Kigali Special Economic Zone maintenance fees 'still a challenge'

Three years after a special committee was set up to study and come up with new maintenance fees for investors within the Kigali Special Economic Zone, the parties involved are yet to reach an agreement, the Senatorial Standing Committee on Economic Development and Finance heard Wednesday.
Senator Karangwa speaks during the meeting. Nadege Imbabazi.
Senator Karangwa speaks during the meeting. Nadege Imbabazi.

Three years after a special committee was set up to study and come up with new maintenance fees for investors within the Kigali Special Economic Zone, the parties involved are yet to reach an agreement, the Senatorial Standing Committee on Economic Development and Finance heard Wednesday.

At the time, the Committee that included the Prime Economic Zone authorities, Special Economic Zones Authority of Rwanda (SEZAR) based at Rwanda Development Board, three investors and Ministry of Trade and Industry officials had been given one month to come up with a maintenance fee agreeable to all parties.

The decision followed a disagreement that saw both parties disagree on a Rwf1500 maintenance fee per square metre per year that was meant to be levied effective December 2013. The Managing Director of Kigali Special Economic Zone, Jeanne Isabella Gasana, told the Senators that roads and other infrastructure had been set up to help investors to have a soft landing but they had adamantly refused to contribute to maintenance fees.

“We fixed the roads and other infrastructure and after consultation, we were told that roads cost a lot in terms of maintenance as early as one year after construction. Electric poles are knocked all the time, water pipes burst and cables get spoilt. We wrote to the investors asking them for a contribution and it was not received well. They felt like we were penalising them for constructing their factories in the zone. We have been discussing this issue for a long time and we have never reached an agreement,” she said.

Gasana also said that as the number of factories grows, so does the issue of cleanliness. She said that efforts to negotiate with Gasabo District on the issue had been fruitless.

Senator Chrysologue Karangwa advised that the fees paid to the Gasabo District authorities should instead be left to the Special Economic Zone authorities to help run the day to day operation of the area.

“One of the best ways to address the issue is by handling the zone as a specific entity without necessarily putting it directly under the district. When it comes to keeping the area clean, they probably need to start paying this money directly to you instead of paying it to the district,” he said.

Gasana, however, said that it had been difficult to convince the investors to do that since the district required them to pay or face fines. The district authorities, upon dialogue with her office, also rejected the idea of giving up the fees, leaving the economic zone authorities with no choice but to foot the bill, she said.

Senator Evariste Bizimana recalled that money paid for security and trash collection is not a tax but a result of decisions made by the city council authorities to help solve some social issues.

He, however, said that as long as the district authorities are collecting this money, they should be able to come and clean up the area.

“They (district) cannot take the money and not do anything in terms of cleaning up. You need to agree with them on the terms and if that fails, you need to involve the city council to have that issue fixed or we can as well ask them ourselves,” he said.

Development of the area

Gasana also updated the senators saying that the Ministry of Trade and Industry started off by building nine factories which are normally warehouses that stand on 2400 or 1200 square metres.

She also pointed out that five factories that will house Rwandex, Ameki Color, CBC, C&H Garments and Tolirwa are under construction, adding that the initial plan to move them this month had been postponed.

editorial@newtimes.co.rw

 

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