field, outside gym equipment, children’s playgrounds, fibre-to-the-home, and a modern club house.

FUTURE PROJECTS There are exciting initiatives and proposals that would see the development of a new primary and high school, a retirement home development (including frail care), sectional title housing, a medical node that includes a hospital campus, as well as community sport and outdoor facilities – catering for the well-being of all community members. The Eastern Precinct will continue to attract investment in the logistics and warehousing market.

Beyond providing great spaces for Ekurhuleni’s citizens and business community, Riverfields is also focused on social development outcomes. As such, it is in the planning stage of the Riverfields Foundation, which will be a registered NPO with the aim of uplifting and empowering the local community. Riverfields’ vision is to a create sustainable mixed-use development that caters for all and assists in driving the economy of this beautiful country. Together, we are better.