South Africa's provincial minister of finance and economic affairs has announced plans to build a $27m film studio in Cape Town.

The minister, Ebrahim Rasoo, also called for expressions of interest from the private sector, which was followed up by a nationwide campaign in the country's press calling for tenders to build the studio.

Making the announcement at Cape Town's Sithengi film festival and market, he estimated that the film industry in Cape Town and surrounding areas was worth $218m (R2bn) a year in direct and indirect spin-offs.

Observers say the ideal location would be Culemborg, a disused rail yard bordering Cape Town's central business district that was identified as a venue for the athlete's village in the city's failed 2004 Olympic Games bid.

Martin Cuff, CEO of the Cape Film Commission siad a film studio will turn a seasonal $218m (R2bn) industry into a year-round one. "If it produces 12 feature films a year - and that's not an overly ambitious target - it will generate more than $436.5m (R4bn) and add 18,000 direct jobs."