South Africa: Nasrec Could Become Country's First Tax-Free Media City

Investment

THE idea of an Egoli-wood south of Johannesburg is more than just a dream for Johannesburg Expo chairman Andrew Mthembu. He says they have been considering the idea of creating a media city in Nasrec for some time and he recently went to Hollywood to explore the idea. There, many filmmakers were keen to invest in SA, but government concessions and connectivity were an issue.

The International Broadcast Centre (IBC) to be built at Nasrec may kick-start the development of the entire precinct south of Johannesburg into something akin to Dubai's Media City, the multinational regional media hub in the United Arab Emirates.

The idea to create something like Dubai's Media City sounds ambitious, to say the least, but the idea was aired this week by Communications Deputy Minister Roy Padayachie at the City of Johannesburg's announcement that it had beaten bids by Cape Town and Durban to host the IBC for the 2010 Fifa World Cup.

Dubai's Media City was established in 2001 as a tax-free zone and regional hub for media organisations ranging from news agencies, publishing, online media, advertising production and broadcast facilities. By the end of 2006, more than 1200 companies had invested in it and it hosts more than 160 satellite-TV stations.

Johannesburg is already the primary broadcasting hub for international and local television and radio as well as home to almost 60% of all information, communications and technology enterprises in SA.

Providing a tax-free zone in the Nasrec precinct may be asking too much from the central government, but judging from this week's announcement there is no question that the necessary telecommunications infrastructure will be in place at the IBC, which will become a legacy of the World Cup.

One of keys to the success of the Dubai Media City was its tax-free status. Mthembu believes that if the IBC is going to create jobs, attract investment and develop skills, the government may be able to consider support mechanisms to lure investors.

More than R400m will be pumped into the IBC's telecommunications facilities , R120m of which will be funded by the city . Most of the city's funding will go towards rent at Nasrec and it will also provide essential services such as uninterrupted electricity supplies, water, security and transport.

Sibongile Mazibuko, responsible for organising the city's 2010 programme, said Johannesburg had partnered with the national transport, communications, public works and sport departments, as well as the private sector, to invest in the IBC.

It will become the nerve centre for all TV operations during the World Cup. Nasrec, one of the city's largest exhibition centres, will see thousands of broadcasters based there for six weeks during June and July 2010. In the 2006 World Cup in Germany , about 13400 television commentators, presenters, camera crews and technical staff made use of the IBC in that country.

Johannesburg executive mayor Amos Mosondo says the total spend projected to the city due to the hosting of the IBC is R319,9m, based on the fact that existing business tourists spend on average R2002 a day in SA.

According to Padayachie, the IBC will boast the most up-to- date digital broadcast telecommunications systems available. Included will be a fibreoptic cable network and satellite teleport infrastructure that will support 40GB-a-second transmission capacity, which will enable broadcasters to transmit in high definition.

The IBC will provide additional thrust to the city's long-term plans to revitalise the south of the city.

"In this city, we do not regard the 2010 Fifa World Cup as a once-off event ... Many of you will be familiar with the significant changes that are taking place in Soweto with the tarring of all roads, the rapid construction of shopping centres and entertainment complexes and growth in commercial activities. These developments in the Nasrec precinct will, no doubt, accelerate the rise of the south," Masondo says.

The city approved the Nasrec precinct as a development node to bridge the apartheid spatial planning gap between the south and north of Johannesburg in 2001. Nasrec is 420ha in size and home to Soccer City, the Johannesburg Export Centre and the Crown Mines Golf Course.

The partnership has already resulted in the private sector partnering with the city council in investing about R1bn for the development of 500 residential units and a four-star hotel .

Mthembu says the area already attracts a great deal of residential housing for middle-class young black people who do not wish to live in townships, but also do not want to live too far away from their jobs and townships.

A recent study by Deloitte showed the demand for housing was positive and there was a need for vibrant entertainment facilities in the area, similar to those provided by Melrose Arch. The IBC will go a long way to attracting this kind of development capital, says Mthembu

The IBC will change the image of the precinct to a "safe, hi -tech node" that will attract more businesses, which can make use of the telecommunications infrastructure. This should stimulate further residential, entertainment and shopping development.

Business Day (Johannesburg) 25th April 2008