SECTION 4: LOCAL ECONOMIC DEVELOPMENT 4.1 Adoption of LED Strategy
4.5 LED Implementation Plan
The implementation of the strategy of the District seeks to enhance the strengthening the monitoring and evaluation role of the various forums currently operating in the District, particularly the District LED Forum, District Support Team, District Agricultural Forum, District Tourism Organisation for joint planning and information sharing. The capacity of the District to implement the strategy has also been identified for enhancement. The establishment of Local Action groups below the District Support Team which would
facilitate and support the District Support Team at a local municipality level has also been identified for intervention.
During the next five years, the District will focus on the following economic development programmes which depend on the support and cooperation between various stakeholders and strategic partners:
♦ Small town revitalisation (Sterkspruit vision 2016, Ugie, Maclear and Mt Fletcher)
♦ Local supplier development programme
♦ Tourism and heritage routes development
♦ Irrigation schemes (Senqu , Maletswai and Elundini)
♦ EPWP, CWP and Mass job creation
♦ Elundini, Gariep Residential Housing Project
♦ Business Incubation Hubs
♦ Elundini Maize Meat Hub
♦ Youth development initiatives (including other Special Groups)
♦ Aliwal Spa Resort
♦ Aliwal Private Hospital
♦ Vision 2016 for Sterkspruit
♦ Senqu Plastics
The District Strategy is implemented using a combination of both existing internal and external structures within the Ukhahlamba Municipality. The primary external delivery structure that will support the Strategy will be the Joe Gqabi Economic Development Agency, JoGEDA. The following are programmes that are prioritised for JoGEDA to implement over the next five years:
a) Aliwal Private Hospital / Joe Gqabi Memorial Hospital b) Aliwal Spa & Gariep Tourism Development
c) Senqu Plastics Manufacturing d) Business Incubator Hubs
e) Elundini Integrated Middle Income Housing Development – Maclear, Elundini f) Maize-Meat Hub Feedlot
g) Senqu Commercial Property Development
A brief description of each of these projects is outlined below.
a) Aliwal Private Hospital / Joe Gqabi Memorial Hospital
The project involves the development of a 150-200 bed Private Hospital in Aliwal North. The project was conceptualised as part of a process of filling a big gap that exists in Joe Gqabi District for a state-of-the- art healthcare facility that would complement the public healthcare facilities currently operational in the area.
The Private Hospital would be privately owned, funded and managed. The designated site / land for the private hospital is currently owned by Maletswai Local Municipality. The land has not yet been
independently valued. It is in the process of being rezoned for institutional use. The Prefeasibility Report prepared to cover certain elements of this envisaged development recommended that the District use the land as a lever to negotiate and ensure its economic participation in the envisaged development, as the project would deliver requisite services and infrastructure to the District. The Pre Feasibility Report further recommended that the land be sold / transferred by appropriate treaty from Maletswai Local Municipality to Joe Gqabi District Municipality, and from the District Municipality to the Development Agency. The District Municipality would thus delegate the Development Agency to ensure the District’s effective economic participation in the project, utilizing the land as an economic lever.
The socio-economic impact of implementation of this project will be the enhancement of the economic development and investment into the region through:
♦ Access to healthcare for many.
♦ 200-250 Bed health facility.
♦ +-R250m Capital injection.
♦ Employment creation +- 100 permanent jobs
♦ Inward migration.
♦ Skills development.
♦ Revenue enhancement for Maletswai Local Municipality.
♦ Enhanced economic development and investment into the region.
♦ Improved infrastructure development.
♦ Financial sustainability for JoGEDA.
b) Aliwal Spa & Gariep Tourism Development
It is evident that the development of the greater Gariep region as a tourism destination should take cognizance of the substantial increase in international arrivals and develop products which are aligned to the needs of this market. The N1 motorway between Johannesburg and Cape Town is one of the most important road linkages in SA. As such the Lake Gariep region and the Aliwal Spa is a significant destination as it is located almost equidistant from Cape Town and Johannesburg.
Moreover, the development of the Aliwal Spa as a key attraction into the Eastern Cape, and the potential for this region has not yet been realized. The Aliwal Spa has undergone several stages of development, from development of pre- and feasibility studies, business plans and applications to Treasury as a PPP.
With several processes of attracting several investors, however none yet signing to take on operational role of running the agency. The Spa remains a draw card as a natural hot water source, with medicinal properties.
The project is Gariep Tourism Development incorporating the 3 tourism in the Gariep area i.e. Lake Gariep Resort, JL de Bruin Dam and Teebus development. All these projects have a potential in attracting tourists to the region but product development remains lacking. There is diversity of adventure tourism activities which include a variety of water sports, wild life and ecotourism and all are significant tourism icons in the Gariep region but require a concerted effort to market, develop and operate to ensure financial sustainability.
The main aim is to upgrade, expand and appropriately market all 3 projects for the benefit of Gariep municipality and its municipality. As would the Aliwal Spa, which is currently being upgraded through a R20m grant from NDT and an addition R4.9m from the provincial government. In a region where poverty persists and combined with a high unemployment rate the tourism development has enormous potential to significantly reduce these indicators.
Lake Gariep Resort is located on the southern side of Lake Gariep, 10 kms to the north of Venterstad on the R58 and is wholly owned by Gariep Municipality. It consists of 2 self catering chalets that can sleep up to 8 pax with full equipped ablution facilities, day visitors with a swimming pool, the camping facility and a slip way.
The JL de Bruin Dam is located just about 5 kms from the town Burgersdorp and it consists of caravan and camping sites, 2 x 6bed self catering chalets or cottages with fully equipped ablution facilities and a slip way.
The Teebus Resort is located 10km outside the town of Steynsburg and lies adjacent to the Orange-Fish River Water Transfer Canal. It was developed in the late 1960s to house the foreign and local workers who build the Orange-Fish River Water Transfer Canal. The resort is currently owned and managed by the National Department of Water and Environmental Affairs.
The socio-economic impact of implementation of this project will be the enhancement of the economic development and investment into the region through:
♦ Increased tourism demand and numbers of foreign and local visitors
♦ Product development
♦ Enhanced branding and marketing of the Eastern cape Highlands as a preferred destination
♦ Financial sustainability
♦ Enhanced economic and investment into the region
♦ Improved infrastructure development
c) Senqu Plastics Manufacturing
Senqu Plastics is a poly vinyl chloride (PVC) plastic pipe manufacturing project. PVC pipes are the most used pipe product in the construction, civil engineering, plumbing and general building industries. The product requires a moderate level technology to produce it. The venture can develop the manufacturing capacity in a short space of time. The product itself is environmental friendly.
The plastic pipe market in South Africa is worth about R1.7 billion, and the Eastern Cape Province market is estimated at R245 million. The national market is semi-saturated with about 10 major manufactures.
Four of the manufacturers control 80% of the market. The main competitors are DPI Plastics, Marley Pipe Systems, Petzetakis Africa, Amitech and Gazelle Plastics. The four manufacturers altogether accounted for approximately R1.36 billion of sales revenue in year 2006. They are well established and will be formidable rivals.
The socio-economic impact of implementation of this project will be the enhancement of the economic development and investment into the region through:
♦ Improved infrastructure development
♦ Promotion of industrialization and development value
♦ Creation of employment for unemployed youth
♦ Acceleration of private sector investment into the region
d) Business Incubator Hubs
Business incubators are programs designed to accelerate the successful development of entrepreneurial companies through an array of business support resources and services, developed and orchestrated by incubator management and offered both in the incubator and through its network of contacts. Incubators vary in the way they deliver their services, in their organizational structure, and in the types of clients they serve. Successful completion of a business incubation program increases the likelihood that a start-up company will stay in business for the long term.
The role of SMMEs in growth development is recognised by both developed and developing countries.
The Small and Medium, Micro-Sized Enterprise (SMME) sector is one of the key areas for job creation and economic growth in South Africa. However, with the widely accepted estimate that 9 in 10 SMMEs in South Africa fail within the first two years of operation, it is no surprise that government is establishing support structures to promote the sustainability of small businesses.
Business incubators are not a new concept, and have steadily become entrenched as successful aids to small businesses and entrepreneurs. Entrepreneurial hubs or incubators centralise a knowledge base into which entrepreneurs can tap. Networking with fellow incubator tenants can yield effective and lucrative partnerships and experience, and many incubators also offer networking or funding opportunities outside of their direct scope.
The socio-economic impact of implementation of this project will be the enhancement of the economic development and investment into the region with a view through:
♦ Improved spatial distribution of support centres;
♦ Supply of regional offices with technically equipped staff;
♦ Design of programmes appropriate for the informal economy;
♦ Consolidation of business plan and mentoring databases;
♦ Improved access to finance; education and training;
♦ Developing partnerships to optimise efforts;
♦ Allocation of resources towards improving business linkages, commercialisation and improving competitiveness;
♦ Implementation agreements to be signed between the partners in order to roll-out.
♦ Enhanced economic development and investment into the region.
♦ Improved infrastructure development.
e) Elundini Integrated Middle Income Housing Development – Maclear, Elundini
Development of 90 hectares of land on ERF 3468 Maclear (donated to Elundini Local Municipality by PG Bison / Steinhoff). The land is suitable for middle income housing development. In support of this
development, various studies undertaken by external service providers and Elundini Local Municipality and JGDM technical teams and concluded that:
♦ Bulk services, particularly water, present several challenges. These could only be overcome with increasing supply. Increasing water demand without increasing water supply will lead to increases in water shortages and deterioration in water quality.
♦ Risk: Water borne sewerage and septic / conservancy tank system would not function without adequate water supply.
♦ Bulk sewerage system is available and currently under-utilised.
♦ Bulk supply of electricity available, as a result of ongoing electrical upgrade and implementation of Maclear Master Plan.
♦ Project will improve the municipality’s revenue base, and provide needed human settlements.
The Development would need to undertake a structured analysis and further investigation of several elements of this project, in close collaboration with the technical team of the Local Municipality and that of the District Municipality. The investigation would also look into the economic merit and the need for such housing development in the Elundini municipal area. The availability and conditions of road infrastructure also needs to be investigated and linking the developments with business nodes and other economic development in the area
f) Maize-Meat Hub and Feedlot
Primary objective of the proposed business plan is to establish sustainable maize meat hubs in high potential areas in need of economic growth and generation of poverty alleviation. The secondary objectives of the rollout are the following:
♦ Identify areas with sustainable maize and cattle potential to create a flow of products through the maize meat hub
♦ Identify and accommodate potential role players to ensure sustainable feed and cattle production
♦ Identify and locate all necessary role players for running a maize meat hub successfully
♦ Determine the optimum marketing channels for the final product
♦ Locate role players who are active in farmer training (crop production) animal production, marketing, financial planning as well as sustainable production practices.
♦ Identify and evaluate the infrastructure necessary for a specific maize meat hub in a specific area.
The socio-economic impact of implementation of this project will be the enhancement of the economic development and investment into the region with a view through:
♦ Enhance economic development and investment into the region
♦ Improve infrastructure development
♦ Growing the agricultural sector
♦ Job creation
♦ Food security
g) Senqu Commercial Property Development
Various, multiple commercial property development opportunities in the process of being identified and fully investigated in various areas and towns of Senqu Local Municipality. Various opportunities identified in the following configurations:
♦ Small to medium shopping centres;
♦ Apartments
♦ Townhouses to be sold on sectional title basis, or rented;
♦ Rental housing units
Feasibility investigations not yet fully undertaken on any of the identified opportunities. Opportunities are broadly at information gathering stage.
Pre and detailed feasibility investigations to be undertaken by the Development Agency in establishment phase.