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Umhlosinga Development Agency (UMDA)

UMkhanyakude District Municipality

BUSINESS PLAN 2015/18

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ACRONYMS AND ABBREVIATIONS USED IN THIS DOCUMENT

UMDA Umhlosinga Development Agency

KZN KwaZulu-Natal

DoE Department of Education

DoA Department of Agriculture

ETEA Department of Economic Development, Tourism and Environmental Affairs

COGTA Co-operative Governance and Traditional Affairs

NSNP National Schools Nutrition Program

UKDM UMkhanyakude District Municipality

SMME Small, Medium and Micro enterprise

EXCO Executive Committee of the UMkhanyakude District Municipality

SLA Service level Agreement

MoU Memorandum of Understand

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TABLE OF CONTENTS...............................................................................pages EXECUTIVE SUMMARY……………………………………………………………..4 INTORDUCTION………………………………………………………………………6 Concept and Background…………………………………………………………..6-7 Locality………………………………………………………………………………8-11 The Role of the UMDA…………………………………………………………..11-12 Past Performance on Key Areas………………………………………………..13-17 Vision, Mission and Strategic Objectives………………………………………17-19 Swot Analysis……………………………………………………………………..20-21 STRATEGIC FOCUS AREAS……………………………………………………....22 Business Concept……………………………………………………………….22-27 Agribusiness Projects…………………………………………………………...28-30 Tourism Projects…………………………………………………………………31-32 Infrastructure Projects……………………………………………………………33-34 Urban Development Projects……………………………………………………34-35 Marketing Plan and Communications………………………………………….35-41 Information Technology Plan……………………………………………………41-42 Risk Management Plan……………………………………………………….....42 MANAGEMENT AND ORGANISATIONAL STRUCTURE………………………43 UMDA Board……………………………………………………………………...43-45 UMDA Team………………………………………………………………………….45 UMDA PMU…………………………………………………………………………..46 Organogram………………………………………………………………………47-48 Key Role Players…………………………………………………………………49-50 Governance and Leadership……………………………………………………50-51 FINANCIAL MODEL…………………………………………………………………52 Funding Requirements Capital Expenditure Operational Expenditure Cash Flow Analysis CONCLUSION

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1. EXECUTIVE SUMMARY

1.1 INTRODUCTION

This business plan culminates from the 5-Year Strategic Plan of the

uMhlosinga Development Agency (UMDA). UMDA has been in operation for

seven years and during this time built up a significant portfolio of projects

and plans. The most important of these plans were reviewed during a two-

day strategic planning workshop in order to give direction and impetus to the

future plans of the Agency.

The UMkhanyakude District Municipality is located in the Kwa-Zulu Natal. It

is situated in the North-Eastern part of KwaZulu-Natal, extending from the

uMfolozi River up to the Mozambique border, being bordered on the east by

the Isimangaliso Wetlands Park which encompasses the entire coastline

onto the Indian Ocean. It consists of 5 local Municipalities, which will be

reduced to 4 local municipalities from the 2016 local government elections

with the amalgamation of Hlabisa and Big 5 false Bay Municipalities into one,

which are shown on the diagram below:

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The number of individuals actually employed within the various local

municipalities is particularly low, and there are therefore high dependency

ratios and generally great amounts of poverty and low levels of economic

activity.

UMkhanyakude district municipality does have significant economic

challenges and that they intend investing significant resources into turning

the economy around and creating opportunities for growth in the future. The

UMDA, as the Economic Development arm of the UMkhanyakude District

Municipality specifically needs to stand up and be counted in the creation of

economic opportunities.

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Although, the District’s economy is the smallest in provincial comparative

terms (eg. less than 5% of the size of the eThekwini municipality in

2011), and growing from a small base, however the economy experienced

significant growth in excess of 9% per annum, especially in the period from

2000 onwards. Two dominant local economies within the district are the

Mtubatuba and Jozini Local Municipalities, accounting for approximately

R1.9 and R1.7 billion of GVA in 2011 respectively. The dominant economic

sectors in UKDM as measured by GVA is the retail, catering and

accommodation sector accounting for R1.45 billion in 2011, the

manufacturing sector (R1.37 billion), and the general government services

sector (R1.34 billion).

UMkhanyakude has outstanding potential for agriculture and tourism

development, with the district having a wealth of natural beauty and

outstanding landscapes, as well as a favorable climate and fertile soils for

major agricultural production. The district is closely associated with the

iSimangaliso, “Maputaland”, the Makhathini Flats and the Pongola-

Poort/Jozini Dam (constructed in the 1970’s with the intention of unleashing

the agricultural potential of the area).

Given the scarcity of development in the major part of UMkhanyakude, the

district and local municipalities operate off an extremely low tax base and

LED has therefore not been funded or contemplated as a mainstream activity

of local government in the area.

There is very little foreign direct investment in the area; investors lack

appetite for investments in the area and it is very expensive to establish

developments in the district due to legislative requirements, lack of

infrastructure, lack of development plans and unavailability of land. The

Environmental Impact Assessments coupled with further requirements for

developments within Isimangaliso Wetland Park and its buffer zones has

further exacerbated the lack of investment apetite.

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The Role of the UMDA is to act as an agent for and on behalf of the District

Municipality in implementing economic, social and environmental policies

and projects, as identified by or agreed with the District and local

Municipalities of UMkhanyakude. UMDA is required to co-ordinate the

implementation of a sustainable, long and short term District Development

Program; including its spatial, economic, social and environmental

dimensions, it’s regulatory, budgetary, financial and legal implications and its

social and economic consequences. UMDA is also required to provide the

District of UMkhanyakude with a ‘one-stop’ contact point for access to

possible development funding or technical assistance, as well as information

on the priorities and consequences of the implementation of the

UMkhanyakude District Development Program.

Vision, Mission and Strategic Objectives

Based on the above analysis of the challenges, opportunities and key past

performance of UMDA, the following Vision, Goals and Objectives of UMDA

have been developed. The Vision, Goals and Objectives are related to that

of the uMkhanyakude District Municipality. In this respect the Vision of the

uMkhanyakude District is: “To be a metro by the year 2030”.

The uMhlosinga Development Agency vision follows from that of the District

and is: “To be the preferred partner providing cutting edge investment

solutions to economic development in uMkhanyakude.”

The Mission of UMDA is:

“To co-ordinate, plan and manage the implementation of a locally driven

program of catalytic projects, to fast track the development of the local

economy of the district of uMkhanyakude.”

The Goals of UMDA that flows from the Vision and Mission Statements and

based on the challenges and opportunities are the following:

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1. To promote sustainable commercialization of agriculture and

establishment of agri-business industries in the district;

2. To develop a world class tourism sector;

3. To develop settlements that promote urbanization and industrialization;

4. To develop world class catalytic infrastructure that promotes economic

development;

5. To develop institutional capacity of the agency, at all levels, with the

capacity to effectively implement and raise funds for catalytic projects and

operational needs.

In implementing the Goals and Objectives UMDA will be providing

“consulting services” such as undertaking feasibility studies; preparing

business plans; undertake environmental and planning studies aimed at

gaining the required approvals; prepare funding applications and put project

and programme management systems in place when and where required.

UMDA will also manage capital projects on behalf of the District Municipality,

Local Municipalities and other government departments and in return will

charge a 10% development fee. UMDA will manage internally certain

strategic projects, in order to raise enough capital for operational expenses

and feasibility studies.

Finally, UMDA will also manage strategic economic investments on behalf of

the District Municipality and in return charge management fees and be

entitled to a portion of dividends as agreed to between UMDA and the

District Municipality.

1.2 STRATEGIC FOCUS AREAS

Business Concept

Investment into the district is very slow and foreign direct investments are

even worse, whilst there is some investments happening in property

development especially on shopping centers. There is limited investment in

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the industrial sector, whilst an investment into the tourism sector is minimal

and not in line with the transformation agenda of the country. A number of

factors could be attributed to these challenges, including planning,

availability of land, environmental authorisations, development approvals and

lack of infrastructure.

UMDA’s strategy is therefore to level the playing field for investors, thus

lowering the costs of investment in the district and promoting foreign direct

investment. In order to achieve the above, we have identified a number of

nodes for development, these ranges from tourism nodes, agricultural nodes,

urban (town) development nodes and industrial development nodes. UMDA’s

responsibility is to secure land, obtain environmental authorizations, obtain

development approvals, develop infrastructure and promote these nodes for

investment. Our projects’ portfolio is therefore structured to unleash the

economic potential of the district through unlocking the stumbling blocks to

investment.

We intend over the next ten (10) years to implement interventions that will

assist in creating over 100 000 Jobs in the district, facilitate investments of

over R10 billion, facilitate the establishment of over 50 000 Units (to increase

rates base of municipalities), to facilitate training of over 10 000 beneficiaries

and in the course support the development of at least 10 millionaires from

the district.

The UMDA will continue to engage the Private sector, Local, Provincial and

National Government in the identification of projects that would achieve this

goal. The establishment of networking relationships with National and

Provincial Developments, Finance Institutions and Agencies is pivotal to

assist in achieving both the Technical and Financial objectives of the UMDA.

Guiding Principles

The following guiding principles have been developed and are the foundation

for decision making in UMDA. It informs how the Agency is to prioritise and

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select its projects and assess its progress. The guiding principles are:

1. The nature and extent of the employment and income generation

ability of the economic sustainable interventions identified;

2. The nature and extent of external and internal, public and private

sector investment that the intervention can attract;

3. The multiplier impact of intervention through the creation of new and

additional backward and forward linkages within the District;

4. Building the capital asset base (economic infrastructure) of the District

on which further future interventions can be built;

5. Building the entrepreneurial, SMME, cooperative and small informal

economic base capacity of the District;

6. The ability of the interventions to empowerment of youth, women and

vulnerable groups and the contribution of the intervention towards

poverty eradication;

7. The ability of the intervention to advance further business

management principles also making allowances for the Agency to

generate an income for future investment and funding operations.

The application of the Guiding Principles to project selection will lead to the

identification of a multi-dimensional portfolio of projects rather than a

simplistic listing of priority projects. This will assist UMDA to strategically plan

its economic interventions to deliver different impacts at different time-scales

and with different risk profiles. This is best illustrated in the following diagram

that shows how UMDA will identify its strategic interventions in the District.

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Catalytic Projects and Actions

Projects come at various stages, forms and shape. However it has been agreed

that in principle our projects will follow the following projects pipeline.

a) Identification, inception and registration of catalytic Project

b) Development of concept

c) Pre-Feasibility study and report

d) Project packaging

Feasibility study

Business Plan

Land Security

Development approvals

EIA approvals

e) Fundraising & investments promotions

f) Implementation

Project Management

Construction & commissioning

Operations

In assessing the projects and action plans UMDA will implement a Process Flow

program to identify catalytic projects and actions and, package them to ensure

that a variety of interventions are planned to deliver on a sustainable basis.

Additional projects to be approved by the Board, through the pre-approved

selection criteria (Matrix).

The immediate projects and actions that UMDA will be focusing on are listed

below. This list of projects and actions will be reviewed and updated on a

regular basis together with its Board and with its shareholder, the District

Municipality of uMkhanyakude. The list relates to the strategic Goals and

Objective areas identified:

Projects’ Implementation Masterplan

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Based on the strategic framework of Goals and Objective, UMDA is in the

process of developing a Master Plan of catalytic projects and actions to lead to

the development of the District. The purpose of the Master Plan is:

To provide a projects implementation master plan for the district up to 2030;

To provide maps for different sectors and targets;

To provide 3D models and costing of these projects; and

To obtain buy in from the District, planning commission, Local Municipalities

and other departments and agencies working in the area.

To create 100 000 jobs by 2030 and to facilitate investments of more that

R10 billion into the district economy.

AGRICULTURE AND AGRI-BUSINESS DEVELOPMENT

Through the Agri-business development strategy, UMDA will support and

facilitate the commercialization of the existing co-ops in the district by promoting

the processing of agricultural and forestry products and support the

establishment of District Agri-business Companies or secondary co-ops per

each commodity or group of commodities.

FRUIT AND VEGETABLE PRODUCTION AND DISTRIBUTION PROGRAMME

a) Ground Nut Processing Project

b) Mealies Production Project

c) Tmm Forestry Project

d) Fish Farming Project

e) Sugar Mill

f) Agribusiness Development Masterplan

TOURISM DEVELOPMENT

UMDA has undertaken substantial research and consultation in to the

development of tourism facilities in the District. The Route 22 study and the

corridor development study informed UMDA strategy on Tourism Nodes

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development, which is intended to facilitate economic growth and transformation

through tourism. The primary objective of this programme is to promote

investments into hotels and other tourism products within the identified nodes.

a) Tourism Nodes

The tourism Nodes identified are: Lake Sibaya, Kosi Bay/Bangneck,

Sodwana, False Bay, Jozini Mountain Ridge (Ogaluweni), Cecil Marks

Pass, Hlabisa and Saint Lucia (Already established)

b) Hotel School

c) Hotel Management Company

d) District Events and Marketing

INFRASTRUCTURE

The Development of infrastructure that is meant to support overall economic

development in the long terms of necessary in the short term.

a) Mkhuze Airport

b) Jozini Hydro Electric Project

c) District Broadband Rollout

d) Solar Electricity Generation

e) Manzengwenya Biomass Project

f) Wind Energy

g) Sewer Management Programme

h) Waste Management Programme

URBANISATION AND INDUSTRIALISATION PROJECTS

a) Small Town Rehabilitation And Development

b) Manguzi Special Economic Zone

c) Mkhuze Special Economic Zone

1.3 MARKETING PLAN AND COMMUNICATIONS

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The local economic development sector is a very broad industry. UMDA would

focus on implementation of catalytic projects and investment promotion. The

implementation of catalytic projects will involve feasibility studies, business

planning, obtaining development approvals and environmental authorizations

and project management.

UMDA will target development finance houses, like the IDC and DBSA including

government departments for grant funding especially for feasibility studies and

project packaging. We will also target other finance houses for finance required

in the implementation of projects, including the family of municipalities, the

business sector and local communities.

1.4 ORGANOGRAM

We are planning for growth and will implement an organogram that suites our

needs but also an organogram that will assist in implementing our projects

quicker and efficiently. It is important to create capacity within the agency to be

able to conduct our own feasibility studies and package catalytic projects

ourselves. It is also important to have capacity to manage large projects without

having to outsource the service and go on protracted tender processes.

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Chief Executive Officer

Mr. Mandla Ntuli

Chief Finance Officer

Mrs Qhamu Mntambo

Finance Officer

Mr. Sthe Mbatha

Receptionist

Ms. Sakhelephi Manzini

General Assistant

Ms. Joyce Biyela

General Assistant

Mr. Bheki Masango

HR & Records Officer

Vacant

PMU Manager

Vacant

Engineer

Vacant

Enviromentalist

Vacant

GIS/DATA Management

Vacant

Quantity Surveyor

Vacant

Admin Clerk

Vacant

Mkhuze Airport Manager

Mr. Siphamandla Madida

Receptionist

Ms. Simangele

Mabuza

General Assistant

Mr. Sipho Gumede

General Assistant

Mr. Lindelani Gumede

Agribusiness Project

Manager

Vacant

Agribusiness -Facilitator

Mr. Lucky Nxumalo

Tourism Project Manager

Ms. Nonhlanhla Biyela

Tourism Officer

Ms. Nomzamo Nxumalo

Urban Development

Project Manager

Vacant

Urban Development

Officer

Vacant

Personal Assistant

Ms. Maggie Sotshongaye

PMS Officer

Ms. Thobeka Ngcobo

Marketing and Communications

Officer

Vacant

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1.5 THE FINANCIAL PLAN

Needs Summary

A budget has been prepared and attached to this business plan as an annexure.

In summary, the agency requires finance for monthly operating costs and

periodic installments amounting to R20 million per annum.

In addition, the agency requires funding for capacity building, including the

setting up of the project management unit. We also require specific project

funding in order to implement projects successfully and in this regard specific

partners and funders will be engaged for funding. It is estimated that the agency

requires to raise R90 million in the first year of implementation.

Revenue Model

The agency will rely primarily on funding from the parent municipality for

operational costs. However since the parent municipality is also experiencing

certain challenges, the agency will also charge fees for work to be done

including prefeasibility studies, feasibility studies, project packaging and project

management. We will also charge a development fee of between 5% and 10%

on all funded projects in order to cover costs associated with investment

promotion and operations of the agency. Three strategic businesses will be

implemented in-house, in order to ensure sustainability of the agency in the

medium term.

1.6 CONCLUSION

During the next three financial years we have a pipeline of projects worth over

R3 billion rands. It is an exciting challenge to face and overcome. However,

before we get carried away, we have mammoth task of packaging these projects

and raising funds necessary for their successful development. It is therefore

critical that we build capacity within the agency to be able to package these

projects on our own and build stronger relationships with our partners and

stakeholder, as that will save costs and improve efficiencies.

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2. INTRODUCTION

2.1 Background

This business plan culminates from the 5-Year Strategic Plan of the uMhlosinga

Development Agency (UMDA). UMDA has been in operation for seven years

and during this time built up a significant portfolio of projects and plans. The

most important of these plans were reviewed during a two-day strategic

planning workshop in order to give direction and impetus to the future plans of

the Agency.

The strategy was largely formulated during the two day strategic planning

workshop that was held on the 4th and 5th of March 2014 at the Protea Umfolozi

Hotel. The strategy is also based on the preceding strategies and business

plans of the Agency but more importantly on the contextual District

Municipality’s strategic plans and the Provincial Growth and Development

Strategy and National Development Plan.

Towards the end of 2013 and beginning 2014 important changes took place at

the UMDA. A new Board of Directors was appointed and a change in the

management leadership took place. These changes created the impetus to

review the previous strategies, business plans and operational structures of

uMhlosinga to the extent that the intention of the 2-day workshop was to

completely overhaul the future plans of the Agency and the way in which it was

operating.

During the course of the workshop, discussion sessions were undertaken to

stimulate debate around the role of Umhlosinga Development Agency (UMDA)

in both its internal and external environment. The objective of these discussions

was to identify the key focus areas for the Development Agency and to direct its

institutional structures accordingly.

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The idea of establishing a local economic development agency was first

conceptualized in 2003. At the time, the agency was being established in terms

of the “old” Local Government: Municipal Systems Act, as a public (section 21)

company. In August 2004, a new set of national policy and legislative provisions

governing the establishment of municipal entities was introduced.

The introduction of the Municipal Finance Management Act and the

amendments to the Municipal Systems Act in the latter part of 2004, drastically

altered the nature of the processes required for the appointment and

composition of agency boards, introduced new control and reporting

relationships between municipal entities and their parent municipalities and

shifted the responsibility for the appointment of executive staff of the agency,

from the parent municipality to the directors of the agency.

The pre-establishment process did not occur without a fair degree of delay. In

the circumstances where key actors have nurtured differing interpretations of the

new legislation, the development of a fresh stakeholder accord concerning the

role and mandate of the municipality, has been a critical necessity for improving

the overall prospects of success of the entire initiative.

The delays resulted in a thoroughgoing process of institutional development of

the entity. Thus, consensus around the structure of the incipient agency, its

primary mandate and its future role in LED and the nature of its relationship with

the district and local municipalities of UMkhanyakude was cemented and the

following key milestones for the pre-establishment phase were attained. The

district municipality appointed a Board of Directors to govern the agency and

The municipality approved an appropriate institutional mandate for the agency

and for the board of directors.

In 2013, the UKDM council, as the shareholder, appointed a new Board of

Directors to replace the founding Board of Directors, whose mandate had

expired. Towards the end of 2013 the founding CEO retired and a new CEO

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was appointed. These changes required the organization to have a relook at its

mandate and strategy; hence a new five year strategy has been formulated.

2.2 Locality

The UMkhanyakude District Municipality is located in the Kwa-Zulu Natal. It is

situated in the North-Eastern part of KwaZulu-Natal, extending from the uMfolozi

River up to the Mozambique border, being bordered on the east by the

Isimangaliso Wetlands Park which encompasses the entire coastline onto the

Indian Ocean. It consists of 5 local Municipalities, which will be reduced to 4

local municipalities from the 2016 local government elections with the

amalgamation of Hlabisa and Big 5 false Bay Municipalities into one, which are

shown on the diagram below:

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The district is named after the UMkhanyakude Tree (Acacia Xanthophyllous,

Fever Tree which translated to English means “the light in the distance”). The

district covers an area of approximately 12 818 km2 and has a population of

some 625 846 persons (Source: census 2011, as published by Statistics South

Africa). The district is largely rural with only one formal town, namely Mtubatuba

in the south. There are several towns in the area that are experiencing rapid

growth including Mkuze, Hluhluwe, Jozini, Manguzi and Mbazwana. Mkhuze

have been identified as the capital city of the district and a services town.

The number of individuals actually employed within the various local

municipalities is particularly low, and there are therefore high dependency ratios

and generally great amounts of poverty and low levels of economic activity.

UMkhanyakude district municipality does have significant economic challenges

and that they intend investing significant resources into turning the economy

around and creating opportunities for growth in the future. The UMDA, as the

Economic Development arm of the UMkhanyakude District Municipality

specifically needs to stand up and be counted in the creation of economic

opportunities.

Primary access to the district is by road mainly via the national N2 route (which

links the southern and northern parts of the KwaZulu Natal province), and via

the coastal SDI route (MR439), which upon completion, will link the national N2

route, with the city of Maputo, in Mozambique. The district is strategically linked

to the provincial markets of KwaZulu Natal and Mpumalanga and to the

neighbouring market of Swaziland, via the N2 route.

In terms of international trade links, the district’s has access to global markets

through the provincial ports of Durban and Richards Bay. Upon completion of

the SDI route between Hluhluwe and Maputo, especially from the Kosi Bay

Boarder to Maputo, the district will have a direct link to the Port of Maputo, in

Mozambique.

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Although, the District’s economy is the smallest in provincial comparative

terms (eg. less than 5% of the size of the eThekwini municipality in 2011),

and growing from a small base, however the economy experienced significant

growth in excess of 9% per annum, especially in the period from 2000

onwards. Two dominant local economies within the district are the Mtubatuba

and Jozini Local Municipalities, accounting for approximately R1.9 and R1.7

billion of GVA in 2011 respectively. The dominant economic sectors in UKDM

as measured by GVA is the retail, catering and accommodation sector

accounting for R1.45 billion in 2011, the manufacturing sector (R1.37 billion),

and the general government services sector (R1.34 billion).

The manufacturing sector increased its contribution to total GVA from 10.3%

to 19.1%, and the retail, catering and accommodation sector its contribution

from 13.5% to 20.3%. The Agricultural sector has shown some significant

growth of approximately 5.5% per annum over the period 1995 to 2011, but

represents the third lowest output amongst the districts within the province. The

number of formal employment opportunities in the agricultural sector remained

relatively stable at approximately 9000 over the period from 2000 to 2005 but

thereafter decreased significantly to a total estimated figure of 4983 by 2010.

The district economy became more concentrated in a select number of sectors

with the Tress index increasing from a value of 36.7 in 2000 to 42.2 in 2011.

(Source: DGDP, 2015)

General government sector and the community, social and personal services

sector remained the main sources of formal sector employment in the district

(13,909 and 11,342 respectively). The retail, catering and accommodation

sector showed considerable growth across all five municipalities and

employment in this sector more than doubled from 5 181 in 2000 to 10 718 in

2010.

Substantial decrease in employment opportunities in the agricultural sector from

8945 in 2000 to 4983 in 2010, despite the significant growth in this sector as

measured by GVA. Unemployment rate of 31% in UKDM is slightly higher than

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the overall provincial rate of 28.5%. High proportion of the economically active

population classified as discouraged work seekers (27.7%), a figure more than

double the provincial average of 13.8%. 35.2% of the unemployed population is

younger than 25 years of age with a further 34.9% between 25 and 34 years.

The education level of the largest proportion of the unemployed population is

those who completed their Grade 12 education (35%), with a further 30% who

completed some form of secondary education. The majority of the employed

population in the district is active in the formal sector (71.8%), with a further

18.8% involved in the informal sector. Individual monthly income earned in both

the formal and informal sectors in UKDM is lower than the provincial figures; and

The proportion of individuals in both the formal and informal sector earning less

than R800 per month is by some distance the highest amongst all district

municipality’s within the province.

UMkhanyakude has outstanding potential for agriculture and tourism

development, with the district having a wealth of natural beauty and outstanding

landscapes, as well as a favorable climate and fertile soils for major agricultural

production. The district is closely associated with the iSimangaliso,

“Maputaland”, the Makhathini Flats and the Pongola-Poort/Jozini Dam

(constructed in the 1970’s with the intention of unleashing the agricultural

potential of the area).

However, an anomaly exists in that for years the district has been one of the

most widely-researched areas in terms of its latent development potential, yet

still encompasses some of the poorest and most underdeveloped regions in the

province of KwaZulu Natal and of the country as a whole. In the midst of the

exceptional physical endowments, pristine natural environs, an abundance of

unique ecosystems and the rich cultural tapestry that distinguish the area, there

has been a distinctive lack of progress with development interventions, to build

sustainable economic gains around these opportunities.

Several initiatives have been taken in the post-apartheid period, in an effort to

boost economic activity in the sub region, including: The recognition of the

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iSimangaliso as a UNESCO World Heritage Site, in 1999; The rollout of the

Lebombo Spatial Development Initiative (LSDI), a joint program by South Africa,

Swaziland and Mozambique that aims to unlock economic development

potential of the wider Lebombo sub-region within the framework of the South

African Development Community (SADC); The Visa waiver agreements with

Swaziland and Mozambique (effective as of April 2005), to support mutually-

beneficial social and economic interchange in the region; Tripartite Conservation

Agreements with the two neighboring SADC countries of Swaziland and

Mozambique focused on the future establishment of a Trans-Frontier

Conservation Area (TFCA), to boost social and economic interchange, and

tourism in the region.

Notwithstanding the aims and objectives associated with the abovementioned

initiatives, the district currently remains an area characterized by extreme

poverty and a pronounced lack of development across vast areas of the

jurisdiction. The district has severe backlogs in the provision of essential basic

services, physical infrastructure and social amenities.

From the time of their establishment, the primary focus of the six new

municipalities has been directed to dealing concurrently with matters of

institutional formation, poverty eradication and with overcoming massive

backlogs in the provision of infrastructure and with extending essential basic

services to the rural poor.

Given the scarcity of development in the major part of UMkhanyakude, the

district and local municipalities operate off an extremely low tax base and LED

has therefore not been funded or contemplated as a mainstream activity of local

government in the area.

There is very little foreign direct investment in the area; investors lack appetite

for investments in the area and it is very expensive to establish developments in

the district due to legislative requirements, lack of infrastructure, lack of

development plans and unavailability of land. The Environmental Impact

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Assessments coupled with further requirements for developments within

Isimangaliso Wetland Park and its buffer zones has further exacerbated the lack

of investment apetite.

2.3 The Role of the UMDA

The Role of the UMDA is to act as an agent for and on behalf of the District

Municipality in implementing economic, social and environmental policies and

projects, as identified by or agreed with the District and local Municipalities of

UMkhanyakude. UMDA is required to co-ordinate the implementation of a

sustainable, long and short term District Development Program; including its

spatial, economic, social and environmental dimensions, it’s regulatory,

budgetary, financial and legal implications and its social and economic

consequences; UMDA is also required to provide the District of UMkhanyakude

with a ‘one-stop’ contact point for access to possible development funding or

technical assistance, as well as information on the priorities and consequences

of the implementation of the UMkhanyakude District Development Program.

In order to assist UMDA achieve its objectives, it may acquire, own and manage

land and buildings, and/or rights to land and buildings, on behalf of the District

Municipality of UMkhanyakude, to be used for economic and social development

purposes, for public service, public infrastructure, educational, health and

cultural purposes, and to prepare and equip such property as needed to fulfill

the development needs of the public infrastructure and for cultural, nature or

wildlife conservation purposes.

UMDA may also conduct, launch, manage and monitor any study that may be

necessary to further its objectives, collect income; raise, receive and hold funds;

or receive guarantees, from any lawful source, for the purposes of the Agency,

and to manage, administer and disburse those funds in pursuance of the objects

of the Agency and for administrative purposes, in accordance with terms and

conditions determined by the Umhlosinga Development Agency Pty (Ltd) and

approved by the Municipality of UMkhanyakude.

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2.4 Past Performance on Key Areas

2007 Establishment of Operational Office Open office at Hluhluwe and arranged

training for SMMEs from 5 Local Municipalities who sent 450 People. Hosted

First Business Retention Summit in collaboration with Trade & Investment KZN

and Growth Fund to Launch Agency to Business Community

2008 Finalized the service level Agreements for Mkhuze Airport and Jozini Hydro

Projects and UMDA received funding from DBSA for R5m for the feasibility

studies of two lead projects

2009 Receive Draft Feasibility and business plans for the Jozini Hydro Indicating a

bankable project and for the Mkuze Regional Airport Indicating an economic

Catalyst effect to tourism industry but no profitability in medium term.

2010 Launch of 5th Program of the UMDA Business Support and Development

Program Launched as 5th program of intervention by the UMDA Initial project

funded by the MTN Foundation for Business Support Centre with Business

Support Manager and one Administrator

2011 Route 22 Passive marketing Campaign Started. Urban Econ Consultants was

appointed and the outcome of study completed in July 2011.

2012 Corridor Development Strategy on Comprehensive Development of a District

Corridor Study to refocus and Align the District Economic Development Agenda

to That of the Province and National Planning Commissions.

2013 Funding for First social Enterprise Project Receive funding for Sicabazini Project

in Agriculture

2013 Manzingwenya, Mabaso & Mbazwana - UMDA to partner in the transfer and

rehabilitation of the 26000ha Forestry business to the Land Owners of three

traditional Authorities, Mbila, Mabaso and Tembe. The project received R100

million from the Jobs Fund and 800 jobs have been created.

2014 Mkuze Airport Operations and management of Airport being conducted by

UMDA. Landing Fees charged Maintenance being conducted. Precinct plan

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completed Authorizations acquired for aviation section and submitted for the

non-aviation section. In negotiations for unscheduled charters flights, with

certain airlines.

2015 National Schools Nutrition Feeding Fresh Vegetables to 532 schools. The

project commenced in January 2015 and immediately created 30 jobs from

logistics.

2.5 Vision, Mission and Strategic Objectives

Based on the above analysis of the challenges, opportunities and key past

performance of UMDA, the following Vision, Goals and Objectives of UMDA

have been developed. The Vision, Goals and Objectives are related to that of

the uMkhanyakude District Municipality. In this respect the Vision of the

uMkhanyakude District is: “To be a metro by the year 2030”.

In support of this Vision the following statement is quoted from the

uMkhanyakude District Growth and Development Strategy:

“ The district economy has consistently grown by more than 5% per annum

since 2014 and this growth resulted in the creation of decent employment

opportunities reducing the unemployment rate in the district by more than 50%,

resulting in significant increases in average income levels. The skills base of the

district labour force improved continually since 2014 and the proportion of

workers with tertiary education exceeds the average of the province. The

agricultural sector in UKDM is recognised as one of the food baskets of

Southern Africa and numerous agricultural and forestry processing facilities

have been established in the district. The district is internationally recognised for

the diversity of its tourism attractions and by 2030 annually attracts visitor

numbers approaching that of South African tourist icons such as Table Mountain

and the Kruger National Park. The land reform programme has been

implemented successfully and created various employment opportunities in the

agricultural and tourism sector”.

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The uMhlosinga Development Agency vision follows from that of the District and

is: “To be the preferred partner providing cutting edge investment

solutions to economic development in uMkhanyakude.”

The Mission of UMDA is:

“To co-ordinate, plan and manage the implementation of a locally driven

program of catalytic projects, to fast track the development of the local economy

of the district of uMkhanyakude.”

The Goals of UMDA that flows from the Vision and Mission Statements and

based on the challenges and opportunities are the following:

6. To promote sustainable commercialization of agriculture and establishment

of agri-business industries in the district;

7. To develop a world class tourism sector;

8. To develop settlements that promote urbanization and industrialization;

9. To develop world class catalytic infrastructure that promotes economic

development;

10. To develop institutional capacity of the agency, at all levels, with the capacity

to effectively implement and raise funds for catalytic projects and operational

needs.

The Goals are further unpacked into Objective areas as is indicated in the table

below.

GOALS OBJECTIVE AREA

1. Agriculture and Agri-

business Development

1.1. Exports

1.2. Commercial Farming

1.3.Agri-business Value chain

1.4. Agro-processing

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GOALS OBJECTIVE AREA

2.Tourism Development

2.1. Tourism investor attraction and promotion

2.2 New product development

2.3 Research and Knowledge Provision

3.Develop Infrastructure

and Green Economy

3.1. Commercial air transport

3.2. Renewable Energy

3.3. ICT Infrastructure

3.4. Bulk Infrastructure

4.Urbanisation and

industrialisation

Development

4.1. Urban nodal development

4.2. Industrial Development

5.Institutional

Development

5.1. Human Resources

5.2. Finance

5.3. Corporate Governance

In implementing the Goals and Objectives UMDA will be providing “consulting

services” such as undertaking feasibility studies; preparing business plans;

undertake environmental and planning studies aimed at gaining the required

approvals; prepare funding applications and put project and programme

management systems in place when and where required.

UMDA will also manage capital projects on behalf of the District Municipality,

Local Municipalities and other government departments and in return will charge

a 10% development fee.

Finally, UMDA will also manage strategic economic investments on behalf of the

District Municipality and in return charge management fees and be entitled to a

portion of dividends as agreed to between UMDA and the District Municipality.

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2.6 SWOT Analysis:

SWOT analysis of UMDA experience

Internal Strengths Weaknesses

The UMDA is a well-skilled and

capacitated institution, with a

sound reputation and effective

systems.

The UMDA is able to implement

capital projects on behalf of the

uMkhanyakude District Municipality

within time and budget, and at a

cost of 10% of the capital value of

these projects.

A pipeline of potential projects has

been developed through rigorous

rural, urban and spatial development

planning

The UMDA must secure a capital

budget allocation of at least R300

million per year to cover all operating

costs through the 10% development

fee, without requiring an additional

operating grant from the uMkhanyakude

District Municipality.

The UMDA’s capacity may be under-

utilised in 2015/16 if the operating

budget allocation is further reduced.

The sustainability of the impact of

UMDA’s projects depends on adequate

maintenance, upkeep and

management by other District’s

departments, local Municipalities,

beneficiaries and agencies.

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External Opportunities Threats

National policy requires a

sustained investment in new

infrastructure (a) to support

economic growth; and (b) to

eradicate service backlogs.

National policy supports

industrialisation through the

development of black industrialists

The Small Town Rehabilitation

Programme facilitates collective

regeneration action in this

strategically important part of

the province.

There are many areas in towns

and rural settlements that require

urban regeneration interventions

to unlock private investment

potential.

Decreased property investor

activity due to the economic

downturn, lack of zonings and

ITB land tenure

Increasing migration pressures,

specifically in to particular

towns i.e. Jozini, Manguzi,

Mkhuze and Mtubatuba.

Declining national and municipal

tax revenue will limit capital

budgets in the medium term.

Inability to attract and retain

personnel qualified in project

management, engineering and

related fields

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3. STRATEGIC FOCUS AREAS

3.1 Business Concept

Investment into the district is very slow and foreign direct investments are

even worse, whilst there is some investments happening in property

development especially on shopping centers. There is limited investment in

the industrial sector, whilst an investment into the tourism sector is minimal

and not in line with the transformation agenda of the country. A number of

factors could be attributed to these challenges.

Firstly, it’s planning; there is only one formal town and all other towns are

informal without town schemes. These towns lack development vision and

have no anchor industries dedicated to each town. Therefore it means that

there are no areas zoned for development and developers will have to fund

the zoning application. Without these spatial plans and adherence to them,

people have also build residences in areas suitable for business and

agriculture, which also means that in some instances, developers has to fund

the negotiation process, the removal of the occupant and compensation. The

above effectively delays the start of the development and increase costs of

such development.

Secondly, it’s availability of land and land tenure. Our Municipalities, both the

district and local municipalities do not generally, own land in all our

development nodes. Some of the land is state land, and some of it is in

private hands, especially in Mtubatuba, Hluhluwe and Mkhuze, whilst most of

the land is Ingonyama trust Land. The administration of Ingonyama trust land

is a challenge. The Ingonyama Trust itself has very few employees

managing vast tracks of land and is based in Pietermaritzburg. This land is

also co-managed by Traditional councils who are severely under resourced

and there are generally no spatial plans on this land and where there is, such

spatial plans are generally not observed by traditional councils and local

communities. The ITB does not grant freehold and only allows leasehold for

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40 years. This creates a challenge especially because there is freehold

tenure in the most part of the country and investors and finance houses

normally view this type of tenure as unsecure, despite the fact that it can be

registered at the deeds office.

Thirdly, it’s the environmental authorizations. It should be noted that

environmental authorizations per se are not an issue. It is the period it takes

to get approvals and uncertainty on approved development nodes that

creates a problem. In other words it is the developer’s responsibility to fund

the process of environmental approvals, which makes investment expensive

and takes longer for development to be realized. These authorizations also

delays the planning and development Act’s approvals (Development

approvals). This is also made worse by the fact that there is lack of spatial

plans, approved development nodes and town schemes.

Lastly, it’s infrastructure; there are currently no infrastructure plans dedicated

to stimulating economic development. This means that an investor, who after

a considerable monetary investment made and who has all the development

approvals must still invest a considerable amount of money in developing

infrastructure required by his/her business. This includes water, sewer,

electricity and roads, which escalates the development costs considerably

compared to cities. Investors have also complained that after investing a lot

of money on infrastructure, they still have to continue to manage such, which

also pushes up their cost of investment.

UMDA’s strategy is therefore to level the playing field for investors, thus

lowering the costs of investment in the district and promoting foreign direct

investment. In order to achieve the above, we have identified a number of

nodes for development, these ranges from tourism nodes, agricultural nodes,

urban (town) development nodes and industrial development nodes. UMDA’s

responsibility is to secure land, obtain environmental authorizations, obtain

development approvals, develop infrastructure and promote these nodes for

investment. Our projects’ portfolio is therefore structured to unleash the

economic potential of the district through unlocking the stumbling blocks to

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investment.

The basis of the UMDA intervention strategy is the district’s IDP priorities

which include the following KPI’s; unemployment, poverty alleviation, local

economic development, infrastructure development, SMME’s development

and Financial Viability of the agency. In line with the above KPI’s we intend

over the next ten (10) years to implement interventions that will assist in

creating over 100 000 Jobs in the district, facilitate investments of over R10

billion, facilitate the establishment of over 50 000 Units (to increase rates

base of municipalities), to facilitate training of over 10 000 beneficiaries and

in the course support the development of at least 10 millionaires from the

district.

The interventions of the UMDA are directly linked through alignment with

these KPI’s by developing, identifying and promoting projects that will speak

to addressing these KPI’s. By doing so the UMDA is able to assist in the

Spatial Planning and focusing the direction of revenue collection by both

Local and National Government.

The UMDA will continue to engage the Private sector, Local, Provincial and

National Government in the identification of projects that would achieve this

goal. The establishment of networking relationships with National and

Provincial Developments, Finance Institutions and Agencies is pivotal to

assist in achieving both the Technical and Financial objectives of the UMDA.

3.2 Guiding Principles

The following guiding principles have been developed and are the foundation

for decision making in UMDA. It informs how the Agency is to prioritise and

select its projects and assess its progress. The guiding principles are:

1. The nature and extent of the employment and income generation

ability of the economic sustainable interventions identified;

2. The nature and extent of external and internal, public and private

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sector investment that the intervention can attract;

3. The multiplier impact of intervention through the creation of new and

additional backward and forward linkages within the District;

4. Building the capital asset base (economic infrastructure) of the District

on which further future interventions can be built;

5. Building the entrepreneurial, SMME, cooperative and small informal

economic base capacity of the District;

6. The ability of the interventions to empowerment of youth, women and

vulnerable groups and the contribution of the intervention towards

poverty eradication;

7. The ability of the intervention to advance further business

management principles also making allowances for the Agency to

generate an income for future investment and funding operations.

The application of the Guiding Principles to project selection will lead to the

identification of a multi-dimensional portfolio of projects rather than a

simplistic listing of priority projects. This will assist UMDA to strategically plan

its economic interventions to deliver different impacts at different time-scales

and with different risk profiles. This is best illustrated in the following diagram

that shows how UMDA will identify its strategic interventions in the District.

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3.3 Catalytic Projects and Actions

Projects come at various stages, forms and shape. However it has been agreed

that in principle our projects will follow the following projects pipeline.

g) Identification, inception and registration of catalytic Project

h) Development of concept

i) Pre-Feasibility study and report

j) Project packaging

Feasibility study

Business Plan

Land Security

Development approvals

EIA approvals

k) Fundraising & investments promotions

l) Implementation

Project Management

Construction & commissioning

Operations

In assessing the projects and action plans UMDA will implement a Process Flow

program to identify catalytic projects and actions and, package them to ensure

that a variety of interventions are planned to deliver on a sustainable basis.

Additional projects to be approved by the Board, through the pre-approved

selection criteria (Matrix).

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Project Flow Process

The immediate projects and actions that UMDA will be focusing on are listed

below. This list of projects and actions will be reviewed and updated on a regular

basis together with its Board and with its shareholder, the District Municipality of

uMkhanyakude. The list relates to the strategic Goals and Objective areas

identified:

3.4 Projects’ Implementation Masterplan

Based on the strategic framework of Goals and Objective, UMDA is in the

process of developing a Master Plan of catalytic projects and actions to lead to

the development of the District. The purpose of the Master Plan is:

To provide a projects implementation master plan for the district up to 2030;

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To provide maps for different sectors and targets;

To provide 3D models and costing of these projects; and

To obtain buy in from the District, planning commission, Local Municipalities

and other departments and agencies working in the area.

To create 100 000 jobs by 2030 and to facilitate investments of more that

R10 billion into the district economy.

5. AGRICULTURE AND AGRI-BUSINESS DEVELOPMENT

Through the Agri-business development strategy, UMDA will support and

facilitate the commercialization of the existing co-ops in the district by promoting

the processing of forestry products and support the establishment of District

Agri-business Companies or secondary co-ops per each commodity or group of

commodities. It is envisaged that commercial stock and broiler farms will be

established to promote the following types of products; groundnuts, sugar cane,

cotton, timber, vegetables, fruits and game. UMDA will work together with the

KZN Agricultural Development Agency to develop markets and further

agribusiness opportunities.

The agri-business intervention is also aligned to the Makhathini Development

Masterplan, a provincial government initiative, aimed at stimulating economic

growth in Jozini and uMhlabuyalingana Municipalities. The purpose of the

Makhathini Development Programme is to support and facilitate the

commercialisation of Mjindi through the expansion of the Scheme, stimulate

further agricultural development in the area and increase the level of tourism

development is the area.

5.1 FRUIT AND VEGETABLE PRODUCTION AND DISTRIBUTION PROGRAMME

To develop a programme that produces fruits and vegetables from the district

and supply them to a number of markets, including the local schools, public

facilities, private and international markets. This is a district project with 70

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percent of the stock coming from Makhathini area. UMDA intend develop 3000

hectares for fruits and vegetables, creating about 3500 temporary and

permanent jobs.

5.1.1 Vegetable Production Project

To develop a project that produces vegetables from the district and supply them

to a number of markets, including the local schools, public facilities, private and

international markets. This is a district project with 70 percent of the stock

coming from Makhathini area. UMDA intend develop 2000 hectares for

vegetables and create about 200 temporary and permanent jobs. The project

has commenced and land is currently being sourced for a more comprehensive

business planning.

5.1.2 Hydroponic Tunnels Development Project

To develop a Hydroponic tunnel network based on one project per Local

Municipality in order to capitalize on faster growth and water savings through

temperature control and drip irrigation. The project is based in the whole district

and about 500 jobs will be created. An investment is required for feasibility

study, technical designs and business plan

5.1.3 Fruit Farming Project

To support and facilitate the commercialization of the existing co-ops and

promote the establishment of commercial farmers through the establishment of

1000 Ha of land for fruit farming. Based in the whole district but about 80% to

come from Jozini and uMhlabuyalingana Municipalities. About 1000 jobs will be

created. The business plan is being concluded

5.1.4 National Schools Nutritional Programme (NSNP)

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Cabinet adopted a resolution for Development Agencies to implement the NSNP

by providing locally produced vegetables to schools. In uMkhanyakude 532

schools has been identified and a Service Level Agreement will be entered into

with the Department of Education to provide food to the schools. The key

objective of the programme is to provide food to the schools by 1st July 2014.

Fruits and

Vegetables

Year 1 Year 2 Year 3 Total

Concept 50 000 50 000

Pre-feasibility 250 000 250 000

Feasibility 1 200 000 1 200 000

Securing Land 500 000 500 000

Social

Facilitation

500 000 500 000

Technical

Studies

2 000 000 2 000 000

PDA Approvals

EIA

Business Plan 500 000 500 000

Implementation 24 000 000 100 000 000 50 000 000 150 000 000

Total 5 000 000 100 000 000 50 000 000 155 000 000

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5.2 GROUND NUT PROCESSING PROJECT

To support and facilitate the commercialization of the existing co-ops and

promote the establishment of commercial farmers through the establishment of

3000 Ha of land for Groundnut farming and the use of the existing processing

plant from ADA. Based in the whole district but about 80% to come from

Mhlabuyalingana and the plant to be based in Manguzi. About 4000 jobs will be

created. The plant exists but a business plan is being concluded.

Groundnuts Year 1 Year 2 Year 3 Total

Concept 50 000 50 000

Pre-feasibility 250 000 250 000

Feasibility 1 200 000 1 200 000

Securing Land 500 000 500 000

Social

Facilitation

500 000 500 000

Technical

Studies

2 000 000 2 000 000

PDA Approvals

EIA

Business Plan 500 000 500 000

Implementation 50 000 000 50 000 000 100 000 000

Total 5 000 000 50 000 000 50 000 000 105 000 000

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5.3 Mealies Production Project

To promote industrial development and job creation through the establishment of

a mealies production project, beneficiating the local farmers but also setting

aside more than 8000 hectares of land for the project. The project is based in

Makhathini, Jozini Municipality. About 10 000 permanent and temporary Jobs to

be created and an investment is required for feasibility study, EIA, development

planning and business plan.

Mealies

Production

Year 1 Year 2 Year 3 Total

Concept 50 000 50 000

Pre-feasibility 250 000 250 000

Feasibility 1 200 000 1 200 000

Securing Land 500 000 500 000

Social

Facilitation

500 000 500 000

Technical

Studies

2 000 000 2 000 000

PDA Approvals

EIA

Business Plan 500 000 500 000

Implementation 100 000 000 200 000 000 300 000 000

Total 5 000 000 100 000 000 200 000 000 305 000 000

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5.4 TMM FORESTRY PROJECT

To support and facilitate the handover of the Manzengwenya Mbazwane State

plantation to the local communities and to rehabilitate the plantation and also

implement beneficiation projects. The project is based in Manzengwenya,

Mseleni and Mbazwane; Mhlabuyalingana Municipality. About 700 Jobs already

created and 1000 more to be created after handover. An investment of R250 M

is required. A business plan concluded and R100 M already invested.

TMM Forestry Year 1 Year 2 Year 3 Total

Concept

Pre-feasibility

Feasibility

Securing Land

Social

Facilitation

Technical

Studies

PDA Approvals

EIA

Business Plan

Implementation 50 000 000 50 000 000 100 000 000

Total 50 000 000 50 000 000 100 000 000

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5.5 FISH FARMING PROJECT

To support and facilitate the commercialisation of the fish farming industry,

through the establishment of two mega fish farms. The project is based in

Mhlabuyalingana and Big 5 Municipality. About 500 jobs to be created. An

investment of R100 M is required. An investment to complete a feasibility study

and business plan

Fish Farming Year 1 Year 2 Year 3 Total

Concept 50 000 50 000

Pre-feasibility 250 000 250 000

Feasibility 1 200 000 1 200 000

Securing Land 500 000 500 000

Social

Facilitation

500 000 500 000

Technical

Studies

2 000 000 2 000 000

PDA Approvals

EIA

Business Plan 500 000 500 000

Implementation 50 000 000 50 000 000

Total 5 000 000 50 000 000 55 000 000

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5.6 SUGAR MILL

To promote industrial development through the establishment of a Sugar Mill,

beneficiating from the local Sugar Cane Farming. The project is based in

Makhathini, Jozini Municipality. About 500 Jobs to be created. An investment of

R200 M will be required. An investment of R8.5 M is required for feasibility study,

EIA, development planning and business plan. is required.

Sugar Mill Year 1 Year 2 Year 3 Total

Concept 50 000 50 000

Pre-feasibility 250 000 250 000

Feasibility 1 200 000 1 200 000

Securing Land 1 000 000 1 000 000

Social

Facilitation

1 000 000 1 000 000

Technical

Studies

3 000 000 3 000 000

PDA Approvals

EIA

Business Plan 2 000 000 2 000 000

Implementation

Total 1 500 000 7 000 000 8 500 000

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5.7 AGRIBUSINESS DEVELOPMENT MASTERPLAN

To promote industrial development through the establishment of a vibrant agri-

business industry. It is vital to have an overarching plan that covers both primary

agriculture and agroprocessing value add but also a plan that has concrete

project information, land and costings. All the stakeholders will be consulted and

required to abide by the plan.

Agri business

Masterplan

Year 1 Year 2 Year 3 Total

Project

Management

500 000

Agricultural 400 000

Agri-

Economist

700 000

Land Legal 300 000

Social

Facilitation

500 000

Technical

Studies

2 000 000

Planning 300 000

Environmental 500 000

Report Writing 200 000

Total 5 400 000 5 400 000

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6. TOURISM DEVELOPMENT

6.1 TOURISM NODES DEVELOPMENT AND ROUTE 22

UMDA has undertaken substantial research and consultation in to the

development of tourism facilities in the District. The Route 22 study and the

corridor development study informed UMDA strategy on Tourism Nodes

development, which is intended to facilitate economic growth and transformation

through tourism. The primary objective of this programme is to promote

investments into hotels and other tourism products within the identified nodes.

Components of the programme are:

To promote investment into associated retail and residential developments

within these nodes.

To promote world class tourism products and not only backpackers

To plan, obtain planning approvals, EIA and land tenure rights prior to

marketing

To ensure that the number of beds are doubled and the number of

international visitors to the district is also doubled, thus creating jobs and

increasing contribution to GDP

The tourism Nodes identified are:

Lake Sibaya

Kosi Bay/Bangneck

Sodwana

False Bay

Jozini Mountain Ridge (Ogaluweni)

Cecil Marks Pass

Hlabisa

Saint Lucia (Already established)

For the year 2015/16 UMDA will focus on three nodes only, which is Cecil Marks Pass,

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Hlabisa and Saint Lucia Nodes

Tourism Nodes Year 1 (2

nodes)

Year 2 (2

Nodes)

Year 3 (2 Nodes) Total

Concept

Pre-feasibility 500 000 500 000 500 000 1 500 000

Feasibility 2 500 000 2 500 000 2 500 000 7 500 000

Securing Land 500 000 500 000 500 000 1 500 000

Social

Facilitation

500 000 500 000 1 000 000

Technical

Studies

3 000 000 3 000 000 6 000 000

PDA Approvals 1 000 000 1 000 000 2 000 000

EIA 2 000 000 2 000 000 4 000 000

Business Plan 2 000 000 2 000 000 4 000 000

Implementation 100 000 000 100 000 000

Total 3 500 000 12 000 000 112 000 000 127 500 000

6.2 HOTEL SCHOOL

One of the key gaps in the tourism product and services identified in the District

is the lack of a Hotel School of international standard. Tourism is one of the main

sectors of the District and there is a substantial number of tourism products and

services already on offer. However, there is no facility that makes provision for

the professional training of staff. The key objectives of this programme is to:

Partner with established players in the field

Promote the development of Africans into managerial positions

Support and supply the tourism nodes with skilled employees.

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Hotel School Year 1 Year 2 Year 3 Total

Concept

Pre-feasibility

Feasibility

Securing Land

Social

Facilitation

Technical

Studies

700 000 700 000

PDA Approvals

EIA

Business Plan 300 000 300 000

Implementation 50 000 000 100 000 000 150 000 000

Total 1 000 000 50 000 000 100 000 000 151 000 000

6.3 HOTEL MANAGEMENT COMPANY

Closely related to the above projects is the need to develop black owned tourism

establishments. Many of the black-owned facilities are of a low standard due to

the inexperience of the owners and staff. Even those with facilities of a high

standards has a low occupancy rates. It is envisaged that a Hotel Management

Company will be established as a joint venture to bridge the gap between the

African tourism product owners and international strategic partners. These

establishment together with community owned establishments, will run the

company. The company will also promote these establishments and the district

internationally, including the provision of world class management in order to

improve service offered to tourists.

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Hotel

Management

Year 1 Year 2 Year 3 Total

Concept

Pre-feasibility 250 000 250 000

Feasibility 1 000 000 1 000 000

Securing Land

Social

Facilitation

300 000 300 000

Technical

Studies

PDA Approvals

EIA

Business Plan 250 000 250 000

Implementation 5 000 000 20 000 000 25 000 000

Total 2 000 000 5 000 000 20 000 000 27 000 000

6.4 DISTRICT EVENTS AND MARKETING

In order to promote the district as an events friendly district but also to promote

tourism through events, there are cultural events like umthayi, adventure like

Airshow and other sports and leisure events based in the whole district that

could create a number of temporary jobs. Event specific investment will be

required. Putting together an events profile of the district is also a

requirement. In this financial year we will focus on supporting the following

events:

a) Umthayi Marula Festival

b) St Lucia Car Spinning Show

c) Route 22 Launch

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District Events Year 1 Year 2 Year 3 Total

Concept

Pre-feasibility

Feasibility

Securing Land

Social

Facilitation

Technical

Studies

PDA Approvals

EIA

Business Plan

Implementation 500 000 500 000 1 000 000 2 000 000

Total 500 000 500 000 1 000 000 2 000 000

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7. INFRASTRUCTURE

7.1 MKHUZE AIRPORT

To develop a 76 Ha plot into a regional airport and a vibrant multi – use non

aviation precinct, with a shopping centre, a hotel, conference facility, hangars,

offices and residential apartments. The project is based in Mkhuze, Jozini

Municipality. It is estimated that between 1000 and 5000 permanent jobs will be

created. Runway present but need rehabilitation, fencing to be done soon, plans

at an advanced stage and there is environmental authorization for the terminal

building.

Mkhuze Airport Year 1 Year 2 Year 3 Total

Concept

Pre-feasibility

Feasibility

Securing Land

Social

Facilitation

Technical

Studies

PDA Approvals

EIA

Business Plan

Implementation 20 000 000 50 000 000 100 000 000 170 000 000

Total 20 000 000 50 000 000 100 000 000 170 000 000

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7.2 JOZINI HYDRO ELECTRIC PROJECT

To develop a Hydro electric project on the Pongolapoort dam wall generating

between 5 and 10 Megs. Electricity will be sold back to the grid. The project is

based at Jozini Dam wall, Jozini Municipality. About 10 direct jobs will be

created. The project requires an investment of R250 M. Feasibility studies done

and only the EIA, water use licence, technical designs and capital required.

Jozini Hydro Year 1 Year 2 Year 3 Total

Concept

Pre-feasibility

Feasibility

(Update)

3 000 000 3 000 000

Securing Land

Social

Facilitation

500 000 500 000

Technical

Studies

2 000 000 2 000 000

PDA Approvals

EIA 3 000 000 3 000 000

Business Plan 1 500 000 1 500 000

Implementation 100 000 000 150 000 000 250 000 000

Total 10 000 000 100 000 000 150 000 000 260 000 000

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7.3 DISTRICT BROADBAND ROLLOUT

To develop a district wide broadband infrastructure, including fibre optic lines

and towers, in order to facilitate easy access to ICT eco systems and access to

internet. The project will cover the whole district. About 1000 temporary jobs will

be created during construction. Total investment required will be R100 Million,

while R5 M is already provided by IDC. A consultant has been appointed to do a

feasibility study with a business plan.

Broadband Year 1 Year 2 Year 3 Total

Concept

Pre-feasibility

Feasibility

(Update)

Securing Land

Social

Facilitation

Technical

Studies

PDA Approvals

EIA

Business Plan

Implementation 10 000 000 50 000 000 250 000 000

Total 10 000 000 50 000 000 260 000 000

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7.4 SOLAR ELECTRICITY GENERATION

To develop Solar electricity generating capacity. The electricity generated will be

fed back to the grid. The solar panels will be placed next to the current

substations. The project will be based in four substations, in Nondabuya,

Ndumo, Phelandaba and Mbazwana; Jozini and uMhlabuyalingana

Municipalities. About 500 temporary jobs and 50 permanent jobs. Investment

required is about R200 M. Investment required for feasibility and business plan

Solar

Electricity

Year 1 Year 2 Year 3 Total

Concept

Pre-feasibility 250 000 250 000

Feasibility 2 000 000 2 000 000

Securing Land 1 000 000 1 000 000

Social

Facilitation

500 000 500 000

Technical

Studies

3 000 000 3 000 000

PDA Approvals 500 000 500 000

EIA 2 000 000 2 000 000

Business Plan 1 000 000 1 000 000

Implementation 50 000 000 50 000 000

Total 250 000 10 000 000 50 000 000 60 250 000

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7.5 MANZENGWENYA BIOMASS PROJECT

To develop a Biomass project, generating electricity through the burning of

timber biomass. Electricity generated will be fed back to the grid. The project will

be based in Manzengwenya/Manguzi; uMhlabuyalingana Municipality. 200 jobs

will be created. Investment required amounts to R100 M. An investment of R5 M

is required for feasibility study and business plan.

Manzengwenya

Biomass

Year 1 Year 2 Year 3 Total

Concept

Pre-feasibility 250 000 250 000

Feasibility 2 000 000 2 000 000

Securing Land 1 000 000 1 000 000

Social

Facilitation

500 000 500 000

Technical

Studies

3 000 000 3 000 000

PDA Approvals 500 000 500 000

EIA 2 000 000 2 000 000

Business Plan 1 000 000 1 000 000

Implementation 50 000 000 50 000 000

Total 250 000 10 000 000 50 000 000 60 250 000

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7.6 WIND ENERGY

To develop capacity to generate electricity through wind turbines based on two

sites. One strategically based along the coast and the other based on the

lebombo mountains.The project is based on two areas, the coast and lebombo

mountains; Mhlabuyalingana and Jozini Municipalities. 500 temporary jobs and

20 permanent jobs to be created. Investment required amount to R200 Million.

R5 Million investment required for feasibility study and business plan.

Wind Energy Year 1 Year 2 Year 3 Total

Concept

Pre-feasibility 250 000 250 000

Feasibility 2 000 000 2 000 000

Securing Land 1 000 000 1 000 000

Social

Facilitation

500 000 500 000

Technical

Studies

3 000 000 3 000 000

PDA Approvals 500 000 500 000

EIA 2 000 000 2 000 000

Business Plan 1 000 000 1 000 000

Implementation 50 000 000 50 000 000

Total 250 000 10 000 000 50 000 000 60 250 000

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7.7 SEWER MANAGEMENT PROGRAMME

To develop a district wide sewar management programme, based on two mega

plants fed from town based transfer stations in order to maximise economies of

scale through possible gas and/or electricity generation capacity. This is a

district wide project with the two mega plants based in the north and the south of

the district. About a 1000 jobs will be created. Investment required will initially be

R1 Billion. An investment for feasibility study and business plan is required.

Sewar

Management

Year 1 Year 2 Year 3 Total

Concept

Pre-feasibility 250 000 250 000

Feasibility 2 000 000 2 000 000

Securing Land 1 000 000 1 000 000

Social

Facilitation

500 000 500 000

Technical

Studies

3 000 000 3 000 000

PDA Approvals 500 000 500 000

EIA 2 000 000 2 000 000

Business Plan 1 000 000 1 000 000

Implementation 50 000 000 50 000 000

Total 250 000 10 000 000 50 000 000 60 250 000

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7.8 WASTE MANAGEMENT PROGRAMME

To develop a district wide waste management programme, based on two mega

plants fed from town based transfer stations in order to maximise economies of

scale through possible gas and/or electricity generation capacity. This is a

district wide project with the two mega plants based in the north and the south of

the district. About a 1000 jobs will be created. Investment required will initially be

R1 Billion. An investment for feasibility study and business plan is required.

Waste

Management

Year 1 Year 2 Year 3 Total

Concept

Pre-feasibility 250 000 250 000

Feasibility 2 000 000 2 000 000

Securing Land 1 000 000 1 000 000

Social

Facilitation

500 000 500 000

Technical

Studies

3 000 000 3 000 000

PDA Approvals 500 000 500 000

EIA 2 000 000 2 000 000

Business Plan 1 000 000 1 000 000

Implementation 50 000 000 50 000 000

Total 250 000 10 000 000 50 000 000 60 250 000

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8. URBANISATION AND INDUSTRIALISATION PROJECTS

8.1 SMALL TOWN REHABILITATION AND DEVELOPMENT

The objective of this programme is to rehabilitate and beautify the existing

targeted six towns in the District. It is also the intention to identify about three

industries per town that would drive development which will lead to the planning

and implementation of a town development plan in line with vision 2030.

Small Town

Rehabilitation

Year 1 Year 2 Year 3 Total

Concept

Pre-feasibility

Feasibility 1 500 000 1 500 000

Securing Land

Social

Facilitation

500 000 500 000

Technical

Studies

2 000 000 2 000 000

PDA Approvals

EIA

Business Plan 1 000 000 1 000 000

Implementation 4 800 000 50 000 000 54 800 000

Total 4 800 000 5 000 000 50 000 000 59 800 000

8.2 MANGUZI SPECIAL ECONOMIC ZONE

UMDA is planning to develop a special economic zone in Manguzi. The purpose

is to promote the establishment of BBEEE industrialist in the district owned by

locals. This will entail the planning and development of EIA approval and

development rights plans, secure land tenure and develop the Special Economic

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Zone

The main objectives of the programme are:

To promote the economic revival of this town with specific focus on industrial

hubs

To plan, obtain development and EIA approval, secure land tenure and

develop industrial precinct.

To secure incentives for businesses willing to invest and set up shop within

the development.

To construct mini factories and warehouses to be owned by UMDA for

leasing to SMME’s

Manguzi SEZ Year 1 Year 2 Year 3 Total

Concept 50 000 50 000

Pre-feasibility 250 000 250 000

Feasibility

(Update)

1 200 000 1 200 000

Securing Land 500 000 500 000

Social

Facilitation

200 000 300 000 500 000

Technical

Studies

1 000 000 2 000 000 3 000 000

PDA Approvals 1 000 000 1 000 000

EIA 2 000 000 2 000 000

Business Plan 500 000 1 000 000 1 500 000

Implementation 50 000 000 50 000 000

Total 3 200 000 6 800 000 50 000 000 70 000 000

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8.3 Mkhuze Special Economic Zone

UMDA is planning to develop a special economic zone in Mkhuze. The purpose

is to promote the establishment of BBEEE industrialist in the district owned by

locals. This will entail the planning and development of EIA approval and

development rights plans, secure land tenure and develop the Special Economic

Zone.

The main objectives of the programme are:

To promote the economic revival of this town with specific focus on industrial

hubs

To plan, obtain development and EIA approval, secure land tenure and

develop industrial precinct.

To secure incentives for businesses willing to invest and set up shop within

the development.

To construct mini factories and warehouses to be owned by UMDA for

leasing to SMME’s

Mkhuze SEZ Year 1 Year 2 Year 3 Total

Concept 50 000 50 000

Pre-feasibility 250 000 250 000

Feasibility 1 200 000 1 200 000

Securing Land 500 000 500 000

Social

Facilitation

200 000 300 000 500 000

Technical

Studies

1 000 000 2 000 000 3 000 000

PDA Approvals 1 000 000 1 000 000

EIA 2 000 000 2 000 000

Business Plan 500 000 1 000 000 1 500 000

Implementation

Total 3 200 000 6 800 000 10 000 000

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9. MARKETING PLAN AND COMMUNICATIONS

We intend to promote the agency as a reputable, reliant and successful

municipal entity, which will implement projects to the value of over 10 billion

rands within the next 10 years. The above interventions should create at lease

100 000 jobs, 10 millionaires and 50 000 property units. This will in turns

increase the contribution of the district to the GDP and also increase the rates

base of our municipalities.

9.1 The Market

The development field is saturated with firms of development practitioners and

consultants providing similar services. Anyone who has been to school can

probably provide development advise and can also draft a business plan.

Whether the advise is sound and whether the business plan will pass the funding

test, is another story.

In KwaZulu Natal there are a number of consulting firms focusing in the

development field but there are currently only three District Development

Agencies. The Provincial cabinet took a resolution that all district municipalities

should have a district development agency. COGTA was mandated to

implement the decision and a consultant was appointed to facilitate the

establishment of these district development agencies. Consulting firms and

municipalities per se are competition to district development agencies. It is

therefore critical that the relationship with municipalities and consultants is

managed properly to avoid unnecessary competition. Municipalities generally

work with consultants once they have funding approved for specific projects

whilst DDA’s are left in the cold.

Special relationships between certain individuals also creates a challenge for the

agency, in that sometimes it’s difficult to work with a particular municipality on a

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project because they want a certain consultant to handle it. Also municipalities

and provincial departments will from time to time parachute projects that could

be done by the DDA, because someone wants credit for that project.

Whilst there are challenges facing DDA’s, it should be noted that it is not all

doom and gloom and there are many more opportunities that still exist, but these

opportunities require a dynamic DDA that is willing to change and adapt to the

current market conditions, while ensuring that they still provide a professional

service that addresses the needs of our communities.

9.2 Market Segmentation

The local economic development sector is a very broad industry. UMDA would

focus on implementation of catalytic projects and investment promotion. The

implementation of catalytic projects will involve feasibility studies, business

planning, obtaining development approvals and environmental authorizations

and project management.

UMDA will target development finance houses, like the IDC and DBSA including

government departments for grant funding especially for feasibility studies and

project packaging. We will also target other finance houses for the for finance

required n the implementation of projects.

UMDA will also target municipalities in order to establish working relationships

that will ensure that UMDA work as a team with the family of municipalities. All

projects that UMDA is working on, are based in these municipalities and

therefore belong to the municipalities and there is no need for competition. We

will also target provincial departments in this regard to ensure a smooth working

relationship on specific projects.

The business community is of vital importance both from the district and beyond.

As part of government our role is to level the playing field and business will thrive

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and create jobs. It is therefore important to deal with business since they are the

ones that create jobs and will bring investments into the district.

The local communities are the ultimate beneficiaries of our intervention. It is

therefore important that they are part of the process at all times and also are

informed of what is being done regularly.

UMDA has used the market segmentation strategy to identify the market it wants

to operate in. Whilst the market of banks, development finance houses, business

sector, communities and government has been identified, it is also noted that

their needs may not be the same all the time. The UMDA will therefore ensure

that when dealing with each sector their needs will be identified and solutions will

be developed to address that specific sector’s needs.

9.3 Target Audience

The target Audience is segmented. Development finance institutions are

targeted for grant funding especially for feasibility studies and project packaging.

Whilst other finance houses will be targeted for financing the implementation of

projects.

Government and in particular Municipalities are targeted for funding, PDA

approvals, environmental approvals, technical support and partnership. They will

also assist with stakeholder mobilization.

Business sector will also be targeted for guidance and advice on development

opportunities and priorities including investment on economic opportunities,

whilst local stakeholders will also be targeted as the main beneficiaries of our

interventions.

9.4 Competitor Analysis

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There are no companies or entities specializing on local economic development

in our area. However municipalities, government departments and consulting

firms all play a role in one way or another, related to local economic

development. Even though there are consultants with capacity to do the work we

are doing, they normally start doing the work once there is confirmation of funds.

On one hand government departments and municipalities do not have capacity

to do the work we are doing except that when they have funded projects, they

prefer to appoint consultants to do the work because of special relationships and

lack of capacity within UMDA.

9.5 STRATEGIES

9.5.1 Sales and Market Strategy

The objective of the UMDA is to grow the market penetration through better

servicing of the old clients and finding new ones while ensuring market stability.

We also have to inform our stakeholder and especially communities of our

progress achieved in implementing catalytic projects. In the course, the following

tools will be employed in implementing the said objective.

9.5.2 Target market

Our target market will consist mainly of existing clients, new client and potential

clients and would comprise mainly of banks, development banks, funders,

municipalities, government departments, business sector and communities.

9.5.3 Service

The agency will focus in providing cutting edge local economic development

solutions, including investment promotion services. In particular we will provide

research, feasibility studies, business planning and funding proposals, project

packaging (securing land tenure, obtaining environmental approvals and

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securing development approvals) and project management during

implementation.

9.5.4 Promotions

Promotional items in the form of pens, note pads and calendars will be

developed and handed out as gifts to all stakeholders. This will ensure that they

see the name and contact details of the UMDA on daily basis, thus when they

need local economic development support, they will think of UMDA first.

9.5.5 Entertainment

Entertainment for certain executives at convenient times will also be carefully

done. The company will only entertain relevant people who are decision makers

or have influence in their workplace. The intention is to create a close working

relationship with these executives.

9.5.6 Investment Seminars

Since there are new developments happening all the time, seminars will be held

with particular investors. They will be required to bring their key staff and we will

showcase development opportunities available in the district and receive

feedback from them. In this way we will create a working relationship with

investors while also educating them about the economic conditions of the

district.

9.5.7 Brochures

A two page brochure will be developed, which will be kept at the company’s

reception area. The brochure will contain basic information about the company’s

vision and mission, current projects, investment opportunities and its partners.

This brochure will be in a glossy finish in line with the company’s image.

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9.5.8 Quarterly Newsletter

A quarterly newsletter will be developed to provide information on the status of

current projects, investment opportunities and economic development news

relevant to the area. This will also ensure that we keep in touch with our

stakeholders all the time. Since we have embarked on a cost saving exercise

and costs need to be cut at all times, the company will distribute this

newsletter electronically, through emails and posted on the firm’s website.

9.5.9 Sponsorship

Sponsorship for a good cause will also be considered as corporate social

responsibility. Initially the company will consider non-financial sponsorship. This

will also put the company’s name into the public arena and raise its profile.

9.5.10 Website/Internet/Technology

Technology is the fastest growing form of marketing. The company will develop

and maintain a website that is part of the search engines and also interactive

with users. Facebook and twitter will also be used to market the company.

9.5.11 Personal Networking

The directors and managers of the company will be encouraged to also use

personal networking as one of the least expensive tools that can be used to

grow the company out of the current financial difficulties. Here they will be

encouraged to look at their relatives, fellow church members, golf club members

etc. People who occupy key positions in their entities that part of our target

market will be identified and approached.

9.5.12 Strategic Alliances

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The company will forge strategic alliances with certain partners especially, the

local municipalities, provincial departments, parastatals, traditional authorities,

funding agencies and business to fastrack the successful implementation of

projects.

9.5.13 Conclusion

It is therefore important that UMDA should have a unique selling proposition that

differentiate it from the rest of the pack. This unique selling proposition will define

the success or failure of the company. Our unique selling proposition, is based

on the specialized service that we provide and service to be provided to our

clients.

Since the service is almost the same, it is important that the company has

identified the niche in the market, will do things quicker, relate better to their

clients and maintain their relationship with stakeholders. We will focus on

eliminating stumbling blocks to development through feasibility studies, project

packaging and project management.

Challenges exist in the market, like the relationships that certain consultants may

have with municipalities, and government departments providing similar service

and lack of qualified practitioners in our team. Therefore it is critical that UMDA

work smarter in capturing the market and build sufficient capacity to implement

catalytic projects.

10. INFORMATION TECHNOLOGY PLAN

It is important to note that information technology components and gadgets are

tools to assist management to manage the agency and the workflow. When

doing the need’s analysis, focus was made on the following tools and gadgets.

Computers – up to date computers are required for typing, printing, saving

information and uploading other software applications.

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Backup devices – these could be servers or computers used as servers

for backing up data. These devices make copies of data found on

computers and store it in a location where that data can be retrieved from

when needed.

Accounting system – the agency needs an accounting system that

complies fully with the GRAAP. The main characteristics of which should

be that the system caters for the needs of the agency.

Document generation – Microsoft provide this software and it may not be

necessary to purchase a separate product.

Emails and sms systems –We need to have the sms system that will

allow for multiple sms’s to be sent at the same time. This will assist the

agency in communicating with our stakeholders.

Specialist software – this is provided to allow the project manager to

manage his/her workflow and productivity. There are programmes that

assist with project management. Although these are not a requirement,

they assist the project manager to be more effective.

Website - The Agency has its own registered website to communicate

current and future project information the site is linked to several

government Agencies and Local Business: this site is now updated on a

monthly basis. www.umda.org.za

When choosing the software referred to above, we looked at the needs of the

agency, software available in the market, ability of the software to adapt to our

agency’s changing needs, whether that software enhances value to stakeholder,

affordability, month to month contract and reputation of the provider.

Capacity building is important in ensuring that the practice does not end up with

state of the art technology system that cannot be used by its employees. It is

therefore important to train the staff accordingly in terms of the use and benefits

of technology. Training is provided by the service provider on the use of their

software package. Management and staff will be required to attend these

training sessions.

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11. RISK MANAGEMENT PLAN

The Board of Directors, together with the Chief Executive Officer, will be

collectively responsible for the adoption of a proactive approach to the

management of physical, operational, compliance and other risks to the integrity

of the organization. The CEO will be accountable to the Board for ensuring that

effective controls against risk are embedded in the everyday operations of the

organization. A risk management plan in attached as an annexure.

12. MANAGEMENT AND ORGANISATIONAL STRUCTURE

12.1 UMDA Board

The Agency is governed by an independent Board of Directors, who have been

nominated by the residents of the district and appointed by the district

municipality, in accordance with the provisions of the Systems Act (as

amended).

The Board is responsible for ensuring that the company is managed effectively

and that the resources of the entity are legitimately utilized for the sole and

exclusive purpose of furthering the mandate of the organization.

The primary role of the board shall be, inter-alia, to:

ensure that the agency is governed in an effective, transparent and

accountable manner;

ensure corporate and organizational compliance with applicable legislation;

ensure adherence to the highest standard of corporate conduct and ethics;

maintain effective oversight of the performance and affairs of the agency;

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attract and retain skilled personnel in the employ of the organization;

12.1.1 Relationship with Shareholder

A number of shortcomings and challenges have been identified in the

institutional structuring of UMDA and its relations with its key stakeholders. In

order to address these shortcomings the following actions are planned; To

develop and conclude a Shareholders compact with the District Municipality and

to review and update the agreement annually; To conclude a Service Level

Agreements for individual projects that relate to UKDM and to the local

municipalities; To organise structured and planned meetings, between the Board

Chairman and the Mayor and the CEO and the MM and between the Board and

the Shareholder; To adhere to the provisions of the Municipal Systems Act and

the MFMA relating to reporting procedures between the MM and Mayor.

12.1.2 Functioning of the Board

The way in which the Board is structured and operates will also be addressed.

The following is important in this respect: To create an environment conducive

for an Activist Board as opposed to a Passive Board that is not involved with the

planning, decision making and implementation of the activities of UMDA. In this

respect the Board is to actively promote trade and investment into the district; to

adhere to the highest standard of corporate governance principles. The board is

to actively participate in the selection and prioritisation of catalytic projects

undertaken by the agency and to monitor the implementation of the strategy and

through proper reporting by the CEO. To achieve the above objectives the Board

is to establish additional Committees for the following: Governance and

investment promotion, Audit Committee, Tourism Development, Agribusiness

Development, Infrastructure and Urban Development.

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12.1.3 Audit Committee

The primary function of the audit committee is to ensure the development of and

proper compliance with the internal/external controls of the agency and to

ensure the proper and timeous implementation of appropriate auditing and

related processes. The committee has been charged with the responsibility,

under the terms of its appointment, to ensure that the board of directors is

regularly informed of all audit-related matters that pertain to the agency.

12.2 UMDA Team

12.2.1 Executive Management.

The Board of Directors appoints a Chief Executive Officer to lead and manage

the organization, on a fixed five-year contract. The Chief Executive Officer is the

accounting officer of the Agency. The Chief Executive Officer is required, inter-

alia, to perform the following key functions:

UMDA BOARD OF DIRECTORS

Governance and Investment Promotions

Mr RP Tembe

BOARD Member

CEO

CFO

PED-GM

TIKZN

IDC

Agri-business

Mr ZJ Ndwandwe

BOARD Member

Agri-Business Facilitor

Dept. Agriculture

MJINDI

Dept. Rural Dev

Tourism

Mr S. Gumbi

BOARD Member

Project Manager

UKDM

ETTEA

TOURISM kzn

CTO

Urban Development

Mr M Thango

BOARD Member

project Manager

UKDM (Boxer)

COGTA

TIKZN

Infrastructure Developments Mr S

Nyawo

BOARD Member

project Manager

UKDM( Technical)

Dep of Transport

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Prepare a fully integrated and sustainable economic development programme

for the District of UMkhanyakude.

Coordinate and facilitate the implementation of the programme, including its

spatial, economic and environmental dimensions, its regulatory, budgetary,

financial and legal implications and its social and economic consequences.

Manage relationships with investors and entrepreneurs on a continuous basis.

Ensure the management and coordination of stakeholders relations through an

effective communication strategy.

Raise financial support for the agency and for agency-led projects.

Identify and facilitate donor, public and private sector investment to LED projects

in the district.

12.2.2 Organising For Implementation

The future organogram for UMDA focuses on the implementation of the strategic

plan and catalytic projects. The overarching managing body of the Agency is its

Board of Directors to which the CEO reports. Chief Executive Officer to manage

and oversee the day to day functions of the entity. The organogram makes

provision for sector based portfolio managers dealing with agriculture and agri-

business, tourism, urban development and infrastructure. The Chief Financial

officer will be responsible for the overall administrative functions of UMDA

including HR issues and development. Important is the provision that is made for

a Project Management Unit. Most of the projects required technical inputs such

as engineering, environmental and planning functions and GIS / Data

management. The Project Management Unit will be instrumental in providing in-

house professionals to fast track the implementation of catalytic projects.

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Since we are growing organically, the agency will for the 2015/16 financial year

operate on an organogram that allows for growth. No senior manager will be

appointed in the coming financial year but only in the financial year 2016/17.

Project managers will therefore be appointed for each unit and the structure of

the agency would be the following.

12.2.3 Organogram

We are planning for growth and will implement an organogram that suites our

needs but also an organogram that will assist in implementing our projects

quicker and efficiently. It is important to create capacity within the agency to be

able to conduct our own feasibility studies and package catalytic projects

ourselves. It is also important to have capacity to manage large projects without

having to outsource the service and go on protracted tender processes.

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Organogram for 2015/16

Chief Executive Officer

Mr. Mandla Ntuli

Chief Finance Officer

Mrs Qhamu Mntambo

Finance Officer

Mr. Sthe Mbatha

Receptionist

Ms. Sakhelephi Manzini

General Assistant

Ms. Joyce Biyela

General Assistant

Mr. Bheki Masango

HR & Records Officer

Vacant

PMU Manager

Vacant

Engineer

Vacant

Enviromentalist

Vacant

GIS/DATA Management

Vacant

Quantity Surveyor

Vacant

Admin Clerk

Vacant

Mkhuze Airport Manager

Mr. Siphamandla Madida

Receptionist

Ms. Simangele

Mabuza

General Assistant

Mr. Sipho Gumede

General Assistant

Mr. Lindelani Gumede

Agribusiness Project

Manager

Vacant

Agribusiness -Facilitator

Mr. Lucky Nxumalo

Tourism Project Manager

Ms. Nonhlanhla Biyela

Tourism Officer

Ms. Nomzamo Nxumalo

Urban Development

Project Manager

Vacant

Urban Development

Officer

Vacant

Personal Assistant

Ms. Maggie Sotshongaye

PMS Officer

Ms. Thobeka Ngcobo

Marketing and Communications

Officer

Vacant

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Organogram for 2016/17

Chief Executive Officer

Chief Finance Officer

Finance

Manager

Finance Officer

Receptionist

General Worker

General Worker

Project

Finance

Manager

HR &

Record

Officer

SCM Officer

Personal Assistant

PMU Manager

Engineer

Specialist

Enviromentalist

Specialist

GIS/DATA

Management

Specialist

Quantity Surveyor

PMU Admin

Infrastructure

Development Project

Manager

Infrastructure

Development

Project Manager

Mkhuze Airport

Officer

Mkhuze Airport

Receptionist

Mkhuze Airport

General Assistant

Mkhuze Airport

General Assistant

Infrastructure

Development

Project

Manager

Infrastructure

Development Admin

Agribusiness

Senior

Manager

Agribusiness

Project

Manager

Agribusiness

Project Manager

Agribusiness

Officer

Tourism Senior

Manager

Tourism Project

Manager

Tourism Project

Manager

Tourism Officer

Urban Development

Senior Manager

Urban

Development

Project Manager

Urban

Development

Project Manager

Urban Development

Officer

Personal Assistant General Manager

PMS Officer

Marketing and

Communications Officer

Legal and Compliance Officer

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13. The Human Resources Plan

13.1 Key players

Since UMDA is a small company that is navigating challenges at the moment,

the agency does not have many staff members. This is critical in order to

maintain costs as well as effective management.

There are two executive directors, the CEO and CFO, three project managers

and six officers, one PA, two receptionists and four general assistants. The

executive directors are key players in the management of the agency.

13.2 Human Resources Plan

The plan is to maintain the number of employees the firm has for the time being.

However the development of staff is critical to the success of this business plan.

The staff will be enrolled with courses provided by relevant institutions which are

highly effective and economical as well.

The educational qualifications, previous work experience and training courses

attended by management and staff, the number of staff required, job titles and

what they will do, remuneration packages, fringe benefits if any, conditions of

service, disciplinary or grievance procedure and a recruitment plan all informs

the agency’s Human Resources policy.

13.3 Recruitment policy

The UMDA’s recruitment policy is in compliance with legislation and in particular,

the Employment Equity Act 55 of 1998, which provides against unfair

discrimination of an employee or applicant for work, in employment practices or

policies, on one or more grounds, including race, gender, sex, pregnancy,

marital status, family responsibility, ethnic or social origin, colour, sexual

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orientation, age, disability, religion, HIV status, conscience, belief, political

opinion, culture, language and birth.

The UMDA’s recruitment policy also adheres to the following principles;

Criteria must be based on inherent job requirements;

The focus must be on whether the candidate can do the job or not,

irrespective of the candidate’s race and gender.

A candidate that can do the job should be barred on some or other subjective

criteria;

The same information should be gathered on all the candidates;

Access to an opportunity should not be barred or limited;

Procedures must be applied consistently;

Arbitrary notions about groups as criteria must be limited.

Staff selection will be a systematic process involving choice, but also utilising the

following basic tools;

Prior to shortlisting and inviting candidates for interviews, the resumes need to

be evaluated objectively. The agency would also have an application form which

will assist the management in terms of obtaining additional information not

provided for in the resume. The interview will give an opportunity to the partners

to get information from the applicant regarding his/her background, experience

and interests.

13.4 Training and development of staff members.

For a company to benefit it is important to have a workplace skills plan and apply

for financial assistance as and when the existing employees are trained. The

company may also register learnerships to allow for training of new entrants to

the jobs market.

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The agency will develop a workplace skills plan, in order to ensure that its staff

are property skilled and trained to be able to deal with the current changes to the

legal profession, current trends and be able to implement this business plan.

14. THE FINANCIAL PLAN

14.1 Needs Summary

A budget has been prepared and attached to this business plan as an annexure.

In summary, the agency requires finance for monthly operating costs, periodic

installments, and once off costs relating to this business plan.

In addition, the agency requires funding for capacity building, including the

setting up of the project management unit. We also require specific project

funding in order to implement projects successfully and in this regard specific

partners and funders will be engaged for funding.

14.2 Revenue Model

The agency will rely primarily on funding from the parent municipality for

operational costs. However since the parent municipality is also experiencing

certain challenges, the agency will also charge fees for work to be done

including prefeasibility studies, feasibility studies, project packaging and project

management. We will also charge a development fee of between 5% and 10%

on all funded projects in order to cover costs associated with investment

promotion and operations of the agency.

There is a need for uMhlosinga Development Agency to have a funding model

that promotes its independence and self-sufficiency. UKDM to provide funding

for their projects undertaken by the agency separately. The funding stream of

the agency to be split in the following context:

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20% from UKDM

40% from fees charged on services offered

40% from strategic investments

Agri-business Urban

Development

Tourism Infrastructure Total

Concept 650 000 50 000 700 000

Pre-feasibility 1 150 000 250 000 750 000 1 250 000 3 400 000

Feasibility 4 300 000 1 200 000 3 500 000 3 000 000 12 000 000

Securing Land 1 800 000 500 000 2 300 000

Social Facilitation 2 000 000 200 000 300 000 500 000 3 000 000

Technical Studies 8 000 000 1 000 000 700 000 2 000 000 9 900 000

PDA Approvals 300 000 300 000

EIA 500 000 3 000 000 3 500 000

Business Plan 1 700 000 500 000 550 000 1 500 000 4 250 000

Implementation 24 000 000 4 800 000 500 000 20 000 000 49 300 000

Total 44 400 000 8 000 000 6 800 000 31 250 000 90 450 000

15. CONCLUSION

During the next financial year we have a pipeline of projects worth over R3 billion

rands. It is an exciting challenge to face and overcome. However, before we get

carried away, we have mammoth task of packaging these projects and raising

funds necessary for their successful development. It is therefore critical that we

build capacity within the agency to be able to package these projects on our own

as that will save costs and improve efficiencies.

We have a balanced and capable board that is led by a visionary chairman. Our

core staff members are young, vibrant and focused. This provide an excellent

opportunity and capacity to be able to implement plans contained in this

business plan. Successful implementation of these plans will create and

environment conducive for business investment to thrive and accordingly create

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a number of jobs, which we desperately need as a country.