28 February 2014

Rwanda: KSEZ Facilities Worry Industries As Relocation Deadline Expires

As the curtains falls on the deadline for firms to relocate from the Gikondo Industrial Park in Gasabo to the Kigali Special Economic Zone (KSEZ) in Kicukiro expires, some industrialists have expressed misgivings, arguing that it is not yet ready for full operations.

They say the zone is congested, has poor drainage system, while some of its structures are not tailored for them. They also say workers will find it hard to get accommodation facilities in the vicinity of the economic zone.

The deadline for factories to relocate to the special economic zone in the first phase of the exercise is today. But industrialists say lack of these crucial facilities will increase operational costs and risks.

"We expected to find everything in place, but unfortunately this is not the case. We have to transport workers to and from the industrial area as there are inadequate accommodation facilities in the area. This will increase operational costs," an industrialist who recently moved to the zone, said.

Suchir Bhatganar, general manager SRB Investments, a paper bag manufacturing plant in the economic zone, said it is important for the manufacturing sector to have a strong industrial eco-system to be economically viable.

"The sector needs technical support in terms of machinery, skills and other facilities to ensure smooth operations," Bhatgarnar said during a manufacturers meeting in Kigali on Wednesday.

However, Egide Mukono, the project engineer at the economic zone, dismissed claims that the zone is congested and lacks the necessary operational facilities for industrialists to operate smoothly.

"We worked with Ministry of Trade and Industry personnel, who guided us on design and space allocation for each industry, leaving enough room for each firm's expansion needs. The challenge, however, is that we are trying to put in place all the necessary infrastructure to make sure companies are not inconvenienced and are able to operate smoothly.

"We are doing our best to make sure that industrialists are comfortable, Mukono said.

Robert Bayigamba, the manufacturers' association boss, said it is important to address manufacturers concerns urgently to allow for smooth transition.

"The many challenges we are facing need collective efforts to solve them and not just individuals," Bayigamba said.

Last year, investors in the zone said they were ordered to pay Rwf1,500 per square metre of space as maintenance fees, a move they say is not good for business.

However, efforts to review the decision are underway according to Jeanne Isabella Gasana, the managing director Kigali Special Economic Zone.

The zone that sits on 276 hectares, and is expected to boost and help diversify economic activity, create jobs and increase investments in the country.

Over 100 businesses mostly warehouses, garages, factories were targeted for relocation from Gikondo Industrial Park in Gasabo. Fourteen factories were expected to relocate in the first phase, while warehouse and garage operators will shift to the zone in the second phase.

The relocation exercise is expected to be completed by end of 2016. So far, the completed part of the zone, which covers 98 hectares, has attracted 54 companies, according to John Bosco Sendahangarwa, the head of the Special Economic Zones Authority of Rwanda.

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