Limpopo's multibillion-rand Musina-Makhado Special Economic Zone has ground to a halt
The Musina-Makhado Special Economic Zone, announced in 2018, was intended to attract investments of R40bn, but so far only one company has made a firm commitment to invest.
Seven years after its launch by President Cyril Ramaphosa, the multibillion-rand Musina-Makhado Special Economic Zone (MMSEZ) in Limpopo is at a standstill – R67.5-million has been spent on consultants and R50-million on roads and infrastructure, but there is no infrastructure, no electricity connection, no roads and no water.
Described on its website as 'a flagship of the Limpopo Provincial Government', the MMSEZ is 'a green field investment platform consisting of two sites' – Artonvilla, near Musina, intended for light manufacturing, and Mopani, near Makhado, intended for heavy industry.
The zone claims to offer 'state-of-the-art logistics facilities promoting operational excellence'.
But though the MMSEZ was touted to bring in R40-billion in investments, so far only one company has made a firm commitment to invest.
A report by the chair of the MMSEZ board, Nndweleni Mphephu, to the Limpopo economic development, environment and tourism department shows how little has happened in what was to be a mega industrial park in the heart of the Limpopo Valley.
The report, dated 28 May, follows questions in Parliament and an oversight visit to the area by the Limpopo Economic Development, Environment and Tourism portfolio committee.
According to Minister of Trade Industry and Competition Parks Tau, R2.27-billion would be needed for bulk infrastructure on the site, and R1.07-billion had been set aside between 2020/21 and 2026/27 in the provincial budget.
In response to a question in Parliament in May from the DA's Toby Chance, Tau added that his department's Industrial Zones Programme was helping the MMSEZ with advisory support.
Some of the money has already been spent, much of it on consultants.
In his report, Mphephu gives a list of consultants, service providers and contractors who have benefited to date.
Spending of just more than R85.2-million was approved for consultants, of which just more than R67.5-million has already been paid to 17 consultants, including engineers, planners, quantity surveyors, project managers and horticulturists.
Just under R40-million has been paid to service providers, including Eskom.
According to the report, three contractors have so far benefited, including Tshiamiso Trading 1 and Tshiamiso Trading 2, which received a R200-million contract for roads and stormwater infrastructure and a R99.3-million contract for bulk sewer and wastewater treatment works.
A contract for R134-million was awarded to Rembu Construction, also for the construction of bulk sewer and wastewater treatment works.
But though some earthworks have been done by Tshiamiso on the northern site, there are no finished roads, electricity or water on either site.
After being paid just more than R50.4-million, Tshiamiso had to stop work on the northern site, after beginning bush-clearing, because the land belonged to a different organ of state and transfer had to take place first, the report says.
Tshiamiso has now terminated the contract and is claiming more money from the MMSEZ, citing non-payment for standing time. This dispute is currently in litigation.
Tshiamiso Trading is also accused of unlawfully removing white rock materials from another site to the MMSEZ site without the owner's consent or any formal agreement or compensation.
The MMSEZ southern site was gazetted as a Special Economic Zone in 2017, but it turns out that the northern site at Artonvilla has yet to be gazetted, according to a response by Tau to a question in Parliament. Tau said the Limpopo government had indicated it would submit a request before the end of June 2025 to gazette the northern site.
In his report, Mphephu noted fierce 'oppositions, dissenting views and pushbacks', mostly from environmental groups, over the southern site. Some of these were challenging the environmental impact assessment (EIA) in the Polokwane High Court.
But in the absence of an interdict, the report says, 'all activities leading to the development, including township establishment processes are expected to proceed'.
When President Cyril Ramaphosa publicly announced the MMSEZ in September 2018 following his return from the Forum for Africa and China Cooperation, it came with the promise of an initial investment value of more than R40-billion. To date, little of that money appears to have materialised.
Responding to questions in Parliament in May, Tau gave a list of investment pledges amounting to more than R8.64-billion, of which R2.1-billion has been verified and validated from eight prospective investors.
But according to the report, only the China-based Kinetic Development Group has come to the party, with a R16-billion promise of a ferrochrome smelter on the southern site, once township development on the site is approved, and subject to EIA approvals.
If investors do come, one of the biggest questions will be: where is the water going to come from in this semi-arid area?
The MMSEZ has approached the Water Services Authority (Vhembe) and the catchment management agency (the Department of Water and Sanitation, DWS) in the region to determine whether they have capacity, either from treated or raw water, to supply the developments.
According to the report, Vhembe agreed to provide the MMSEZ with some of its allocation for raw water to kickstart development on the northern site. The DWS said treated water could be brought from Zimbabwe by pipeline for the future development of the site.
'For the south, a few boreholes were drilled in order to start the development of the site. For further development, a pipeline needs to be built to connect to the bulk pipeline from Zimbabwe. Furthermore, two dams are earmarked to be constructed in future to specifically provide water to the site as it grows,' the report says.
According to the report, the MMSEZ has now implemented a 'turnaround plan', including a review of the design of roads and stormwater. A division of the Industrial Development Corporation has been appointed as implementing agent, with four professional engineers assigned to the MMSEZ full-time. Construction on the first projects will start in September, the report says. DM
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