PRESENTATION TO THE PORTFOLIO COMMITTEE ON PROVINCIAL AND

PRESENTATION TO THE PORTFOLIO COMMITTEE ON PROVINCIAL AND LOCAL GOVERNMENT BRIEFING ON THE NODES 12 June 2007 the dplg June 2007

PRESENTATION OUTLINE 1. NATIONAL AND PROVINCIAL SECTOR SUPPORT (slides 3 -5) 2. FINDINGS OF STUDIES DONE: a. impact assessments of 4 nodes b. economic profiling research c. URP lessons learnt (slides 6 -24) (slides 25 -45) (slides 46 -51) KEY ISSUES FOR INTERVENTION (slides 52 -53) 3. the dplg June 2007 2

NATIONAL AND PROVINCIAL SECTOR SUPPORT. National level: v Coordination through the inter departmental task team v Consists of representatives of the three spheres of government v Well represented: challenges with DTI, DST, DSR v Clear contribution at nodal level from Agriculture, Health, DWAF, DME, DSD, Housing, DOL, DOT, DEAT, DOC. Idea of the Financing Protocol introduced in 2005, to encourage sector to have MTEF plans and resource allocation for each node the dplg June 2007 3

NATIONAL AND PROVINCIAL SECTOR SUPPORT PROVINCE Limpopo . COMMENTS Office of the premier involved In principle agreement to coordinate through the provincial Planning forum , PCF, Mayors’ coordinating forum and municipal coordinating forum Most provincial sector departments and office of the premier made financial commitments to the nodes Change in the provincial coordinator- created gap and has implication for continuity No political champion visit recently Mpumalanga Provincial/technical support weak No coordinating structure- IGR for a explored and recommendations made to coordinate through some existing structures at both provincial and municipal level Political champion changed recently – has to be oriented Few departments made financial commitments No political champion visit recently Northern Cape New provincial coordinator No coordinating structure- meeting with HODS To explore structures pending Political champ visits monthly- technical and political meeting the dplg June 2007 4

NATIONAL AND PROVINCIAL SECTOR SUPPORT PROVINCE Western Cape Eastern Cape . COMMENTS Good technical and political support from province. Political champion visits regularly in rural nodes. Urban nodes: no visits Office of the premier participates in M&E Structures Coordinating structure exists and meets in the nodes Designated official per node appointed and supportive of the programme: dplg has placed a technical advisor in the unit. Office of the premier participates in M&E sessions Financial resources allocated to all the nodes also to address the PGDS priorities GDS held in all the nodes All nodes had at least one political champ visit between February and April 2007 Free state Coordinating structure exists Official appointed and located in the node Provincial coordinators changed six times since 2003: implications for continuity Official from the office of the premier assigned responsibility to contribute to ISRDP Had one political champion visit in April Kwa. Zulu Natal Programme moved to rural development unit Coordinators changed in 2004 Efforts made to reestablish coordinating structure in 2006 Challenges of aligning with national approach to implementation of the programme and reporting. the dplg June 2007 5

RESEARCH DONE IN THE NODES. IMPACT ASSESSMENTS IN 2 RURAL AND 2 URBAN NODES : SUMMARY OVERVIEW OF KEY FINDING - BASIC SERVICES HOUSING ECONOMIC DEVELOPMENT JUSTICE CRIME PREVENTION, SAFETY COOPERATIVE GOVERNANCE the dplg June 2007 6

RESEARCH DONE IN THE NODES PRELIMINARY IMPACT ASSESSMENTS SUMMARY OF KEY FINDINGS Delivery Of Basic Services • Generally an improvement in all 4 nodes eg. 80% improvement in access to water in Maluti-a-Phofung, electricity access in Alexandra improved from 72% in 2001 to 88% in 2005. • Limited household incomes constrains the use of services such as electricity, and the free 50 Kw is deemed to be inadequate for families with no source of income. • Expectations shift and increase as soon as basic delivery takes place – communities then expect higher levels of services and are unhappy about costs and quality (power outages, taste of water). • In urban nodes, most of funding spent went on extending and upgrading bulk infrastructure & maintenance of old and neglected infrastructure – this “under-theground: investment is not appreciated by communities. Implications • The Housing programme and infrastructure investment programme can hinder or help the rate and pace of service delivery. • Communities are concerned with quality and affordability and we are not measuring these aspects of service delivery. • More attention is needed to improve incomes and ability to pay for services the dplg June 2007 7

RESEARCH DONE IN THE NODES. PRELIMINARY IMPACT ASSESSMENTS: SUMMARY OF KEY FINDINGS: Housing • Blockages caused by lack of land, eligibility of communities, the need for relocations can take up to 5 years to resolve, resulting in a slow down of the entire development processes. • The current funding model for building rental housing meant that rental housing was constructed but is unaffordable to the community. • Poor quality construction in Motherwell meant that of the 6000 houses built, 1000 were unfit for habitation. • In Maluti-a-Phofung some felt the housing programme undermines traditional family structures and lifestyles. • Housing was communicated as the key deliverable, while in most cases this not deliverable at the scale and pace promised. Implications • Communicating clear, consistent and realistic delivery targets are key for managing community expectations. If housing targets are not met it affects negatively the community views of the entire development programme. • The housing policy may have unintended consequences of fragmenting traditional homesteads and families. • Land transfers and land redistribution delays delivery. • In urban nodes where infrastructure upgrading and land purchases must take place, housing delivery has a long lead-in time. the dplg June 2007 8

RESEARCH DONE IN THE NODES. PRELIMINARY IMPACT ASSESSMENTS Summary of key finding Economic Development • • LED support has made no significant impact on long-term livelihoods and sustainable job creation. Short term improvements in income has been facilitated through the infrastructure programmes and through programmes aimed at improving food security (food gardens etc). Capacity of district and province to plan and stimulate economic growth is poor – most projects are “poverty-alleviation” in nature and relies heavily on the municipality for subsidies to ensure sustainability. No clear distinction and variable plans for viable economic development interventions and social welfare interventions. the dplg June 2007 9

RESEARCH DONE IN THE NODES PRELIMINARY IMPACT ASSESSMENTS Economic Development: implications • • • Very high expectations from communities in the nodes to obtain jobs through the development programme – these cannot be me and puts pressure on the development programme. Communities could take more responsibility for management of LED projects with a social welfare focus, with government reducing its involvement, focusing more on oversight and start-up support. Economic development strategies for the nodes need strengthening, with more focus on skills development and business growth. A comprehensive plan needed by government to intervene to change the skills profile of nodal communities. Integration is needed at nodal level, to provide one point where potential entrepreneurs can come for a range of support services. the dplg June 2007 10

RESEARCH DONE IN THE NODES PRELIMINARY IMPACT ASSESSMENTS SUMMARY OF KEY FINDING: Justice, Crime Prevention And Safety • No consistent downward trend in crime in urban nodes. • Safety is still seen as a high priority concern for nodal residents. • Positive support from national and provincial in the form of construction of new police stations and magistrate courts. • Interviews of beneficiaries show concerns with quality of service: perceived lack of professionalism from local police, understaffing, poor response time. Implications • Upgrading of policing and justice infrastructure has made some impact, but has made not significant impact on community perceptions of safety. • Crime prevention initiatives are uncoordinated and duplicated by a range of stakeholders (national, provincial, municipality, NGOs). • Cooperation between various agencies are needed, with more focus on community awareness, confidence building, crime prevention. the dplg June 2007 11

RESEARCH DONE IN THE NODES PRELIMINARY IMPACT ASSESSMENTS SUMMARY OF KEY FINDING Cooperative Governance • National and provincial line functions coordination with nodal priorities remain weak. • Positive results with the linkages between CDW, Ward Committees and Community Liaison Officers (in Alfred Nzo and Motherwell. • Lack of role clarification and the linkages of the CDW programme to the province cause some conflict (Maluti-a-Phofung, Alexandra). • It took at least 2 years to put in place the frameworks, systems and processes for effective implementation, impacting on the delivery targets. Implications • The multiple forums and engagements to facilitate coordination must be streamlined – formal IGR structures, in line with IGR Act, must become the forum where sector departments plan with and support the nodes. • Performance contracts of officials to be used as a tool to ensure commitments are made to the nodes and are met. • Role clarification needed for CDWs, Ward Committees, ward Councilors, CLO’s, in some cases. • Ward committees need support and training to assist them in their communication function. the dplg June 2007 12

RESEARCH DONE IN THE NODES. PRELIMINARY IMPACT ASSESSMENTS : DETAILS PER NODE: MALUTI-A-PHOFUNG the dplg June 2007 13

PRELIMINARY IMPACT ASSESSMENTS: MALUTI-APHOFUNG Key findings for service delivery achievement: Maluti-A-Phofung • • Water, sanitation and electricity: Backlogs in water, sanitation and electricity have been halved between 2001 and 2006 – 46000 new water connections, 50200 sanitation connections and 30400 new electricity connection. (these figures from the municipality do not in some cases talk to figures from DWAF and STATSSA). Difficulties with connecting rural communities to the grid as well the need for more capacity in the grid is limiting new connections at the moment. Housing: 7688 houses have been delivered to date, with 4400 new subsidies approved. The housing backlog is still significant – of the 35 860 backlog, 25 000 is in the deep rural areas. the dplg June 2007 14

PRELIMINARY IMPACT ASSESSMENTS: MALUTI-APHOFUNG Key findings for Economic Development achievements: Maluti-A-Phofung • Projects to date have been mainly of a “poverty alleviation” nature, requiring significant investment from the municipality and ongoing subsidization. These are communal gardens, small community poultry and livestock projects. • A LED directorate has been established in the municipality in 2005 and will assist in placing more focus on strategic economic development and the role of the municipality. • But, it is clear that interventions to date have not made any significant impact on the economic well being and the skills profile of the community. the dplg June 2007 15

RESEARCH DONE IN THE NODES. PRELIMINARY IMPACT ASSESSMENTS : DETAILS PER NODE: ALFRED NZO the dplg June 2007 16

PRELIMINARY IMPACT ASSESSMENTS: ALFRED NZO Key findings for service delivery achievement: Alfred Nzo • Water, sanitation and electricity: 72000 (57%) of hhs has benefited from provision of water, with the backlog standing at 54000 hhs in 2006 – the R 108 m currently being spent on 25 water projects will not be sufficient to eradicate the backlogs. As of 2006, 47% of hhs receive sanitation services below RDP standards. The rural sanitation programme currently delivers 10 000 VIP toilets per annum – but to eradicate the backlogs this programme will have to be accelerated to 30 000 units per annum. • Electricity: 10710 connections made between 2003 and 2005. 69% benefit from FBW; FBE has improved from 5% to 33% • Housing: 4521 units at the cost of R 82. 9 billion were planned for 2006. 76% of housing project had been completed benefiting 4332 hh; Additional 1006 disaster relief houses were built 2001 -6. the dplg June 2007 17

PRELIMINARY IMPACT ASSESSMENTS: ALFRED NZO Key findings for Economic Development achievements: Alfred Nzo • • • LED projects being implemented are creating jobs and are well received by community. But, these initiatives are not set up to deliver jobs at scale – the majority of new employment being created is still through the infrastructure investment programme. Most projects are in a healthy state, with some support from stakeholders such as Dpt Agriculture. Early signs are that poor business management skills may limit the success of these projects. the dplg June 2007 18

RESEARCH DONE IN THE NODES. PRELIMINARY IMPACT ASSESSMENTS : DETAILS PER NODE: ALEXANDRA the dplg June 2007 19

PRELIMINARY IMPACT ASSESSMENTS: ALEXANDRA Service delivery achievement: Alexandra • • Water and sanitation: In Alexandra, 79% of households have direct water connections within the stand 21% use communal taps. Access to flush toilets now stand at 97% (an increase from 86% in 2001). Electricity: Electricity connections in Alexandra has improved from 72% (2001) to 88% (2005), with 17000 new pre-paid connections installed since 2001. No significant improvement in the use of electricity for heating, but the use of electricity for lighting increased dramatically from 62% to 88% and for cooking from 55% to 84%. Health services: Alexandra has 4 clinics as well as access to Edenvale hospital. Upgrading of all these facilities have been undertaken and staff in these facilities have benefited from skills development interventions. 20 people have been trained as Community care workers. Three ambulances recently purchased have improved emergency services. Housing: large scale housing delivery in Alexandra has been constrained by the need for relocations (de-densify), challenges with acquiring private owned land for housing, need for affordable rental housing, overcrowding of hostels, difficulties with formalising backyard shacks, the need to upgrade and extend the capacity of bulk infrastructure. In spite of this, to date, 1200 units have been built and plans in place for 11 000 units. 3000 units were built for relocated families. 5434 stands are being transferred to qualifying households. After 5 years of negotiations, an MOU and some funding is now in place to acquire private land for new housing development. the dplg June 2007 20

PRELIMINARY IMPACT ASSESSMENTS: ALEXANDRA Economic Development achievements: Alexandra • • • As of 2005, only 7% of hhs earn more than R 5000/month, with 20% existing on less than R 1000/month. In 2005, 33% of people were employed full-time, while 18. 5% working part-time or doing piece work. Given the poor skills profile, low incomes and high unemployment in the area, the economic interventions are now starting to focus on access to employment information, training of entrepreneurs and assisting with job placing. To date, 17 000 short-term job opportunities have been created, mainly through the construction processes in the node. A Business Support Centre and Employment information Centre have now been established and the Dpt of Labor has committed R 25 m to fund training of residents for the next 5 years. the dplg June 2007 21

RESEARCH DONE IN THE NODES. PRELIMINARY IMPACT ASSESSMENTS : DETAILS PER NODE: MOTHERWELL the dplg June 2007 22

PRELIMINARY IMPACT ASSESSMENTS: MOTHERWELL Service delivery achievement: Motherwell • • Water and sanitation: 48% of households are benefiting from FBW and 85% of hhs are benefiting from basic and above sanitation services. The bucket system is still in use at a limited scale. At 2006 all hhs are receiving some form of refuse removal service (up from 88%). A communitycooperative is being formalised to [provide this service in the informal settlement. Electricity: 29 108 hhs have access to electricity as of 2005 (out of 32000 hhs), of which 48% benefit from FBE. Health services: 7 facilities are operating, with the all the fixed clinics having active community health committees. Lack of staff, equipment and integration between metro and province services is a challenge. Housing: 6000 houses have been delivered to date, with projects for 4551 houses are in various stages of completion. Quality construction is a challenge – of the 6000 houses built, 1000 were declared unfit for habitation and corrective action has been undertaken. the dplg June 2007 23

PRELIMINARY IMPACT ASSESSMENTS: MOTHERWELL Economic Development achievements: Motherwell • • • 2004 research shows that of the 630 local small businesses, the majority are survivalist and operate to meet basic household needs, with very limited labor absorptive capacity. To date, 6000 short term jobs have been created through the infrastructural programme. 394 SMMEs were hired and 180 trained through the programme. A small business incubator, Hydroponics project, ploughing fields and car wash projects has been established, subsidized with municipal funding – anticipated impact of these project is small. Most of the projects to date have been more “poverty alleviation” focused, relying on continues subsidization from the municipality. A SMME Development Strategy and a Skills Audit has now been completed – as these areas are not the competency of the municipality, strong support is needed from the province, DTI, Dpt Labor to change the poor skills profile and low levels of economic activity in this node. the dplg June 2007 24

RESEARCH DONE IN THE NODES. ECONOMIC PROFILING OF THE 21 RURAL AND URBAN NODES the dplg June 2007 25

THE NODAL ECONOMIC DEVELOPMENT PROBLEM v v v Insufficient and unreliable economic information Project-specific approach vs strategic, nodal-wide advantages Deficiencies of economic inputs into IDPs and nodal business plans Limited economic productive capacity in the nodes (eg. business capital, infrastructure, marketing info etc) Absence of specified role for, specifically sector department. In response to these challenges, a Programme of Action for Building Productive and Sustainable Nodal Economies was developed. This POA is intended to: Ø provide an understanding of the economic potential in the nodes Ø identify opportunities for public and private sector investment Ø identify barriers and constraints to economic activity Ø recommendations on strategic interventions to improve the nodal business climate (including aspects of current public agencies/institutions tasked with supporting local entrepreneurs) the dplg June 2007 26

NODAL ECONOMIC PROFILES: CONTENT OF EACH NODAL ECONOMIC PROFILE Introduction Key Data Points Current Action Introduces the node; summarizes key issues Lists pertinent acts and figures Describes current interventions Snapshot Geography, Vegetation, Climate, Soil Governance Area Summary Spatial Development IDP Assessment Key Challenges Demography Development Projects Local People Portrait Income and Employment Education Health Development Scorecard the dplg June 2007 27

UKhahlamba Ugu Umkhanyakude Rural Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (1/5) l A large, landmark tourism investment is needed to increase the profile of the area substantially. This will have positive spin-offs for small businesses as well l The agricultural potential of the area needs to be realised through provision of funding for local subsistence farmers to upscale to commercial ventures, and upgrading of infrastructure such as irrigation systems, market access routes, storage facilities, etc. l Investments which provide direct revenue for the municipality will help to address public service backlogs. The proposed hydro-electric plant at the Jozini Dam is a prime example of this, since it will address electricity backlogs, and will also generate revenue through the sale of electricity to other parts of the country and neighbouring states l Investments in the tourism sector need to be supported and fast-tracked because this is the sector that provides the multiplier effect for growth in the rest of the economy. Black entrepreneurs need to be educated and trained to be able to participate in this sector and reap rewards from it. This must be done in conjunction with creating new tourism initiatives in the rural area l The district municipality needs to provide incentives for new investment, for example, by waiving reticulation fees, lowering planning fees, providing rates holidays (e. g. for the first 5 years), reducing the cost of water, electricity and waste removal to be more competitive, etc. l Build a larger Chamber of Commerce, and possibly become more integrated with the Durban Chamber of Commerce, to allow members to have better visibility on investment opportunities and to work together to capitalise on them l Improve basic road, water and electricity infrastructure l Create a public-private sector model to incentivise private sector investment in agricultural value added processing l Buy in from a provincial level l Collective marketing strategy for the node and neighbouring nodes l Create a forum for all types of farmers to share experiences, knowledge and networks l Incentive structure for small and large farmers to form co-operatives or joint ventures between themselves the dplg June 2007 28

Umzinyathi OR Tambo Alfred NZo Rural Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (2/5) l The area has the opportunity to produce a range of crops, livestock, and forestry products - national demand conditions are particularly strong for meat and forestry products; however, there is strong local demand for grains, fruits and vegetables l Investment opportunities in the area generally relate to agro-processing, including biofuel production, milling, and hide processing, or are linked to eco-tourism l Key constraints include low education and skill levels, high input costs, weak market access, and in the case of tourism, a lack of strategy and marketing efforts l To address this, it is imperative that skilled mentors are made available to farmers, that a collaborative body be developed to assist in sourcing inputs, marketing and transporting products l Finally, the private sector should be targeted with an aggressive investment promotion programme l Improve basic road, water and electricity infrastructure l Make the land claim/land tenure process more transparent l Create a public-private sector model to incentivise private sector investment in the tourism and forestry sector l Marketing strategy for the node l Address skills gap for subsistence farmers l Address skills gap within municipalities l Mentorship programmes to bridge the skill gap between emerging and commercial farmers l Make the land reform process more transparent l Create a public-private sector model to incentivise private sector investment l Address skills gap within municipalities l Manufacturing in Msinga the dplg June 2007 29

Zululand Rural Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (3/5) l Create the incentives for tourists and operators to come to the area: complete roads, build accommodation in e. Makhosini, create attractions, develop products, etc. l Work with tour operators and tourism businesses within and nearby the node to create and market attractive packages that link multiple destinations Support key investment opportunities, including the Pongolapoort Dam development and the construction of lodges in e. Makhosini Valley Build a mentorship system between established and emerging farmers Create structures / organizations to aggregate emerging farmers and decrease input and transport costs Attract private investment – a key place to start is the opportunity for a sugar mill on the Makatini flats, which would be a great boost to emerging sugar farmers in Zululand l l l Maluti l l Address skills gap within municipalities l Mentorship programmes to bridge the skill gap between emerging and commercial farmers l Develop an effective marketing strategy and delivery mechanism for tourism – There is a need for supporting investments in the sector, because this is the sector that provides the multiplier effect for growth in the rest of the economy Sekhukune – Black entrepreneurs need to be educated and trained to be able to participate in this sector and reap rewards from it. This must be done in conjunction with creating new tourism products highlighting the area scenic beauty l Water, infrastructure and skills are all common constraints across most sectors l Promising investment opportunities include: – Mining: Several new mines to be developed; opportunities for supporting industries (accommodation, housing, retail, restaurants / catering, processing) – Agriculture: Bio-diesel production to supply mining industry; fruit and vegetable processing plant – Tourism: Vacation property and resort development the dplg June 2007 30

Chris Hani Rural Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (4/5) l Improve basic road, water and electricity infrastructure l Create a public-private sector model to incentivise private sector investment in agricultural value added processing – Buy in from a provincial level l Collective marketing strategy for the node and neighbouring nodes l Create a forum for all types of farmers to share experiences, knowledge and networks l Incentive structure for small and large farmers to form co-operatives or joint ventures between themselves Central Karoo Busbuckridge l l l A comprehensive tourism strategy must be developed and implemented A comprehensive agriculture and land use plan must be developed and implemented (including: development of veterinary support services, utilisation of natural resources, priority to agri-processing investment opportunities) Municipality and other government instruments can assist cooperatives and increase viability of community projects Blockages and service backlogs in the system must be addressed Land claims need to be urgently fast tracked Bushbuckridge can exploit the fact that they are in a UNESCO Biosphere, but needs to integrate its tourism activities into provincial tourism plans l Scale up current initiatives like Karoo Leather and Beaufort West Hydroponics l Build a correctional facility outside Beaufort West l Investigate the opportunity to introduce more game in Karoo National Park l Make Karoo Lamb a protected brand to increase the value of meat produced in Central Karoo l Upgrade the rail link between Gauteng and Cape Town the dplg June 2007 31

Maruleng Kgalagadi Rural Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (5/5) l The district and local municipalities must become more efficient in dealing with the private sector when potential investment opportunities are being undertaken (reduce delays) l Focus on a few specific opportunities that prove to be both viable and sustainable l Key learning from past projects must be applied to guide future actions l Municipality must initiate projects but ensure that the beneficiaries take control and responsibility for future activities l Improve basic road, water and electricity infrastructure l Actively facilitate and incentivise private sector investment in agricultural value added processing in cooperation with the District Municipality as well as Provincial departments and agencies l Develop an effective branding and marketing strategy for the area in respect of both tourism and agricultural offerings l Develop and implement a spatial development framework for the node to actively manage development and investment and more effectively retain potential benefits the dplg June 2007 32

Urban Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (1/3) Motherwell Ghaleshewe INK l Close Skills Gap: Raise quality of basic education, improve English language skills, establish tertiary institutions in area / trade schools, establish apprenticeship and internship programmes, etc. – Target growth sectors in the Durban economy (knowledge industries, chemicals, metals, transport and logistics), as well as construction and trade skills to help workers access employment opportunities along the growing North Coast l Support Local SMME’s: Reduce constraints to local business growth through an ongoing business support service that would provide mentorship and help entrepreneurs create business plans, apply for funding, and access larger markets. Also, build quality trading space located in high traffic, secure areas. l Market the area to large private investors and continue to improve the environment for external businesses l In the long-term Kimberley could be positioned as an important hub in the regional flow of goods between Johannesburg and Cape Town, and between Durban / Richard's Bay and the west coast of Southern Africa. This will require that investment strategies of entities in the national transport network are designed to achieves this, rather than some other pattern. l In the absence of being able to reposition Kimberley in the national spatial economy, attention must be paid to up-skilling residents for opportunities outside of the area and eliminating any obstacles they may have in moving elsewhere. l Kimberley’s short-term opportunities lie in mineral beneficiation, tourism and agro-processing. Given the relatively high quality of the Northern Cape’s matric results, it is possible that further opportunities in the services space – eg call centres – exist. l In Galeshewe, the opportunities for any meaningful job creation revolve around housing delivery and public sector construction. l The housing market is beginning to tick over, but concerns about the enforceability of property rights remain l The area’s business climate is poor and more work needs to be done on addressing this l Much more attention needs to be paid on increasing residnetial densities l Given Motherwell’s proximity to Coega, attention should be paid to maximising the development potential of this by (a) focusing skills training in Motherwell on the skills needed in Coega and (b) giving its residents preference in allocating employment from Coega the dplg June 2007 33

Alexandra Focusing on business upgrading through building partnerships with businesses in the surrounding area, while also encouraging formalisation, may improve the business environment l Moving more swiftly on tenure issues will help unlock Alexandra’s potential l Developing the franchised landlord model, as well as the other housing stock and tenure options which the ARP has developed, offers the prospect of real improvements to the area l The erection of decent housing in the area is a continuing priority l Transport infrastructure needs to be coordinated in order to increase the efficiency of public transport l The development of the transport node at Kuyasa should be based on Mitchell’s Plain’s Station Plaza in order to become a thriving commercial centre l Many businesses in Khayelitsha are highly informal, and assistance with formalisation would be helpful l Transport infrastructure needs to be coordinated in order to increase the efficiency of public transport l The Mitchell’s Plain False Bay College branch is in need of funding from the Province’s FET grant l Social interventions are necessary to limit gang activity in Mitchell’s Plain l Informal businesses in Mitchell’s Plain need to be educated about the benefits of formalisation Mitchell’s Plain l Kayelitsha Urban Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (2/3) the dplg June 2007 34

Mdantsane Urban Nodes: What needs to be done? Solutions to Constraints / Investment Opportunities (3/3) l Top officials in Buffalo City municipality must commit to MURP for the project to have full-scale benefits l The Department of Labour could reassess the role of the Border Training College, which could be used to upskill Mdantsane residents and prepare them for future employment at the IDZ l National government departments need to accelerated their processes when and where their action is required, e. g. Mount Ruth development and providing vacant land for housing l National government needs to recognise that Mdantsane can only grow if East London grows – this may require harbour upgrades l A change in policies is required to improve the current human resource bottlenecks at MURP and at the municipality to speed up service delivery and planning processes the dplg June 2007 35

NODAL ECONOMIC PROFILING: INVESTMENT OPPORTUNITIES IDENTIFIED v v Key projects are selected that could form the basis for kick-starting the nodal economy. A profile of each project is provided: - description - economic rationale - employment - enabling conditions - contact details - status of available documents FOR THE 13 RURAL NODES, 88 INVESTMENT OPPORTUNITIES HAVE BEEN IDENTIFIED AND PROFILED. the dplg June 2007 36

Economic profiling project: actions for sector departments – Rural Nodes – Urban Nodes the dplg June 2007 37

Rural Nodes Department of Agriculture Alfred Nzo Bushbuckridge Central Karoo Chris Hani Kgalagadi Maluti-a-Phofung • • • Initiate mentorship programme between established and emerging farmers Aggregate emerging farmers and decrease input and transportation costs Prioritise support for investment opportunities in bio-diesel and agri-processing • Create and implement comprehensive Agriculture and land use strategy which incorporates development of veterinary support services, utilisation of natural fauna and gives priority to agri-processing Scale up initiatives like Karoo Leather and Beaufort West Hydroponics Initiate mentorship programme between established and emerging farmers Aggregate emerging farmers and decrease input and transportation costs Focus on a few specific opportunities that prove to be viable and sustainable Apply key learnings from past projects Create mentorship programme to bridge the gap between commercial and emerging farmers Develop cooperative thinking - Cooperatives pool of resources and output, Partner experienced private sector partners with new / emerging farmers Identify new crops or new markets that require less expensive inputs Address skills gap for local subsistence farmers Prioritise support for investment opportunities in bio-diesel and agri-processing Aggregate farmers around the Ugu Fresh Produce Market Provide funding for specific investment opportunities with good potential Create a forum for all types of farmers to share experiences, knowledge and networks Introduce incentive structure for small and large farmers to form co-operatives or joint ventures between themselves Create a public/private sector model to incentivise private sector investment in value added processing of agricultural products Provide funding for small farmers to upscale into commercial ventures Address skills gap for local subsistence farmers Create mentorship programme to bridge the gap between commercial and emerging farmers Build a mentorship system between established and emerging farmers Create structures/organisations to aggregate emerging farmers and decrease input and transportation costs Attract private investor for sugar mill on the Makatini flats • • Maruleng OR Tambo Sekhukhune Ugu Ukhahlamba • • Umzinyathi • • • Zululand • • Umkhanyakude • the dplg Source: Node Profiles June 2007 Summary of Actions for Dept of Agriculture 1. Initiate mentorship programmes between commercial and emerging farmers 2. Aggregate emerging farmers and decrease input costs 3. Prioritise support for investment opportunities in bio-diesel and agriprocessing 4. Scale up small scale viable initiatives to commercial 5. Address Skills gap for local farmers 6. Activate targeted investment opportunities 38

Rural Nodes Department of Environmental Affairs and Tourism Alfred Nzo Bushbuckridge Central Karoo Chris Hani Kgalagadi Maluti-a-Phofung Maruleng OR Tambo Sekhukhune Ugu Ukhahlamba Umkhanyakude Umzinyathi Zululand • Leverage natural endowment and promote eco-tourism • Assist and support municipality in the development of a comprehensive tourism strategy. – Develop strategy to leverage traffic on KNP access routes – Integrate BBR into district and provincial tourism plans • Exploit BBR’s status as a UNESCO Biosphere and use it to draw more focus to Bushbuckridge • Investigate opportunity to introduce more game in Karoo National Park • Foster closer cooperation to ensure synergy between EC tourism strategies and local tourism initiatives • Up-skill the municipality to become more efficient in dealing with the private sector • Focus on few specific opportunities that are bankable • Develop an effective marketing strategy and delivery mechanism for tourism – There is a need for supporting investments in the sector, because this is the sector that provides the multiplier effect for growth in the rest of the economy – Black entrepreneurs need to be educated and trained to be able to participate in this sector and reap rewards from it. This must be done in conjunction with creating new tourism products highlighting the area scenic beauty • Create/determine organisational responsibilities of Provincial Tourism authority, District Tourism office, Municipal tourism office • Develop and implement tourism strategy • Create tourism marketing strategy for the node • Create private/public sector model to incentivise investment in the tourism • Promote and support investment in vacation property and resort development • Educate and train local entrepreneurs to reap rewards from tourism • Assist in the development for a collective marketing strategy for the node and neighbouring nodes. • Assist and support municipality in the development of a comprehensive tourism strategy. • A large, landmark tourism investment is needed to increase the profile of the area substantially, and will have positive spin-offs for small businesses as well • Create private/public sector model to incentivise investment in the tourism • Create incentives for tourists and operators to come to the area – Build accommodation in e. Makhosini, develop attractions and create appropriate products and in the area – Co-ordinate the creation of multiple destination packages • Lobby for the completion of roads to tourist spots the dplg Source: Node Profiles June 2007 Summary of Actions for DEAT 1. Assist local municipalities with the development and implementation of tourism strategies which are integrated into South Africa’s global tourism plan. 39

Rural Nodes: Department of Land Affairs Summary of Actions for Dept of Land Affairs Bushbuckridge • Settle claims on Bushbuckridge Conservation Area and other estates where claims have halted development process Maruleng • Resolve land claims as speedily as possible to prevent any unnecessary disruption of agricultural production. OR Tambo • Make land claim/tenure process more transparent • Speedily expedite outstanding land claims Sekhukhune Ugu • Facilitate private ownership of land for the development of Mountain Resort and associated Drakensberg Escarpment Cluster of Projects • Prioritise land that has high tourism potential, and use this as a lever to convince the key stakeholders of the economic benefit of expediting the process • Speedily expedite outstanding land claims • Work with the Land Claims Commission to resolve existing Umkhanyakude claims Ukhahlamba Umzinyathi • Make land claim/tenure process more transparent Zululand • Speedily expedite land claims near around Pongolaport Dam the dplg Source: Node Profiles June 2007 1. Formulate a policy applicable to all nodes – especially former homelands to fast track all claims. 2. Expedite the land claims as they seem to be the primary deterrent to private investment 40

Rural Nodes: Department of Provincial and Local Government Alfred Nzo • • Summary of Actions for dplg Improve basic road, water and electricity infrastructure Target private sector investment with an aggressive investment promotion programme 1. Bushbuckridge • • • Increase capacity in LED, especially in Tourism Address skills gap in local municipality to decrease reliance on consultants. Improve basic road, water and electricity infrastructure Central Karoo • Improve basic road, water and electricity infrastructure Chris Hani • Improve basic road, water and electricity infrastructure Kgalagadi • Ensure that beneficiaries take control for LED Projects Maluti-a-Phofung • Address skills gap in local municipality Maruleng • Improve basic road, water and electricity infrastructure • • Support private/public sector model to incentivise investment in the tourism and forestry sector Address skills gap in local municipality Sekhukhune • • Improve basic road, water and electricity infrastructure Create framework to ensure that local businesses benefit from mining boom Ugu • • Improve basic road, water and electricity infrastructure Provide new incentives for local investment Ukhahlamba • • Improve basic road, water and electricity infrastructure Assist in creating and supporting of a public/private sector model to incentivise private sector investment Umkhanyakude • • Improve basic road, water and electricity infrastructure Focus on investments that will lead into direct revenue for municipality –e. g. the proposed hydro-electric power station at the Jonzi Dam Umzinyathi • • Improve basic road, water and electricity infrastructure Address skills gap in local municipality Zululand • Improve basic road, water and electricity infrastructure the dplg OR Tambo Source: Node Profiles Increase municipality's ability to provide basic services and bulk infrastructure by • Addressing capacity shortages in local municipalities • Provision of adequate funding June 2007 • Up-skill the municipality to become more efficient in dealing with the private sector • Focus on few specific LED opportunities that are bankable 2. Create and support private/public sector equitable partnerships that attract private sector investment 41

Rural Nodes: Department of Trade and Industry Summary of Actions for Dept of Trade and Industry Alfred Nzo • Target private sector investment with an aggressive investment promotion programme Central Karoo • Promote Karoo Lamb as a protected brand to increase the value of Chris Hani • Capacitate district municipality to create a growth strategy for the Queenstown industrial area OR Tambo • Support private/public sector model to incentivise investment in the tourism and forestry sector Sekhukhune • Create framework to ensure that local businesses benefit from mining boom Ugu • Build a larger Chamber of Commerce and align it with the Durban Chamber of Commerce to allow better visibility on investment opportunities Ukhahlamba • Assist in creating and supporting of a public/private sector model to incentivise private sector investment Umzinyathi • Assist in creating and supporting of a public/private sector model to incentivise private sector investment Zululand • Support tourism development around Pongolapoort Dam • Attract private investment into sugar mill on Makatini Flats the dplg Source: Node Profiles June 2007 1. Support a public/private sector model to incentivise private sector investment 2. Create greater visibility on investment opportunities for the private sector 42

Rural Nodes: Other Government Departments Department of Water and Forestry Affairs Department of Arts & Culture Department of Transport Node ACTIONS Zululand • Provide water to emerging farmers, especially in the vicinity to Injaka Dam OR Tambo • • Bushbuckridge • Support investment into Pongolaport Dam area and surrounds Maluti • Intervene in the Basotho Cultural Village within the Golden Gate National Park – Lobby for a solution of the two parks merger which is preventing the already built accommodation from being utilized – Approve the involvement of the private sector within the Village Expansion project Take control of the development of Basotho Cultural Village Bushbuckridge • Tar roads to potential tourist sites including the proposed hiking train, Andover and Manyeleti Central Karoo • Upgrade the rail link between Gauteng and Cape Town OR Tambo • Work with SARA to improve the basic road infrastructure Prioritise development of transport networks in potential zones of economic development Zululand • Coordinate with South African Roads Authority for the completion of roads in to tourist attractions. • Support transportation development to Pongolaport Dam area and surrounds Department of Public Works ALL Department of Education Bushbuckridge Department of Correctional Services Central Karoo Work with local municipalities and supply water from major sources Work with municipality to improve delivery of drinking water to increase the delivery of Support private/public sector model to incentivise investment in the forestry drinking water sector • Assist local municipality in the delivery of service backlogs Accelerate delivery of bulk infrastructure with priority given to potential commercial zones • Re-activate Mapulaneng and complete revival of Hoxani training college Utilise teacher training colleges that were shut down • Build a correctional facility outside Beaufort West Invest in the node while attempting to address prison overcrowding the dplg Source: Node Profiles SUMMARY June 2007 43

Urban Nodes: Government Departments Department Node Alexandra Galeshewe Khayelitsha Department of Housing Mdantsane Motherwell Alexandra Galeshewe Department of Trade and Industry Department of Transport ACTIONS • • • I. N. K • • Khayalitsha • Mitchell’s Plain • Motherwell • • Galeshewe Khayalitsha Mdantsane Enforce of property rights and manage tenure issues Deliver public housing backlog Prioritise erection of decent Housing SUMMARY Address housing backlogs Deliver public housing backlog Increase densities in lower density areas Increase residential densities to address backlogs Enforce of property rights and manage tenure issues Encourage the formalisation of businesses Support viable projects that leverage the higher education standard in Galeshewe e. g. Call Centres Encourage the formalisation of businesses Provide skills and mentorship to local business people Support the construction of a local trading space Market area to private investors Support local SMMEs and reduce constraints to business growth Encourage the formalisation of businesses Leverage Coega to support the business climate Create transport network that will support Kimberly as a hub Increase the capacity for traffic between Johannesburg and Cape Town through the nodes • Increase the efficiency of public transport and increase • Develop the transport node around Kuyasa and model it on efficiency of public Mitchell’s Plain Station transport • Cordinate SARA to initiate developments around Mt Ruth Station Mitchell’s Plain • Increase efficiency of public transport Department of Labour Source: Node Profiles Mdantsane • Make use of, sell or re-establish Border Training Centre the dplg June 2007 Re-assess role of Training Colleges 44

NODAL ECONOMIC PROFILING: NEXT STEPS The Profiles are intended to act as a decision support tool for government and other stakeholders who would like to understand act on the economic character and potential for each node. Work to be done in 2007/08 – 2009/10: 1. Cabinet Lekgotla: formally report on progress to date, and next way forward activities. Future reporting in line with the GPo. A 2. Design an Institutional Support Mechanism – off the findings of the national, provincial and municipal economic development institutional review 3. National Nodal Economic Development Indaba: formally launch the Nodal Economic Development Programme (The Profiles, Atlas, the Agency and concrete implementation support commitments) 4. Nodal Economic Development Programme of Action: A consolidated implementation scheduling in the implementation of the Nodal Investment Atlas, and Institutional Support Mechanism 5. State of the Nodal Economies Report – pulling together key themes for influencing government thinking around economic development in townships and rural areas 6. Economic Development Capacity Building: Township Practitioners Development Programme, and possibly, Certified Economic Developers Programme (Ce. DC) the dplg June 2007 45

RESEARCH DONE IN THE NODES. LESSONS LEARNT IN THE IMPLEMENTATION OF THE URBAN RENEWAL PROGRAMME (Note: ISRDP Lessons Learnt study currently underway, to be finalised July 2007). the dplg June 2007 46

URP LESSONS LEARNT LESSONS PERTAINING TO THE PROJECT CYCLE: - Project selection - Project objectives - Project preparation and design - Institutional arrangements - Implementation SECTORAL LESSONS - governance, finance, institutions - Economic development - Service delivery - Infrastructure and housing - Social services - Greening & environment - Public safety - Communications More than 100 lessons, supported by 25 case studies and stories. the dplg June 2007 47

URP LESSONS LEARNT INSTITUTIONAL PROCESSES q Institutionalising the programme is crucial. Good will and individual programme champions are useful, but the programme needs to be seated within institutional structures, contractual arrangements and clear lines of accountability. q Area based approaches such as the nodes have offered the greatest focus and coordinated interventions. GOVERNANCE q Sound active leadership at political and administrative level is critical for the success of integrated nodal development. q Participatory structures (ward committees, development forums) must be resourced and capacitated for effective community ownership. q Learning by doing requires that parallel learning take place along side implementation. Regular strategic reviews should be undertaken in the URP to ensure cross learning between nodes and broader. the dplg June 2007 48

URP LESSONS LEARNT SERVICE DELIVERY q URP is not only about housing and care has to be given to finding a balance between infrastructure development and human development related activities. q Unrealistic service standards such as in housing can cause a slow down in delivery, compromise quality and result in stalled projects. q Without control over the housing budget, cities have difficulties meeting delivery targets set by them, more so in the URP nodes which have severe backyard overcrowding, old informal settlements and new in-migration. q Land, its identification for housing and preparation and servicing for township development requires the coherent support from all of government. SOE’s and parastatals must make their land holdings available for development that will benefit the nodal communities. the dplg June 2007 49

URP LESSONS LEARNT LOCAL ECONOMIC DEVELOPMENT q Resources need to be committed for adequate supervision, training and support for emerging contractors. q Using public investment in a coordinated manner to prompt private sector response has proven to be a successful strategy – support must be provide to other nodes to implement this strategy, using IGR structures to get binding commitments from other spheres of government. q Townships are not and cannot be self-sufficient – linkages with nearby commercial areas are important. Analysis of the expanding sectors in the sub-regional context is important to assess which sectors offer the best possible opportunities for employment of the nodal communities. the dplg June 2007 50

URP LESSONS LEARNT FINANCIAL VIABILITY q Preparation funding is critical during the first 24 months of the URP, to establish PMUs, undertake essential planning and to source/lever delivery budgets from line functions. q The privates sector is under-invested in the townships and this represents an un-tapped opportunity. Government must be able to direct this interest by careful packaging and marketing of projects to get maximum benefit for the area. q If dedicated programme funding is made available for the URP, a model to explore is a requirement that it be made available on the basis of gearing on a set ratio with other funding. MANY OF THESE LESSONS OF THE ISDP AND URP WERE INCORPORATED INTO THE “FRAMEWORK FOR MANAGING JOINT PROGRAMMES” a joint DPSA DPLG project approved by Cabinet and included into the IGR Toolkit. the dplg June 2007 51

ISSUES FOR INTERVENTION ISSUE RESPONSIBILITY Integrate/mainstream the coordination structures of the isrdp and urp into provincial (PCFs) and district (DCFs) IGR Structures: working with provinces DPLG - URD and Governance Branches Facilitate a coordinated LED support programme for the nodes: closer collaboration between DPLG-PCAS-DTI DPLG: URD, Governance, FBSI Branches Knowledge sharing programme: learning events, node-node twinning and exchange visits, training seminars. DPLG: URD, Governance branch, SACN, IDT and NT Support nodes to improve communication and community participation. DPLG: URD & FBSI, CS the dplg June 2007 52

ISSUES FOR INTERVENTION ISSUE RESPONSIBILITY Strengthen sector support to the nodes: DTI, Agriculture, Health, Education DPLG with support from portfolio committee. (eg, call sectors to portfolio committee to account for support to the nodes). Strengthen the political championship Oversight: accountability of champions assigned to each node. Minister, with support from Portfolio Committee Intervene decisively and quickly in cases of: Minister and Portfolio Committee weak political leadership at nodal and provincial level Conflict between political and administrative in a node Weak IGR between node-districtprovince In cases where this is weakening delivery. the dplg June 2007 53

URD BRANCH BUDGET URBAN AND RURAL DEVELOPMENT 2006/07 Adjusted Appropriation 2007/08 2008/09 2009/10 Medium-term estimates MTEF Baseline Management 1, 023 2, 163 2, 272 2, 373 Urban Renewal Programme Management 1, 234 2, 286 2, 400 2, 513 Urban Renewal Monitoring and Evaluation 1, 864 2, 198 2, 308 2, 416 ISRDP - Management 2, 413 2, 349 2, 466 2, 582 ISRDP - M&E 1, 926 2, 284 2, 398 2, 511 TOTAL OF SUBPROGRAMMES 8, 460 (10, 729) 11, 280 11, 844 12, 395 Notes: 06/07 budget adjusted from R 10, 729 m to R 8, 460 m. This downward adjustment of R 2, 269 million is mainly as a result of 3 vacant management positions: DDG position: recruitment completed, Cabinet endorsement received. Ms Lester will start 1 July 2007 EM URP: 2 unsuccessful recruitment processes during the year, Third recruitment process now conclude, candidate starts 18 June 2007. EM ISRDP: vacant since Dec 2006. Interviews July 2007. Four new Deputy Directors (3 female, 1 male) recruited and started January 2007. the dplg June 2007 54

THANK YOU the dplg June 2007 55