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Gold set for a major shake-u... Rumours fuel financials frenz... Cape looks good with the sun in Capricor... Dragnet of economic slowdown catches Pe... Yorkcor adds its weight to Safcol priva... Still a hidden hand in Gauteng's house o... Hardware to software gives Usko leading ... |
Cape looks good with the sun in Capricorn
About 19 000 people could be employed on the multibillion-rand project, writes MARCIA KLEIN
Bordering the beaches of False Bay, 25km from Cape Town's city centre, the business, industrial and technological park will be bigger than the entire CBD. However, Capricorn MD Raven Naidoo plays down the notion that Capricorn is another Silicon Valley, saying it is designed for the local economy and environment. While it will be wired with new-age technology and hopes to attract high-tech industries, job creation, revitalisation of surrounding areas and environmental issues are high on its agenda. The R3.5-billion cost estimate for the ambitious project was made some years ago. Since then the price for infrastructure and buildings in the park, which will include offices, manufacturing facilities, a hotel and leisure complex and possible residential areas, has probably increased considerably. Capricorn's shareholders include Norwich (61%), Cape of Good Hope Bank (10%), state pension fund investment manager PIC (10%), Brimstone (10%) and Grinaker (9%).
Naidoo says research showed that SA and the Western Cape region could not sustain a science park on the basis of the European model, which is university linked. SA also has a problem in job creation, and research and development creates jobs only in high technology and not for people who need jobs the most. Taking these aspects into account, Capricorn came up with the idea of a technological and industrial park with facilities ranging from manufacturing to recreation - a combination business, industrial and technological park. "We are not saying shareholders don't have a profit motive, but there is a strong social and development motive too." Capricorn will not be another Silicon Valley. "We won't be as high-tech or as leading-edge and we hope to bring a lot more jobs for less sophisticated skills. We are wary about portraying the image of a Silicon Valley. We are unique."
According to Naidoo, the development has already resulted in higher property values in surrounding areas.
Parallels can certainly be drawn with Bangalore in India, which symptomises rapid development in that country. Microsoft found that the cost of Indian software engineers was a quarter that of the US and the quality of work as good. Now it is one of the top software development countries. With its seaside location, Bangalore is now the place to be and house prices in the surrounding areas are crazy. It makes a considerable contribution to economic growth. Naidoo hopes Capricorn will play a similar role in SA. Naidoo, who has an MSc in nuclear physics and a doctorate in physics, was appointed MD 20 months ago, but has been involved since 1993 when he was at the University of Sussex, completing a technology and innovation management course. He was doing work on technology and science parks in Germany, the UK and France and the government asked him for a development paper. At the time the project was being run part-time and was almost on hold. It needed someone at the top to actually make it happen. Since 1996, when he came on board full time, he has been involved in the planning process, environmental impact design and public participation exercises. "This was fairly costly. We spent R6-million to R8-million on these activities." On February 2 this year, Capricorn took possession of the first 68 hectares which will form the first phase and will cost about R95-million to develop in terms of basic infrastructure. Construction has since begun on the first building for Sasol Mining Initiators, a 60-40 joint venture between Sasol and Plessey, which has signed a 10-year lease worth R1.5-million at the park. It is the first major tenant to take advantage of the tax holiday which Capricorn offers. Development work totalling R61.5-million is under way, of which R35-million is infrastructure and the rest factory and warehouse units. In the first phase 45% will be light industrial manufacturing, 40% office and research facilities and 10% for commercial and recreational facilities. Over the next year Capricorn hopes to complete installation of infrastructure, including roads, sewage and a lake. Grinaker is responsible for the infrastructure, but there is no preferred contractor for the buildings. The development is private, fenced off and with limited access. It will have state of the art IT and telephone systems. There are 140 plots and it is estimated that about 19 000 people could work in the park. Capricorn is in the process of signing its second building and is in negotiation for a further 10. Judging by interest so far, Naidoo expects a combination of high- and medium-tech companies. It is expected that the first phase will take five years and the full project 15 years to complete. Capricorn is being developed with the full support of national and provincial government. National government has allocated the project tax holiday status, which means new manufacturers could qualify for a six-year holiday. There are also other incentives to attract investment and create jobs and Capricorn is engaged in public-private sector arrangements on technology, technological transfer and job creation. Capricorn is a toned-down version of an export processing zone.
Naidoo says he is aiming for 25% foreign investors, but a major problem for attracting investment is SA's high corporate tax rate.
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