Water seem to be a scarce resource and hence boreholes is desperately needed, with a number of promises made, coupled with applications to government departments the response is just as dry as the area and provide serious threat to the Nguni Cattle project. Department of Agriculture need to intervene in this regard, however the extension officers of the departments is not of any help and the ward that has to be served in this regard is not visited.

The provincial government officials that were present indicated that capacity constraints are a challenge. There are ten wards in the area and only five extension officers, the officials indicated that if the extension officers don’t visit the members of the community must make it a point to go and see them at their offices.

A further proposal was made by DBSA that the Eastern Cape Development Agency, IDP, and Municipal Infrastructure Grant be engaged to ensure proper integration, co-ordination and participation.

A base for economic development should be created, and the bank must bolster institutional arrangements;

Infrastructure like the storage of water in dams needs to be looked at;

Issues should be taken up with Department of roads to ensure accessibility to markets;

Ownership of Nguni cattle individually versus community ownership could be a problem;

Engagement with Fort Hare at another level is important;

The role of government in the project should be assessed;

The participation of the local portfolio committee that accompanied the committee served to be extremely successful to further engage these and related issues once the committee has left;

The participation between the local community and the DBSA should be a partnership of choice;

The grazing of the cattle or other input cost should further be examined e.g.: nutrients and other hidden cost to the expense of the community that eat in the profitability of the project;

The primary role of the tertiary institution like Fort Hare cannot be under-estimated which includes research, addressing the basic empowering of the poor community to a level of sustainability is extremely important not only to the project but as their function to the province and should be seen as a role model for other knowledge institutions;

The function of the Standing Portfolio Committee in the province should also be roped into the oversight activities;

DBSA funding should also leave capacity as a knowledge bank after all is said and done;

In the interest of Food Security a direct link has to be established between Department of Health and Agriculture;

C. Hegebe Womens Project: (Empowering Rural Women, Youth and Communities).

Reginald Manager: Oupa Mokwena

Gideon Moshewe: O R Tambo and King Sebatha Municipality

Miss Vuyokazi Bodlani and Miss Sandihle Makgaza are the founding members of the Sithembene Women Enterprise. As a result of their customer acquaintances and referrals they were brought in contact with the African Renaissance project that was run by the SABC as a program, this provided exposure that saw them visit a number of countries taking the African theme abroad. Taking part in the African week, holding exhibitions in Brazil and other countries. The organization also under-quoted for this event and soon found to be in financial difficulties due to in-experience in the business. The Sithembene Women Enterprise has good designers that are currently working with rural women in projects of traditional wear, doing work for some of the leaders in the communities eg. Enkhosi Holomisa and others.

They got partial funding from the poverty alleviation projects in the province and started a project with Enkhosi Holomisa’s consent. Training centres are planned in the area, which should include boarding facilities as the area is rural and accommodation is a concern. At this stage own funding are used by these women to keep their projects sustainable. They are also using students from the technikon that completed their studies and does not have any jobs. Since these students do have some knowledge it would be easier to maintain the standards as internationally required. The centre that they have in mind will also market and sell the products so as to remain viable and feasible and relevant.

The first group of trainees will be graduating in September; the second group will be graduating soon after. The centre will also be accompanied with chalet in order to give it a tourism vibe.

Another challenge is to assist those members of the community that did not manage pass matric and to assist with further education, hence the schools become essential in the area, for this project they do have the full support of the principles in the area which also include the churches, building partnerships with private sector, partnerships with small, medium to micro enterprises.

Funds dedicated from the Department of Arts and Culture is only promised for three years after which they need to be self-sustainable.

A task team from the Usuvumbo Fund has been set to assist in the area especially with schools where people can be trained, also to work with and to be in line with Local Economic Development programs that are also in line with the Municipal Intergraded Development Projects.

Assisting with poverty alleviation in schools by aligning these programs with school feeding schemes, to assist schools building in the area by providing the skilled labour and the necessary assistance that will assist with the school needs.

To allow all co-operatives into the projects so as to create one coordinated functioning body that would also facilitate job creation with departments and to construct a register to allow them to be identified. A corporate directorate spearheaded by the MEC’s-office will be set up which will facilitate the process and to prevent all the red tape around these and related projects.

The Department of Labour indicated that they will bring other departments on board but to no avail, this includes the Department of Social Development.

The Department of Arts and Culture promised to assist in his regard but promises made were never kept. The centre endeavour to link up with Aids related issues since the lost of good skilled workers is a concern which includes the untimely death of their designer a week before the committee visited the centre. Another challenge is the Umsufubu Fund that operates like a bank that benefits more specifically the urban entrepreneurs and leaves the rural development behind. A revised strategy has been proposed by the Director of the fund (Nkululeko Somhlahlo: Director) in the area in order to clear the barriers to entry. To ensure public representation and participation.

An urgent immediate need that were identified is the provision of office equipment and stationary, which should include internet, phone, fax facility and other facilities that would assist with the day to day operation of the centre and projects. The response of the Development Bank to this end was that these basic essential would be supplied funded from the chief executive fund.

The municipality through its Local Economic Development (LED) program unfortunately does not make provision for these types of activities since the Integrate Development Programs and LED’s does not cater for these projects, hence it become difficult for the DBSA to fund these projects. The inflexibility of the mandate creates some concern for the Bank to become proactive in some of the social development projects. The function of other funding agencies creates problems in that it does not function as it should and poses a problem that spill-over in the mandate of the bank, integration of other funding agencies and its lack of providing the basic services that start-up businesses need is of serious concern.

The Select Committee on Finance will further engage the Social Development Committee in the province to become our eyes and ear in the province to monitor progress on a constant bases.

The community women that attended the gathering raised challenges that they face which includes: available water supply, funds for raw materials, creative ideas that exist but does not materialize is a challenge access to markets for their products and transport of goods to proper markets with poor road system. They do however have a facility to exhibit their products, which include two small huts for which they do not have to pay any rental which also serve as training centres.

The chairperson indicated that the committee’s visit endeavours to bring all the stakeholders together. To unlock any bottlenecks that might exist and to source local government funding, if none exist to authorize those funds to be made available to communities like these. Councillor Ntisitho Maqukanya (Member of the Mayoral Committee), representing the Mayor of Mthatha was also present.

Other activities include Poultry, Beadwork, Dressmaking and other activities, however challenges that exist includes:

Space, Medication for Chicks, Feeding, Sawdust, and Transportation Challenges to markets.

The profits realized do not match the expenditure to maintain these types of farming. Possibility is to sell to e.g.. Umtata Hospital and other government institutions.

Not enough machines are available to all the women that are willing to work. These shortages cause tension among the women, all the women has skills and wish to proof their ability.

Integration of children into the economic activity in order to deal with persistence of crime in the area is of importance. The on big challenge is to bring all relevant departments together so as to ensure progress in these and related areas. Another challenge is to work cross boundaries in the interest of development and economic progress in the area.

The committee took note of responses by community members of persons in powerful positions of government, making promises that never materialize. It is a fact that skills do reside within rural communities and these skills have to be exploited to its full potential.

A resolution that was taken is that Mr Robertson will link with the relevant communities that the committee has visited and monitor the situation. The chairperson has pledged that the Eastern Cape is the committee’s special project and is determined to see these projects that the committee is visiting to its successful conclusion. The committee is also mindful of the DBSA’s mandate and the flexibility thereof for project that are economically viable but seemingly fall outside of its mandate. Hence the flexibility of the board of the DBSA to take decision in this regard that would have a meaningful impact on the lives of the rural communities.

Constraints that the DBSA is facing is that the bank has made a R1 billion offer to the Eastern Cape government for social infrastructure development but there seem to be a stale-mate on this matter. Five Hundred million was also availed for the Coega project but the banks still awaits a clearance certificate that seem to stifle the process and hence delay valuable investment and job creation.

Although the bank has offered funds for development departments are not taking hold of the opportunity, especially for capacity development. The only possible solution could be to request DBSA, National Treasury and the Eastern Cape Government to engage in a round table exercise in the interest of poverty alleviation, job creation and growth in the province. The money available to the Eastern Cape, the bank is thinking of ring fencing this money to keep it specific to the function it is appropriated for.

To do an evaluation of infrastructure expenditure and to call the MEC on Finance to account.

Getting a solid response from the National Treasury and EC Government on outstanding issues as indicated.

To assess the capacity of the Eastern Cape to budget in terms of the Medium Term Expenditure Framework, if not why?

In terms of the Thuba Makoti funds how many schools were build.

Outcomes of the first quarter expenditure.

Request the Fiscal and Finance Commission to assist with some of the Eastern Cape research issue.

Dealing with the DBSA Annual Report in September.

The status of the un-occupied houses in the Fort Beauford area.

Looking at issues of accreditation.

Dealing with mother bodies instead of individual bodies, also working with other organizations so as to match them Rand for Rand.

Request LED officers to present during oversight visits as well as MIG officers to present at hearings.

Also to invite the National Development Agency at the next set of public hearings and oversight visits.

Also to have some form of integration with other relevant departments when exercising oversight in the province.

Wednesday 10 August

During our visit at Coffee Bay the following were strongly noted:

Private sector and the community, co-funding by DBSA, initiated the project at Coffee Bay.

Poverty alleviation funding was also approved for the communities in the area.

Plans is in the pipeline for the construction of 50 lodges, to be implemented by the O R Tambo District Municipality through the Ntinga Development Agency)

It is noted that the camping ground at the Coffee Bay area still belong to the government, all other ground is communal ground that are in trust.

The Maphuzi area will be upgraded to a slip where boats can be made to dock, due to unregulated access of 4x4 vehicles the ground is eroded around the area.

The area also falls outside the nodal area of the province and should remain natural and untouched, hence special permission is required. Ripple development is discouraged; all development should be in one go.

DBSA’s position is that no development is agreed too if government is not in favour and laws does not permit.

Presentation: King Sabata Dalindyebo District Municipality

The following issues were discussed:

More people’s involvement in projects.

Crime in the area and the understanding that it does not drive tourism out.

Residence understands the importance of tourist to the area and is protecting the visitors.

Environmentalist is important to assist with impact studies to retain the area beauty and to advise on matters of development.

An environmental impact study has been done in the area, however a spatial development framework is non-existent at Coffee Bay, and Hole in the Wall.

Environmental Affairs contributed R100 thousand, however R300 thousand is needed, application was made through the O R Tambo Municipality.

All are in favour of development although he initially apposed the idea.

Five of the villages held meetings and it was accepted that development should take place.

It should also be in consultation with the community.

A matter for concern is that developers do want to develop in the area but the protocol procedures is not adhered too. Instead of first coming to the Headman they go straight to the chiefs.

Mr J Joja, a sub-headman agreed with this arrangement.

He is not apposed to the chiefs and their views.

Although development has been accepted, no development is taking place.

He also requested the committee to scrutinize the developers on their behalf.

They are fisherman and does not /cannot initiate any development.

Coffee Bay is identified as one of the Development nodes of KSD Municipality – ward 1 (Umtata Mouth – Hole in the Wall and some kilometres of the Wild Coast)

He indicated that firstly: the land need to be assessed.

The council approved the development of the land in ward 1.

Most planning will be along the coast and then inward.

Local municipalities and departments want do development but no development framework exist, hence problems around development arise which lead to no development.

They are of the opinion that the Easter Cape Development did not get very far with development in the area.

A policy was provided that indicated the development around the area: Wild Coast Development No: 720 Policy: (Coffee Bay – First Nodal Development and Hole in the Wall)

He stated that they were told to go to the chief and that the Spatial Development Initiative process started.

Development was proposed from Umtata to the Hole in the Wall.

This report was send to the Department of Environmental Affairs and Tourism, up until the committee’s visit no response were received more specifically with respect to the "record of decision".

Since the community and the developers could not facilitate progress the members of parliament was requested to intervene in this regard.

A poverty relief application was forwarded and received in the sum of R5 million which will be managed by Ntinga.

Adhering to the presidential call for development in the Eastern Cape wild coast area and other areas in the region the Bank wants to invest.

Local Investment Agency in partnership with Old Mutual is currently funding activities in the Eastern Cape.

DBSA helped with the environmental impact study, which was funded by the bank.

The bank indicated that they would be in discussion with the National Department of Environment Affairs and the provincial environmental affairs department as well as the United Nations Development Agency to look at issues of development and bio-diversity.

The bank advised communities to submit individual projects form their own training needs and bigger projects.

Partnerships – Community, developers and governments has to work together but the challenge is the legislative framework and the role of the local leaders.

To ensure that laws does penalize communities but that spatial development laws in consultation and relation with community work in the favour to benefit the poor.

A project viability study was undertaken at a cost of R400 thousand.

Environmental assessment has been approved, the Department of Environmental Affairs now has to issue a ROD (record of decision).

Spatial Development Framework, once it is approved the DBSA will support this project.

Should all the necessary papers and certificates be issued eg. Maphuzi the projects will continue.

The camping site: an impact study has been conducted however the ROD is still outstanding hence no development can take place.

Human Rights issue, land issues and other challenges stall progress.

Conservation Plan is identified, next spatial Development framework, strategies environmental assessment – these issues should be dealt with by August, hence people in the area need to make input in this regard.

Also to get smaller projects underway while bigger projects is on the way.

The environmental impact studies have been completed, it is with the National Department of Environmental Affairs and Tourism and a response in this regard is still forthcoming.

It was noted that although all the stakeholders are present the Environmental Affairs Department were not present, even-though they were invited.

Poverty relieve was given for the area by the national department.

The in dependant developers indicated that the community share in the development would be forty five percent.

The record of decision is still an issue that creates the bottleneck in the process of development.

The independent developers indicated that seven male and one female was representative of their BEE criteria which was unacceptable by the committee and that they need to revisit their directorship component. This could be equated to fronting which the committee strongly appose.

The composition of the forty five percent is a matter for concern to the committee. A record of decision for the hole in the wall site is still outstanding from the Environmental Affairs Department.

The feasibility study of the camping site is still outstanding.

Youth representation, woman are some of the issues to be dealt with, disabled involvement is also of concern. The absence of the Department of Environmental Affairs is a matter of concern since they are party to these projects in the decision-making process. The committee decided that they would be engaged at another level.

The Bank agreed to participation in the spatial development but request that all decisions be tabled in the council of the municipality so as to protect the DBSA that when they do commit themselves to the R200 thousand.

Mr Basophu will take initiative to follow-up matters in this regard and to take issue on this matters with the MEC.

The developers are of opinion that the 45% share holding is a gift to the community in line with their vision and mission. The bank was of different opinion and indicated that the only giving is from the community side since the land itself is an invaluable gift. The DBSA indicated that they would monitor the funding arrangement between the community and the outside developers while committing itself to assist with technical assistance especially with the campsite arrangement.

• He made a pledge that this will not be the last of his visit to the area.
• Elected officials need to be present at these engagements and not loose structures.
• To see if councillors are really functioning or if they are just there in theory.
• Although the Department of Environmental Affairs are primary in development in the area other departments should also be brought in as they might also have funding that the communities are not aware of.
• Councillors and chiefs need to work together
• The bank wants to encourage the local community and people of the area to submit their applications for smaller projects while the bigger projects are underway.

• More responsive decision-making from government departments is problematic.
• Economic Affairs chairperson of the Provincial Standing Committee should own the process.
• Policy frameworks should be looked at more closely.
• Government agencies should be involve in all projects that we exercise oversight with.
• The community were docile around the decision of the chiefs for the development that must take place in the area and it would seem that they would not want to appose the chief.
• The board of directors of the developers and the community involvement is questionable.
• The way forward is unknown; the community need to be empowered so as to be able to see the outcome of the development and the benefits to the community and area.
• The bank will provide the full detail of the impact assessment study once it is completed.
• Tender processes should be re-looked.
• Spatial development framework, political management, current developments and tendering, these are matters that have to be attended to by the O R Tambo and KSD district municipalities and these and the municipalities should own related processes.

Thursday 11 August 2005

• In terms of employment creation 296 potential jobs could be created.
• Projects will be labour intensive, although not of permanent nature.
• Possibility of funding beyond the OR Tambo municipal region is not yet possible.
• Cross boundary initiatives where both municipalities could contribute in the interest of job creation via sustainable projects are explored.
• Agriculture via maize production is currently re-introduced in the area.
• The district would take 100% upon themselves to cover input cost to initiate the project. The district municipality would work with the emerging farmers cover all inputs to initiate the farming project.
• O R Tambo has been identified as the first nodal area of development.
• O R Tambo District municipality will collaborate with other departments eg. Social Development Department in the area and local municipalities, which will also include other sector departments to avoid duplication.
• The level of collaboration is not well structured which poses problems.
• Regional, local municipalities and ward committees is party to the development however a serious problem resides with the ward committees.
• The maize crop for this year will be a good harvest although there are still maize left of last year which poses a storage problem.
• Cilo’s are in short supply and pose a challenge for further crop production.

• The Department of Environmental Affairs and Tourism has opened a tender to companies for development around the area.
• Other consultants prepared business plans.
• Ntinga got the tender from DET and is currently putting a program in place.
• At this O R Tambo Municipality has yet to engage the community at Coffee Bay, the level of interaction is still at the primary stage.
• It has been noted that all the DET projects has to become part of the IDP which will facilitate O R Tambo to further engage the process.
• The relation a between maize and cancer in the area has to be further investigated.

• The matter at Coffee bay is urgent and need serious attention.
• Opportunistic persons use the legislated policy of government to pounce upon the communities by making use of e.g. Grants earmarked for the poor people.
• An urgent meeting needs to be convened between the DBSA and other departmental stakeholders and the communities to deal with issues of structural arrangement, to clarify who will apply for funding, who the recipients will be and the implementers of the projects.
• There is currently no knowledge form the O R Tambo side of the situation at Coffee Bay.
• Councillors were not present at the meeting at Coffee Bay, hence Mr Basophu has pleaded with officials of O R Tambo to get together, including DBSA and to relieve the situation at Coffee Bay in the interest of development and the poverty stricken people in the area.
• This is the committee’s second visit and yet nothing constructive is happening, the committee would not want to come back for another visit and tell the community that development cannot take place just because the projects is not link to the government plans and IDP’s when development is sourly needed.
• Ntinga need to get their act together, they need to work closely with KSD Municipality to get the project at Coffee bay started, the committee monitor the progress very closely and call officials if none performance are at the order of the day.
• Five million rand was deposited in the account of Ntinga and hence they need to start working now. Officials of the Ntinga development agency have indicated that they are in the process of moving forward.
• The Ntinga officials will engage in discussions with the Department of Environmental Affairs and Tourism as well as Land Affairs and Economic affairs department, after this discussion the issues will be taken to the communities and further discussed.

• Integrated Sustainable rural Development Program – at the local level this program is not taken seriously, this poses a challenge.
• Unregulated structure – If programs are implemented the IDP of the municipality guides the relation (framework) hence this creates a protocol constraint.
• Some confusion exist between district and regional municipality and bring about some form of constraint an confusion.
• O R Tambo and KSD boundaries create a problem especially when it deals with roads construction, where construction would only continue as far as the boundary of a particular municipality. Hence the perception of the people that construction work on roads never concludes.
• Anchor projects is non-existent, most of the money spend in the Eastern Cape area does not benefit the local industry as most raw material are bought in the nabouring provinces eg. Kwazulu-Natal.
• A major challenge is that the province, eleven year later still does not have a correct asset register. Capital stock that could be used by the municipality go’s to waste and expensive rental agreements are entered into.
• Cilo’s in the area, which belongs to government, is also a constraining factor since it has been lease out for many years for small rates.
• The status as to how far the municipality is in terms of accreditation is another matter for concern.

• In view of poverty in the area the Eastern cape Development Committee has to be convened to bring all the issues on the table.
• District and Local municipalities need to come to the understanding of the issues facing them and to open the channel of communication.

The Bethelsdorp Development Trust (BDT) in its present form is a community driven entity, who’s agenda is to preserve the community heritage, tourism as well and to create employment through its creative industries cluster concept. The incubation of small micro industries is also high on the agenda as well as a core focus on the environment especially the fauna and flora as well as water preservation and utilization.

The visiting delegation was briefed by the founder members of the Bethelsdorp Trust at the heritage center, also said to be one of the first schools in the area.

Amongst the many tasks set before the Bethelsdorp Trust was a:

• Tourism site in the "Kloof" – to highlight the heritage of the community and to conserve the environment;
• To engage in activities that would ensure economic benefits to the community and to use eco-tourism e.g; the four biomes in one concerned area of which the Strelitzia Juncea plant flourishes around six locations in the Eastern Cape area.

• Taking school children into the Kloof area to get a feel and love for nature and to protect and preserve the heritage;
• The weaving factory- as part of art and culture and forming partnerships with the community;
• To restore the village setting and setup a museum with a research component and archive section to preserve the information that is still in existence;
• Impacting on school curricula –to advance nature conservation and heighten the understanding of development versus endangered species.

The delegation note with concern that a vast area of natural beauty was under the watchful eye of one conservation officer, which indicated a capacity constraint.

The involvement of the DBSA is not very clear in terms of the projects underway although a development total of R470 thousand was committed. The weaving factory which is envisaged to provide jobs for disabled persons, youth and women alike, has not yet being put to the test. The project was due to start in July 2004 but although the building is available the capital infrastructure is none existent hence putting strain on the idea of job creation in the area.

It should be noted that DBSA will provide money for capacity building and organizational development but a pro-active approach from the bank could go along way in assisting initiatives of this nature especially when there is no lack in genuine commitment from the side of the community.

The chairperson indicated that all partners and stockholders should play their part in order to make this project a success. It was further recommended that since most amounts of herbs are currently found in the "Kloof" area, education programs should take place in consultation with herbalist and traditional healers in the area to ensure that the scarce plant types/endangered species are not wiped out as a result of greed. Conservation must receive priority and that proper regulatory measures be taken to preserve the natural assets to the benefit of the youth and the community at large.

On arrival at Coega Mr Lionel Billings (Project Manager) briefed the visiting party on the detail of the project. It can in no way be underscored that this is clearly one of the biggest projects of its kind on the African continent. The involvement of the DBSA in this regard is clearly felt on three fronts:

• Loan funding of R20,7 million to co-fund the Coega Construction Village, with the National Housing Finance Corporation - R62 million and the Coega Development Community (CDC) R43,3 million;
• A letter of intent has been provided to the CDC by DBSA, offering an amount of R500 million towards infrastructure development for the Coega Aluminum Smelter as part of the incentive to secure ALCAN to develop the project at Coega;
• A memorandum of understanding has been signed between the DBSA and the CDC with regards to strategic support between the two organizations for infrastructure development within the Coega IDZ area as well as development and capacity support.

This nationally driven project, funded out of the national fiscus is currently experiencing constraints in certain areas of the project due to the belt tightening exercise which Eastern Cape Province.

With the main project objective to beneficiate raw materials for sustainable jobs and job creation, more then just partnerships is used, a need for following should be in place:

• Public sector commitment;
• National Ports Association participation;
• Clear planning of Integrated Development Zones (IDZ);
• Eskom power upgrade;
• Skills development and appropriate labor participation and
• National and international foreign direct investment and many other factors.

The approach of clustering industries and services seem to take acceptance on all fronts of engineering and economic development as it would facilitate co-dependence, product development and maintenance. This development does put pressure on eg: rail systems and other forms of transport hence Coega has consulted other stakeholders to allow exports via the Coega port. Further upward pressure is placed on water resources hence a desalination project is in the process of being completed in the near future not to allow for mistakes made by the Cape Town Metro which is currently experiencing sporadic water restrictions.

• Total People Employed – Construction phase since 99/2002 10961
• Total People Employed – Construction phase of project currently 3514
• Number of individuals registered on job seekers registration program 57361
• Total number trained under job seekers register program 2232
• Candidates in labor pool 2946
• Total Business Registered 4441
• Total Sub Contractors 411
• Total Number of SMME Development Contracts 43
• SMME’s enlisted on Mentorship Programme 68

The statistics speaks volumes in terms of the projects currently ongoing at Coega, however it would be even better still to see the surplus labor in the Job Seekers Database be absorb into the labor force. Trained in the appropriate industry skills be it services delivery or technical to be absorbed back into to the full sectoral cluster of activity when all industries at Coega are operational.

• Single site developers for investor already considering locating industries in the IDZ;
• Developers with an interest in secure light industrial park;
• Developers with experience in the logistic industry and distribution center;
• Office space developers.

The level of expectation is always raised above the ceiling of delivery and becomes a challenge in a balancing act of managing people’s expectation of job creation and poverty alleviation versus time. A project of this magnitude does create amongst others a fare amount of expectation not only in the Eastern Cape but also in the county, especially when unemployment is a common phenomenon. It does however raise the hope of government via the Coega Project making an effort to tackle the issue of poverty and unemployment.

• Embedded pessimism exist
• Funding Constraints
• Declining FDI to Africa
• Distortions of BEE
• Low Domestic Investment

• Upgrading of the Rail Line (Sishen to PE)
• Project Funding
• Alleged negative statement by Provincial MEC’s
• Advertising amongst associates
• Distribution of promotional literature
• Site visits eg: Parliamentarians to further gather understanding of projects
• Not talking positively about this national initiated project
• Ensure government continues to view the initiative as a National Priority
• Ensure success of the project

• Xhosa Cultural Village
• Nelson Mandela Peace Park
• Paving of and greening of Motherwell cemeteries
• Addoc Eco Tourism Project
• Work for the Coast
• Motherwell Fish Factory

The estimated value of all these projects amounts to R20,5 million and they are expected to be implemented under the guidelines of the Expanded Public Works Program. The approximated 365000 pupils in the area, only 30 schools exist for which only one library is currently in use, a situation, which is unattainable if a skilled labor force is to be created with a desire for life-long learning.

The Motherwell Presidential Police Station Project and Courts is a project that was earmarked for the Chief Tswete Village and initiated upon a presidential visit to the area. The area for this project has already being prepared and will follow the route of making use of local labor to begin to tackle the problem of unemployment.

The provision of water seem to be a persistent problem as a result of the flat gradient, hence the provision and the pumping of water becomes costly.

The main project within the programme is as follows:

• Motherwell Integrated Transportation Project
• NU 2 Sport Stadium
• Urban Agriculture / Plaughing fields
• Xhosa Cultural Village
• Social Development Project – Youth Capacity Building
• Small Business Incubator
• Employment Centre
• Stock Farming
• Water mete instillation in NU 10, 11 and 12
• Ikomvelihle Pedestrian Bridge

The DBSA has been supporting the infrastructure development in the Motherwell area for a number of years, by providing loan funds to the former Port Elizabeth Municipality and through the Nelson Mandela Metropolitan Municipality (NMMM). In terms of promoting the Municipal Urban Renewal Program (MURP) a loan offer of R500 million has also been made to the NMMM to co-fund social and economic infrastructure development in the greater municipal area.

Cacadu has an approximate population of 376 thousand. Challenges seemingly are around towns along Spoornet lines which are in economic collapse due to the closure of spoornet lines and rail stations. The revenue stream is reduced from R150million to R15 million, the rest of the money go to the metros.

Approximately 50% of the staff at the municipality is on a contract bases and has strong performance driven contracts. When asked if the municipality owe the auditor general any money the answer was a confident no. However the department of Health owe the Cacadu approximately 12 million rands. Department of Roads and Transport owe the municipality approximately 3 million rand.

Mayor Faku indicated in his speech that unemployment is a major problem, due to a lack of proper research in the municipality these poverty statistics cannot be properly quantified and hence the statistics is somewhat spurious.

The Acting-Vice Chancellor Prof D Swartz welcomed the visiting delegation and proceeded with a brief historical rendition of the institution, highlighting the caliber of leadership that were released from the institution. However enrolment numbers are dwindling hence the university has been given an urban base, linked to the Rhodes University (East London) – Forthare Rhodes University.

The DBSA interest is around agriculture capacity building. A memo of understanding has been drafted for the following:

• Upgrading of Residence / Development;
• To forge a strategic partnership between the two institutions;
• The partnership aims to address some o the challenges facing local government in the Eastern Cape;
• To align the Development strategy of the Eastern Cape Provincial Government.

To date the DBSA has funded initiatives to empower the UFH internally, such as the center for Local Government Development, the change and Cultural Diversity Management project, the translation of agriculture manuals into the local language, the re-introduction of Nguni Cattle, amongst others. Total expenditure to date in capacity building stands at R1,8 million.

The UFH partnered with the local community, as part of a strategy to fight poverty and improving the quality of life of which the Nguni cattle farming project is instrumental. The re-introduction of the Nguni cattle is through a concept of "passing on the gift", which implies that the communities are borrowed a bull and heifers for a period and once established, they pass them on to the next community. Studies at the UFH have indicated that the Nguni is an adaptable breed, capable of withstanding the most adverse circumstances. The concept is proving successful and it is excellent for the environmental management.

It is opening up local economic and skills development opportunities. The project is also unifying the communities to fight against destruction of fences and stock theft. The total funding of the project is R1,2 million with the DBSA contributing 80% (R960)k) of the cost.

• Approximately 90 families will benefit in skills development in production and maintenance of cattle;
• Mercedes Benz indicated their willingness to use the hides for the seat covers;
• Farm management skills will be enhanced as a precursor for future farming activities;
• The full exercise would serve as a knowledge base from which the University and community can draw from.

An investment of R800 thousand was pumped into this project. Transfer of agriculture / horticulture skills becomes vital in this regard. A demand for paprika seedling was identified, amounting to R1,6 million which would create opportunities to the communities and new possible job creation and further training.

The Khyskama Hoek area has an unemployment level of approximately 875 hence the need for the following projects which are currently in progress:

• Rabbit breeding project;
• Seed nursery and flower growth eg: Cauliflower plants;
• Peace garden concept gardening – Training/Development of skills
• Propagation of essential Oils (eg: Rose Giranium)
• Medicinal Herbs – to further make essential oils.

5. Partnerships are formed with:

• Department of Trade and Industry
• Department of Education and Training
• Department of Water Affairs and Forestry etc.

The project is aimed at promoting sound agricultural development, which will include cash crop production. It will thus involve a paradigm shift in the rural farmers towards high yield, high return products, and utilizing natural methods for the production of indigenous crops that are in demand. Women will attend training sessions prior to the start of the program with on site assistance during land preparation and planting.

The total commitment from DBSA to this project is R100000. The initiatives are in consultation with community leaders via constant interaction.

During intense interaction with members of the community, the physical size of the projects does not correlate with the amount of money that was pumped into the project. The total participation of women in these and related projects seem to suggest that no women empowerment is taking place as the presence of women was notably absent. Although some of the actual infrastructure was present, the value for money as committed by DBSA is not justified by the outputs that were identified as well as the outcomes.

A clear monitoring mechanism is absent, hence the absence of tangible women’s participation in a so-called women’s empowerment project which is non-existent.

Clear audit processes should be put in place so as to assess the profile of persons receiving funding and to ensure that the possibility of fronting does not occur hence robbing the poor of tangible opportunities to engage in meaningful poverty alleviation projects. Donor funding / funders eg: DBSA should further assess what multiple funders are financing the same projects. Funding seems to take place on a number of fronts with no tangible outcomes to the benefit of the community.

The project entails the provision of water and sanitation, electrical reticulation, road and storm water drainage to 260 erven at Madeira Park, and the remainder of extension 29 in Queenstown. The area covers 2505 hectares that are situated within the Queenstown municipal area. The project is aimed at providing affordable residential pliots, with emphasis on addressing the needs of first-time home buyers (middle income group), thereby improving the quality of life of the community. The total cost of the project is R4560 000.

The initial concept idea was to sell the newly build houses direct to the public, however some of the estate agent manage to acquire the right to sell houses to loan recipients thus charging commission. This further delayed to conclude payments of plots from 3 months to 6 month. Further development challenges is a lack /limited capacity by municipalities to take up DBSA loans, some are currently servicing existing DBSA /other institutional loans.

• In terms of housing projects, a default policy should be put in place to ensure that the sheriff’s office does not go at length to evict families.
• An integrated form of development should be taking place, to prevent that apartheid spatial patterns emerge within the new urban renewal strategic plans and exclusive communities emerge with pockets of opulence.

The project initiated by a group of youths gave the visiting delegation much hope as a result of the achievements that are visible. The projects include:

• Brick making – for which a tender was awarded
• Food Garden- of which a total of R16 000 was awarded by DBSA
• Renting out flats that were build – clients include a doctor, Spaza Shop, HIV / Aids Training Venue etc

This project is a shining example of what dedication and unselfish hard work can do, more especially if a common vision exists within a poor community that are committed to enforce change and strive to eradicate poverty. Currently a training center is operational which host a resemblance of a library. Although the resources are somewhat limited the idea does show to be a winning concept. Training that are given in the resource center is SETA recognized at a NQF – Level 4. HIV/Aids patience also receive training in food gardening to give them some means to grow the basic foods types that would also give some sense of self worth and inner value and to sustain their health.

The Amathola Municipality provided land at a reduced rate to encourage the cultivation of gardens by the youth group and community members. Good links has been forged with the municipality to engage in a clean-up project for which the youth center was requested to manage and monitor the full project in the area. The honorable Mr Nelson Raju promised to donate a hundred books in much needed reading materials to the library.

Application forms for further funding from the Health Department was promised to the Stutterheim Youth Project, up until the time of the visit these promises were not met with a good response.

The Umzovumbu Fund also declined the Stutterheim Youth Project after an application was logged for funding. The bulky application forms is a matter of concern when applying for funding, a hurdle that poses the first challenge to small organizations.

Although various ways were explored to identify why funding was disapproved, the return response were that certain criteria were not met. Follow-up to correct the errors was done, but no response was yet received. If institution that are setup for specific funding eg: youth entrepreneurs and other small business, does not address their mandate and the procedures becomes cumbersome it totally looses it core function in promoting growth and fighting unemployment.

The chairperson intervened and requested that all applications be send to his office in order to do some follow-up on this and related concerned matters.

A total of 60 contractors are involved in this project which comes add up to a value of R63 million rand. Approximately 6320 transformers were installed, whereby most of the overhead conductor was replaced. Ninety percent employment is people within the immediate area, whereby 100% is HDI’s in the community.

The contract is a five-year project, which is currently in its second.

An agreement was undertook to ensure that if members of the public fall into areas with electricity payments, they would then automatically be put on a prepaid system, which will allow them to buy electricity while at the same time pay off their areas. As a result of the prepaid initiative electricity is paid for before members of the public actually consume it, this enhanced the revenue collection and reduced the theft rate of electricity. Illegal connections can easily be spotted in the area. Out of 30000 households only 18000 had electricity in the area. This was due to low maintenance whereby the equipment had to be upgraded in its entirety, in line with health standards and current regulations.

Every year the municipality re-looks its indigent policy to ensure that the recipients are truly the needed for which the policy seeks to deliver the free basic services.

The project has a strong focus on internship training for technical and varsity students that are looking for further training and employment with a skills upgrade angle to their studies.

• When asked if the municipality owed the Auditor –General any audit fees the answer was an emphatic no.
• If the IDP were aligned and should be aligned with the Provincial Government Development Plan (PGDP)
• If budget and IDP are aligned – they are still working on these and related issues
• Powers and functions – some functions reside with provincial competencies, they were of the view that the municipal manager try to work closely so as to integrate proper services and functions
• Money owed to municipalities – by the department of public works but the status at this stage is not clear since they were an implementation agent.

• Buffalo City owe the Auditor General money;
• Public entity does owe the city money;
• Departments does owe the city money in terms of Corporate Governance the office of the mayor does not want to cut the electricity;
• The use of own revenue for the disaster fund was too small, damage was estimated at 90 million, funds received was 40% of what they had to pay;
• When the urban renewal – infrastructure had to been revamped and millions had to be spend;
• The mayor stressed the point that councilors should become more involved to deal with the indigent policy to make it truly work to the peoples benefit;
• Indigent – most people do not have any knowledge of the indigent policy.

The Hegebe Traditional Authority is situated in Mqanduli, a small service town, forming part of O R Tambo District Municipality and is, homogenously, a one-language geographic population area, with 60% unemployment. It is in the State Presidential Nodal Zone of the Integrated Sustainable Rural Development Plan (ISRDP), qualifying it as a priority on economic development.

Mqanduli climate is particularly well suited to growing maize. However, the crops currently produced are commercially insignificant even after several years of active crop promotion and training. In an effort to kick-start maize and vegetable farming, the soil has to be prepared with a grant to the Tribal Authority Fund. The project aims to help aspiring farmers develop business plans, apply for funding, and learn how to farm commercially, through practical commercial and technical training.

A grant amount of R500 000 has been offered to the Hegebe Traditional Authority by the DBSA to purchase plough equipment.

The chief at the Great Place, Mr Nkosi Phatekile Holimisa, indicated his appreciation with the R500 thousand that the DBSA gave to purchase two tractors, plaques and seed planters. However his concern was that the farmers need around six water pumps to pump water to the plowed land and to ensure sustainable water provision.

The need for DBSA to do a full assessment of the needs around this area is critical, projects should be funded in its totality so that the real benefits are as a result of a full quota of resources instead of partial funding that creates other needs that might serve as stumbling block to the successes of the projects in its entirety. Members were of pinion that more visits of this kind should be engaged so as to get the bigger picture of what the rural struggles of our rural farmers are and the needs in financial terms will be to address the challenges.

Closer corporation should exist between the bank and other government institutions eg; LandBank, to view their role in the bigger scheme of things. The function of the Landbank is not well understood in these areas and should become clearer to the rural people if the full potential of the rural poor is to be explored.

The Mr Nkosi Phatekile Holimisa indicated that they are not pushing for money although the money is needed but that agricultural equipment is provided; the two tractors are rented to farmers for R100p/d instead of the market price of R175 per hour. These hiring fees charged is then used to service the trackers.

The importance of the Agricultural Research Council also came under the spotlight, especially with the assistance of skills to ensure that the land is ploughed in the correct manner so as to minimize the effect of soil erosion. If poverty is to be tackled at its roots more resources should be pumped into the rural communities as agriculture is the main source of income and the sustainer of life.

The visiting delegation was made ware of other project that were set up for rural women to generate a source of income by producing good and services that could be sold to visitors/tourist in the area.

In the national budget allocation there should be a bias towards the rural poor in the equitable formula as prescribed by the FFC and set out in the Division of Revenue. This approach would go along way in addressing the backlogs that currently exist in the Eastern Cape area. As a result of high unemployment, and little or no economic base an intervention strategy should be devised.

The DBSA commitment in this regard is a infrastructure development of R7,5 million for upgrading of roads, electricity, water and sanitation and refuse removal.

Technical Assistance (advice) on: financial Management and Credit Control; Institutional Development and Leadership Support and Organizational Structure; Systems and Processes (customer service and management systems) and Information Technology.

She indicated that the King is extremely grateful for the contribution of DBSA in funding development in the area (Thembu Kingdom) and indicated that strong links can only forged at this point with the Bank. They view the gathering as a launch of greater things in the future especially when legislation like Black Economic Empowerment speaks directly to the Thembu people. With all the charters that are currently drafted and those already in operation, they are practical about the idea that things will take time but that this could be viewed as a starting point.

This is an area with immense beauty and potential yet plagued by unemployment and poverty in an abject form. The scenic beauty of the area provide little reward to the struggling poor but is an attractive magnate to those who clearly understand the value of mining and tourism with its economic multiplier effects.

Although much though has being given to developing the area, persistent obstacles eg. land tenure, bribery of chiefs for land to build lavish holiday home by rich, low development, no job creation efforts and many other factors still seem to put a damper on the huge potential of the area.

The area also lacks a common vision, no detailed strategic framework for development, no detailed local spatial planning framework, under-capacitated levels of municipalities etc. Other pressures include: poor management capacity to administer sustained resources used, unregulated vehicle access to the beaches, informal and unregulated sand mining and poor municipal service (e.g. waste management).

• Rural communities subsistence lifestyle and dependency on natural resources is problematic
• Benefit sharing is weak
• Weak capacity in local community to negotiate equitable partnership agreements
• Unsustainable development to address immediate needs to employment.

As a result of poverty people are bribed hence illegal building is taking place. This creates a problem where community persons are turned against government, especially when laws are enforced pertaining to property rights and land ownership.

Although an Eligible Cottage Task Team has been set up to counter the problem of people acquiring land by means of bribes, dockets has been opened, the problem now lies with the Department of Justice to speed up the prosecution procedures. Hence the need for government to fast track these and related issues.

The members of the community that met up with the visiting delegation was of high praise due to the parliamentarians visiting the area and indicated that this is a first and hopefully not the last visit. They further re-iterated the poverty and unemployment problem that is extremely close to their heart.

The committee noted that the sensitivity of the area cannot be underscored; if proper planning does not precede development the consequences could be devastating. Although the development nodal study does not give clear indication as to where development along this coastal stretch should take place, wrong choices in development could be detrimental to the scenic beauty of the area and could become a dead-weight loss to society.

The committee visited the Alfred Nzo Municipal building that is now in its second phase of development. The building will host a Bank with an ATM that are non-existent in the area, this will be a welcome relief to those pensioners that has to travel long distances for their pension payments. The building is also very user friendly especially taking due regard of disabled persons. The involvement of DBSA in this Integrated Sustainable Rural Development Project could be taken back as far as 2001. The need for these and related partnership is as a result of poverty, large unemployment, water and sanitation shortages and infrastructure backlogs as well as telecommunication and electrification capacity constraints.

The mayor indicated that they are currently developing plans around an agrarian economy to improve agriculture, these plans include:

• Cultural tourism – eco-tourism
• Partnership with DTI
• Umsumkhulu Gateway
• Business plans around the R56 road to encourage a hospitality program
• Malluti Hiking Trail
• Beef production and live stock
• Fishing cluster
• By 2009 all communities should be supplied with sanitation and SMME promotion

• The municipal manager indicated that no audit fees is outstanding to the Auditor General and that the departments does not owe the municipality any money, however businesses in the are do owe them money, the dilemma is that many of these businesses has left long time ago.
• DBSA has provided valuable information to the municipality and officials and this has capacitated them in a big way.
• A current study underway in consultation with DBSA to look at better ways of water provision and retaining water during rainfall periods.
• One library was just completed in the Usumklhulu area which would go a long way to be used as information center and multipurpose center

• Many of the Municipalities visited has huge backlogs that need attention not only physically but in capacity,
• Bucket system in municipalities persist and are a matter of concern,
• Inefficiencies in rails system posses problems to export especially with big projects like Coega,
• Outstanding Fees to the Auditor General and SARS,
• Physical monitoring of projects are notably absent eg: Khyskamahoek Women’s Empowerment Project,
• Fronting in some instances regarding empowerment project,
• Proper audits should be in place so as to monitor who are the actual beneficiaries,
• Funding stream, as many projects receive multiple funding stream with only one recipient organization,
• Recreation facilities should be considered when planning and developing area where there is high density of people,
• Good projects should be encourage and assisted to proceed further eg; Stutterheim Youth Project,
• Indigent policies should be more visible to those households that needs it most, people should be educated around making use of the indigent policy,
• Councilors should become more active when it comes to this indigent policy,
• It is questionable if the IDP’s are aligned to the Provincial Government Development Plans (PGDP), and if the one was drafted after the other or vise versa,
• Departments owing municipalities are a notable concern,
• The very nature of a project is a full process, a missing link could stifle the outputs and outcomes, hence the need for more comprehensive funding by DBSA,
• Functions of other Government institutions e.g. Land Bank, HSRC, Agriculture Research Council and others should be explored to assist rural farmers,
• Dealing with the Division of Revenue, a rural bias should be present in the policy document and this should be further discussed with Treasury and Finance and Fiscal Commission,
• Unresolved Land Tenure issues posses serious problems to rural communities,
• Bribery to gain access to valuable land along the Wild Coast is a matter of grave concern,
• Department of justice should be brought into the scheme of things when dealing with these and related issue, especially when cases are pending and dockets are opened in this regard,
• Development and the environment is constantly at odds when it comes to creating a viable industry e.g. Wild Coast area,
• A lack of a common vision in the Wild Costa area is a course for concern,
• Partnership with traditional leaders in the area is crucial, they should in no way be undermined,
• Proper environmental impact studies should be undertaken when embarking on further development especially when DBSA funds the projects,
• Pension payments in municipal areas especially when no facilities are provide e.g. toilets, shaded areas, water provision is an urgent matter for municipalities,
• Closer links with Department of Home Affairs to assist pensioners with Identity documents is another issue of concern,
• Procurement should be bias towards women, DBSA should make it a point to ensure that this practice is encouraged when funding projects,
• The take-over of fixed assets e.g. water purification plant by municipalities from provincial authorities should be transferred with a maintenance budget so as to prevent strain on municipal budgets,

The hospitality and warmth with which the members were received at their various destinations underlined the fact that the tourism potential of this nation is yet to be discovered. A special word of thanks to the Development Bank of South Africa officials for their contribution in making this oversight visit the success it rightfully deserved not for the luxury of viewing the province but to tap into the potential for capacity building and partnerships to be forged in the interest of our great nation. We thank you.