South Africa: DTI adjusts incentive programme for capital project studies
The Department of Trade and Industry (DTI) said on Friday that it had amended the capital projects feasibility programme, previously the South African capital goods feasibility study fund.
The DTI explained that the revised programme, which was intended to facilitate feasibility studies likely to lead to projects that would increase South African exports, stimulate growth for the local capital goods and services sector and allied industries, would come into effect on the first of next month.
The value of the rebate for any qualifying feasibility study is capped at a maximum of R5-million.
This component is available to registered legal entities in South Africa and provides a rebate of 55% of the total costs of the feasibility study for projects in Africa, and 50% for those outside Africa.
Certain key changes would be effected, firstly, the percentage of local content in the feasibility study - in terms of goods and professional services - which should ideally be 50% would now be at the discretion of the adjudication committee.
Secondly, the rebate would then be proportionally reduced, depending on the proposed percentage of local content.
Programme manager Donald Mabusela told Engineering News Online that the adjudication committee was comprised of about eight industry experts from the mining sector and across a "broad spectrum" of engineering fields.
Mabusela explained that applications would be judged on a "case by case basis", and that even if the feasibility study did not achieve 50% local content, but it promoted broad-based black economic-empowerment (BBBEE), it would be considered "favourably".
He commented that before the percentage was "strictly 50%", but now if an application's BBBEE component was good, it would have a "strong chance of being supported by the programme."
The rebate given would relate to the level of BBBEE credentials - the better the credentials, the higher the rebate, in order to promote empowerment initiatives, which is one of the DTI's objectives.
The DTI said that it aim was to attract higher levels of domestic and foreign investment, and to strengthen the international competitiveness of local business.
Other objectives involved stimulating project development in Africa and, in particular the Southern African Development Community countries, as well as support for the objectives of the Nepad, and promoting links with and development of small, medium and micro enterprises and BEE businesses.
