A Rejuvenated City

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Over the past 10 years, Durban has undergone extensive growth and rejuvenation efforts that have included the development of luxury resorts and the gentrification of beachfronts, raising the city's potential, as a premier tourist and investment destination.

2006 figures indicate that KwaZulu Natal (KZN) hosted approximately 11.6 million domestic tourists. The province saw an additional 1.6m in international tourists, a 46% increase from the previous year.

Peter Bendheim, of Durban Africa, the official authority of the eThekwini Municipality, told OBG, "it is very important for places like Durban not to become just a gateway into other places. We want to be the epicentre of the attractions in ZwaZulu Natal and South Africa."

Tourism and its associated industries contributed a staggering $2.9bn to the KZN economy last year, with an estimated 154,000 jobs connected to the industry.

KZN, in collaboration with businesses in the province, has spent an estimated $3bn over the past 10 years in upgrading and expanding infrastructure in the province.

One of Durban's largest projects will be the construction of the new King Shaka International Airport. The announcement came after the resolution of a longstanding land dispute between the provincial government and the Airports Company of South Africa. Construction is to begin in early 2007 and end in 2009 at a cost of over $286m.

With the quickly approaching 2010 World Cup, the city has undertaken massive initiatives to ensure the success of the event. Of the numerous plans, the city anticipates spending $27m on infrastructure for the Richard's Bay industrial development zone, $155m on upgrading major roadways and approximately $22m on Durban harbour, the 9th largest port in the world, tourist facilities and a strategic plan for a railway system.

Obed Mlaba, the Mayor of Durban, expressed the importance of the city and the integral role its ports play in South Africa's economy. He told OBG that "we share almost the same economy as Johannesburg, because our ports feed commerce directly into Gauteng, the economic engine of South Africa. The governments and business have a vested interest in maintaining and upgrading all of these facilities."

The municipality is faced with the challenge of removing much of the red tape known to stifle development on a large scale. The eThekwini government has taken great strides to alleviate many of its cumbersome policies that might thwart investment. As well, the government has made efforts to collaborate on large initiatives, such as development of the waterfront and the two ports, with local businesses.

Gordon Hibbert of Moreland Developments indicated that the eThekwini municipality probably has a better capacity and performance record than most other South African local authorities, but a major concern of international investors is government bureaucracy. He went on to say that "international investors do not have as much patience as those in the local market. They know if they don't invest in South Africa, they can find opportunities in other markets."

The province has now drawn up a strategic plan to attract foreign direct investment (FDI). The government will host a three-day KZN International Trade and Investment Conference and Exhibition in October of this year aimed at bringing investors from around to world to experience firsthand all that the province has to offer.

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