Comprehensive and detailed market identification and demand projections, properly scaled and phased master plans, technical designs, project costs and benefits analysis, social and environmental assessments, institutional mapping and governance system analyses, off-site and on-site infrastructure requirement assessments and development plans, financial modeling and structuring plans, as well as economic impact modeling, are crucial to any final positive determination to proceed with an industrial park project.
There are different tools and methodologies for feasibility analysis, including UNIDO’s “Computer Model for Feasibility Analysis and Reporting” (COMFORT) to help decide final go/no-go decisions regarding whether to proceed with the project.
Industrial parks represent an effective industrial policy instrument because they can be used as a policy microcosm, either through the geographically-concentrated application of national industrial policy or through a dedicated subset of policies applied to industrial parks.
A successful industrial parks programme requires an extensive regulatory and institutional framework, which in turn fosters institutional collaboration and policy coherence if implemented successfully. The required policies and strategies will be developed based on the results of the pre-feasibility studies. Some of the relevant policies for industrial parks include:
Investment policies and legislation;
The development plan, including industrial policies;
Education, science, technology, and innovation policies;
Legal and regulatory framework;
International and regional, as well as bilateral agreements;
Specialized industrial park policies and regulations;
Institutional setup(developer, regulator and operator);
Sustainability and green development policies.
Because they are governed as often as not by a patchwork of national laws and policies, not all industrial park programmes have dedicated or specific enabling legislation. When they do, some of the areas’ industrial park legislation may cover includes the following:
Efficient industrial park location selection;
Connectivity infrastructure and facilities
Linkage, including between industrial parks and markets;
Infrastructure planning and development control frameworks;
Rights with respect to the establishment, use and operation of infrastructure;
Investor qualifications and plot allocation;
Cluster support programmes;
Environmental and social obligations of industrial park developers, operators and users;
Enhancing co-operation among enterprises in industrial parks, as well as between industrial parks and research centres; and
Designation and organization of the industrial park governance framework.
Administrative support mechanisms such as ‘one-stop shops’.
Some of the more successful industrial park programmes have developed institutionalized and important components of industrial park management, grounded in continuous listening to the industrial park investors’ experiences regarding how prevailing laws and regulations, performance requirements, incentives and administrative practices affect their operations, and what changes would support them in expanding (and thus their economic impact).
Industrial parks development should be based on well-defined master plans. Master planning has a lasting impact on how an industrial park develops, operates and is integrated into surrounding areas and communities. It defines the connection between the topography, land use, infrastructure, public right-of-way, buildings, social settings, and their surrounding environments. Master plans should be prepared based on existing public plans, as well as new site-specific surveys, investigations and analysis. Proper comprehensive master plans start with a feasibility study.
Major issues in industrial parks master planning:
Industrial parks should be configured and organized in accordance with the expected uses of the land within them. It is always an advantage for an industrial park to have different zones for different types of industrial and non-industrial activities. Zoning helps by encouraging on-site economies of scale in utilities infrastructure concentration and utilization, for instance as regards waste collection and treatment, wastewater recycling, internal transport networks and other amenities. It also smooths vehicular and pedestrian circulation by enabling clear movement patterns. Zoning within the park can be designed furthermore in such a way as to encourage industrial symbiosis for the utilization of materials, industrial water and energy by-products.
Typical segregated internal zones in an industrial park context:
Industrial zones for targeted sectors - these include industrial plots, industrial factory shells, and multi-story industrial units for non-polluting or medium-polluting industries;
Amenities zones - these cover information centres, training centres, R&D facilities, clinics, administrative buildings, shopping centres, fire stations, weigh stations, fire stations, etc.;
Special infrastructure zones - these cover certification laboratories, quarantine services, market intelligence unit, etc.;
Logistics zones - these cover loading and unloading yards, parking lots, packaging facilities, transportation hubs, cargo-handling centres, raw material collection and storage depots, goods storage warehouses, etc.;
Utilities zones - these cover solid waste collection centres, electrical sub-stations, CETPs, etc.;
Residential zones - these cover multi-format worker housing, guesthouses and hotels, etc.; and
Green zones - these cover green belts and buffer zones along the park’s boundaries, lawns, parks and water features, internal walkways between zones, etc.
A crucial factor in any infrastructure project is the quality of its engineering plans. Their planning and construction require the preparation of scale drawings and layouts, the selection of appropriate technology and equipment, site preparation and construction planning, project delivery scheduling, and approvals by the relevant authorities.
In recent years, the issue of environmental sustainability has become a key consideration in industrial park engineering. The main principles of sustainable engineering are shown below:
When engineering plans are ready, requiring an independent third-party review is a sound practice in order to ensure that the design meets all the pre-determined requirements and standards, and provides a sound basis for achieving the project’s objectives. The appropriate degree and level of review will depend on a number of risk factors, but even low-risk projects should, at a minimum, go through at least a basic peer-review process.
An industrial park provides concentrated critical infrastructure to support the development of the industrial sector. It is important to bear in mind that an industrial park’s infrastructure requirements may vary based not only on the type of industries likely to invest at the site but also based on the previously-existing infrastructure on-site or in the vicinity. Infrastructures categories crucial for industrial parks:
Infrastructure planning should be established based on existing plans, as well as on new site-specific surveys and assessments.Fundamental principles of infrastructure planning:
All the infrastructure should be modular, functional, cost-effective and flexible to take gradual occupancy into account;
Waste minimization/sustainable & green concepts;
Life cycle operation, and management costs, and value for money analysis from developer and unit occupant perspectives;
Phased development; and
The various infrastructure development options and alternatives.
The development of an industrial park requires the acquisition of a plot of land of the appropriate size, based primarily on phased occupancy demand projections, but also large enough to accommodate facilities and associated maneuvering areas with an efficient building layout, right-of-way and greenspace. The size of the plot depends on the planned number of enterprises, the requirements for ready-made factory shells and the extent of the common infrastructure and services needed on the site, as well as surface buildout ratios and setbacks.
The process for obtaining land may differ by city, province, or region within countries, and the acquisition process can take different forms depending on the region’s land ownership policy. Land ownership can be purely private, joint or state-owned. In some countries, the government provides land to industrial park developers free of charge or at a minimum cost as part of an incentive package, whereas in other countries the land is sold, made available on a concession basis or leased, under varying terms and conditions.
Relevant considerations in land acquisition:
Preference for parcels held by one or a few owners or that do not require assembling parcels, in order to avoid delays during the acquisition process;
Consideration of possible future expansion, in terms of site size and zoning;
Environmental and social impact considerations;
National legislation and international guidelines and practices regarding the acquisition and/or expropriation;
Integration with local and regional planning; and
Consideration of ancillary industries.
Environmental and Social Impact Assessments (ESIAs) must underpin site master planning, and predict and evaluate a project’s environmental and social impacts on the ecosystem, bio-physical and human environment, as well as propose any required project impact mitigation or management plans and, where appropriate, rehabilitation and/or compensation plans
ESIAs assesses the project’s effects on:
Heritage sites and social services in the host and adjacent communities
ESIAs should, in addition, lay the basis for ongoing assessment of socio-economic and environmental impacts throughout the project’s lifespan, including during:
Pre-construction activities (e.g., relocation of people displaced due to the project, etc.);
Construction activities (e.g., land clearing and site preparation, infrastructure construction, etc.);
Post-construction operational activities (e.g., maintenance, etc.).
The environmental assessment covers baseline data regarding:
Site soil and hydrology characteristics
Projects’ anticipated impacts on air quality, noise levels, water quality, etc.
Connectivity and/or buffer zones to maximize the off-site and on-site synergies for adjacent communities.
Social impacts in terms of employment, community welfare and inclusion, safety, heritage and identity, through a proper Socio-Environmental Management Strategy.
The ESMP should be prepared either as an integrated element of the ESIA or as a separate document. The plan should set out the measures required to maximize the project’s benefits as well as to minimize and/or remedy any adverse impacts or externalities. It ensures that the environmental and social impacts and risks identified in the ESIA process are effectively managed. The ESMP, amongst other things, addresses the following:
Setting out an environmental and social management measures action plan;
Defining responsibilities for specific actions, timeframes for implementation, and associated budgets;
Actively engaging with the affected people and communities;
Identifying monitoring mechanisms in relation to project social and environmental performance, and compliance with related statutory requirements; and
Outlining capacity-building requirements for the effective implementation of the plan.
Many Development Finance Institutions (DFIs) have policies, guidelines and tools to effectively integrate environmental and social considerations into their operations that can help industrial park developers in preparing these assessments and plans.
The Asian Development Bank's (ADB) current safeguards policy builds upon the three previous safeguard policies: the Involuntary Resettlement Policy (1995), the Policy on Indigenous Peoples (1998) and the Environment Policy (2002). In addition, environmental safeguard elements are included in ADB’s water, energy and forestry policies. ADB carries out screening and categorization at the earliest stage of project preparation, in order to ensure that they (i) reflect potential impacts; (ii) commit the appropriate level of resources for safeguard measures; and (iii) meet disclosure requirements.
The World Bank Group (WBG) has an environmental and social framework that sets out the Bank’s commitment to sustainable development. The framework requires borrowers to conduct ESIAs on projects proposed for World Bank support. The World Bank’s safeguard policies recognize the importance of borrowers’ early and continuing engagement and meaningful consultation with stakeholders, including communities, groups, or individuals affected by proposed projects. The World Bank Group also requires the provision of a grievance procedure to receive and facilitate resolution of the concerns of project-affected parties.
The European Investment Bank's (EIB) environmental and social safeguard policies, and the principles, practices and standards they embody, are based on the EU’s 2006 Declaration on the European Principles for the Environment (EPE). Environmental considerations are taken into account at all stages of the project cycle. All projects financed by the EIB are subject to an Environmental Assessment (EA), normally carried out by its own staff, but, if by others, according to EIB requirements. Social issues now are also assessed and focus on labour standards, occupational and community health and safety, population movement and resettlement, minority rights (including those of indigenous people, women and vulnerable groups), public consultation and participation, and cultural heritage.
The African Development Bank (AfDB) adopted its Environmental Policy in 1990/2004, a set of Environmental and Social Assessment Procedures (ESAPs) in 2001, and an Involuntary Resettlement Policy (IRP) in 2003, clearly setting out AfDB’s environmental and social safeguards. The 2003 IRP pays particular attention to the cultural or religious significance of land, the vulnerability of the affected populations, and the availability of in-kind replacement for assets that may have important intangible implications. The AfDB requires a borrower to develop a Resettlement Plan (RP), with active participation and in consultation with displaced persons and host communities, where physical displacement and loss of economic assets are unavoidable. Expropriated assets should be compensated at “full replacement” cost prior to commencement of project activities.