Private sector urged to support industrial park development

Senators have called for greater involvement of the private sector in developing infrastructure in industrial parks, saying reliance on public financing alone is slowing progress in delivering the facilities needed to support industrial growth. The call was made on Tuesday, July 7, during a presentation of a report by the Committee on Economy and Finance assessing the implementation of 2020 Senate resolution requesting the government to expedite the provision of infrastructure in industrial parks. ALSO READ: Private sector flags key hurdles in industrial parks Presenting the report, the committee chairperson Fulgence Nsengiyumva said the development and maintenance of national industrial parks have largely depended on the government budget, which has often been insufficient to meet all infrastructure needs. The Ministry of Trade and Industry (MINICOM) is responsible for managing national industrial parks, providing them with infrastructure and repairing damaged facilities using the government budget. However, this budget is often not enough, which affects the implementation of these responsibilities as required, Nsengiyumva said. The committee recommended strengthening Public Private Partnerships (PPPs) to accelerate infrastructure delivery and ensure industrial parks are properly maintained. ALSO READ: Govt to expropriate residents from four industrial parks Nsengiyumva said involving private investors would help address delays caused by limited public resources. There is a need to strengthen partnerships with the private sector in delivering infrastructure to industrial parks and repairing damaged facilities, he said. Senators said the need for alternative financing mechanisms is urgent as Rwanda seeks to increase industrial production under the Second National Strategy for Transformation (NST2). ALSO READ: Bugesera industrial zone investments hit $100 million Senator Pélagie Uwera said the progress made so far shows Government commitment, but additional support is needed to ensure industrial parks receive the infrastructure required by investors. There has been progress, even if it has been slow. The Government has shown willingness, but there is a need to support investors through public private partnerships in establishing infrastructure, she said. Senator John Bonds Bideri said Rwanda has made significant progress in improving the investment environment, including easier business registration and faster access to permits, but warned that infrastructure challenges could undermine those achievements. He argued that investors who benefit from industrial parks could also contribute to maintaining the infrastructure they use. There is a need to establish an industrial infrastructure maintenance levy, where a small percentage could be collected from investors to support maintenance of infrastructure, Bideri said. The committee noted that some industrial parks still face infrastructure gaps that require substantial investment, including roads, electricity systems, water networks and waste management facilities. The report found that road construction in several industrial parks remains below planned levels, while unreliable electricity supply continues to affect manufacturers. For example on roads, in Rusizi Industrial Park, only 1.5 kilometres of the planned four kilometres of paved roads have been completed. Huye has completed 1.3 kilometres out of the planned 4.2 kilometres, while Musanze has built only 0.5 kilometres of the planned 3.48 kilometres of paved roads. None of the planned two kilometres of earth roads in Musanze has been constructed. Senator Hadija Murangwa Ndangiza said infrastructure development should also involve better coordination among institutions to avoid unnecessary costs. There is a need for coordinated ways of establishing infrastructure. We have seen cases where roads are built and later damaged because other necessary infrastructure was not considered from the beginning, she said. She added that proper planning and coordination would ensure resources are used efficiently. The committee said that accelerating infrastructure development through partnerships would help Rwanda create industrial parks that are attractive to investors and capable of supporting the country's industrialisation targets. Under NST2, Rwanda aims to increase industrial output by 10.6 per cent annually, a target senators said requires faster delivery and proper maintenance of industrial infrastructure.

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Private sector urged to support industrial park development