Despite the rah-rah comments made by headline-hungry politicians, the first phase of the eagerly awaited multi-billion Durban Automotive Supplier Park (DASP) appears to be in need of a push start, writes Shirley le Guern.
The floods have literally muddied the waters and have seriously challenged Toyota South Africa, the heart of the province’s auto sector.
Before the floods, there was pressure on provincial and municipal authorities to press ahead with the DASP to keep pace with the production of Toyota’s new hybrid model, but with massive damage at Toyota’s flooded Prospecton plant, there is no clarity on when the giant manufacturer will be up and running at capacity again.
At the time of going to press, the Department of Economic Development, Tourism and Environmental Affairs was unable to provide either timelines for the DASP or any idea of the delay in the start of the R3-billion first phase, which reports have said is expected to be operational by 2023.
The National Association of Automobile Manufacturers of South Africa (Naamsa) has also skirted the issue, saying the local automotive industry could expect a stop-start recovery in 2022 because of flooding, the impact of Covid and the Russia/Ukraine war which had upset global supply chains.
To recap, the DASP is estimated to be a R11-billion automotive hub that will be home to component manufacturing and car assembly firms, and was to be located on a 100-hectare site in Illovo, south of Durban, close to the existing Toyota factory. It was expected to create around 6 000 jobs during construction and 2 800 employment opportunities once up and running.
Hamish Erskine, CEO of Dube TradePort, said in terms of a 2016 agreement, DTP was both developer and operator of the DASP. The DTP had a successful record operating a similar facility to the north of the city which is home to the company that assembles Mahinda trucks.
DTP is seen by many as a logical choice for driving a project regarded as vital to the provincial economy and a realisation of the Department of Trade and Industry’s South African Automotive Industry Masterplan which aims to boost local content to 60% by 2035.
It currently sits at just 40% with the remainder of components imported. An increase of 20% means fast tracking the development of local component suppliers in conjunction with global investors. These manufacturers would be the envisaged tenants of the DASP.
“In order to achieve local content (goals), automotive suppliers have to be clustered and brought into the country from elsewhere and expanded and grown. Toyota always had the intention of achieving this and wanted to partner with government on it,” Erskine said.
DTP’s experience in building specialised economic zones meant it had the capacity and resources to run the DASP. It was an extension of what DTP already does.
“The only difference is that this serves a different sector – the automotive industry – whereas up here we do mainly pharmaceutical, healthcare, electronics and general manufacturing. It’s got similar nuances, but slightly different planning components. But that’s something we can address reasonably easily.”
The 1 000-hectare site alongside the Illovo River was purchased in 2016 for an undisclosed sum. Of this, 100 hectares was set aside for phase 1 with an expected operational date of 2022 at the time of the original announcement.
But, environmental delays linked to the development of that site pushed out the start of the project beyond Toyota’s envisaged timelines, so DTP negotiated with Transnet to begin construction of the first phase of DASP on the old Durban airport site.
Exactly how much of this site is due for development and timelines on the project remain uncertain. However, given the original six-year development estimates, an immediate but improbable start would only see phase 1 ready by 2028.
The old airport terminal building, runways and adjacent fields were bought by Transnet for R2-billion after the airport moved to King Shaka. It was earmarked for the now mothballed Durban Dig-out Port.
Subsequently, a private company, Seaworld, proposed development of the old site as a hub for small airlines. But a 10-year lease signed in 2017 has been the subject of a court case because of the controversial occupation of the site by a host of tenants including a tile manufacturer, scrapyard and logistics company. Toyota also stores vehicles on the property.
The old airport site, while ideally situated within a few kilometres of Toyota’s Prospecton plant, bore the brunt of the recent flooding. KZN INVEST tried to establish how many tenants had been signed up for the DASP at the old airport, but was unsuccessful by the time of going to print.