Private sector flags key hurdles in industrial parks

The Private Sector Federation (PSF) has highlighted key challenges affecting the development and management of industrial parks, citing gaps in infrastructure, land constraints, weak management systems, and limited investor incentives. The concerns were presented to the Senate committee on Economy and Finance on Wednesday, April 15, when PSF’s industrial cluster appeared before the Senate to discuss ways to fast-track infrastructure development in industrial parks. ALSO READ: What to know as govt sets deadline for factories to relocate to industrial zones Infrastructure gaps PSF said inadequate infrastructure remains a major obstacle, noting that some factories were established before essential services such as roads, electricity, and water were in place. “Many parks are not yet reached by adequate roads, electricity and water; in some places, factories started operating before infrastructure was in place,” Josiane Nsanza Usanase, the Chairperson of the Industry Cluster at PSF said. She explained that this forces companies to operate under difficult conditions and drives up operational costs. “When we ask for roads, electricity and water, we would love for the government to provide this infrastructure first,” she added. Nsanza also noted that it is difficult for private operators to jointly develop infrastructure. “When you ask the private sector to do it as a collective, it becomes harder... everyone ends up doing things on their own,” she said. ALSO READ: Rwanda to set up industrial parks for agro-processing Land constraints and rising costs The federation also pointed to high land prices in designated industrial areas, particularly in Kigali, driven by speculation. “When the government decides where the industrial park is going to be, people rush to buy the land, not because they want to use it,” Nsanza said. “The land ends up becoming an absurd amount of money, sometimes up to ten times the original price,” she added. PSF also noted that some residents still live within industrial park areas and that boundaries are not always clearly enforced. “We ask the government to help us implement the use of official gazette prices because this is in the collective interest of the country,” she said. Weak management and maintenance PSF said there is no coordinated system for managing industrial parks, and maintenance of existing infrastructure is often inadequate. “Even those that have the said infrastructure, when you look at the maintenance... it is nonexistent,” Nsanza said. The federation proposed establishing a single professional body to manage industrial parks and introducing structured maintenance systems. Investment challenges High investment costs and limited investor attraction were also highlighted as key concerns. PSF said a lack of infrastructure and delays in conducting Environmental and Social Impact Assessments (ESIA) in some parks negatively affect investment decisions. Senators raise concerns Senators raised questions about land pricing, enforcement of industrial zoning, and delays in developing some industrial parks. Senator Marie-Rose Mureshyankwano questioned rising land prices despite existing expropriation frameworks. “There are already established prices for expropriation. Is there a specific issue that is causing these prices to increase?” she asked. Committee chairperson Fulgence Nsengiyumva sought clarification on industries operating outside designated parks. “What is being done to ensure they are relocated into industrial parks?” he asked. Senator Frank Habineza also raised concerns about land pricing, while Laetitia Nyinawamwiza pointed to delays in developing areas already zoned for industrial parks. Industries operating outside parks Responding to the concerns, PSF industrial cluster Deputy Chairperson Martin Nyabudala said some industries operating outside industrial parks were established before zoning regulations were strengthened. “Those industries were set up earlier, and some of them are among the biggest we have,” he said. “Currently, you cannot establish industries outside industrial parks because it is not allowed,” he added. Nsanza said PSF is seeking closer collaboration with the government to address the challenges. “What we are trying to achieve is to see how the government and PSF work hand in hand in creating solutions,” she said. She added that the private sector is ready to take responsibility for maintaining infrastructure once it is in place. “When the industrial park is put together, then it is on us to maintain everything and ensure continuity,” she said.

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Private sector flags key hurdles in industrial parks