Small Harbours Maintenance, Leasing, Job Creation: Public Works briefing

Meeting report

Development of small harbours

Mr Dhaya Govender, Deputy Director General (DDG): Department of Public Works (DPW), addressed the Committee on the current work of the small harbours and state coastal property development unit (SH&SCPDU), and the progress made in respect of the maintenance programme to the proclaimed fishing harbours, the stimulation of economic development and job creation, and the leasing of state properties for revenue.

He also discussed the establishment of the Integrated Small Harbour Management Authority (ISHMA) and the progress it had made since its establishment in 2005. The Directors General of the Department of Agriculture, Forestry and Fisheries (DAFF) and the DPW had met to reaffirm the decision to establish a management authority and a task team. It had also been stressed that security measures should be implemented at fishing harbours. In the interim, since 2012 in the Western Cape, a Harbour Steering Committee had been created, made up of representatives from the DPW, the DAFF, the Western Cape’s provincial government and the City of Cape Town’s management.

Some issues had been prevalent. The DAFF currently receives revenue for the use of harbour facilities and the DPW did not receive any funds from the DAFF, yet the DPW was responsible for maintaining the facilities at these harbours. It had been proposed that the revenue received from the DAFF in its Marine Living Resources Fund (MLRF), and the revenue received from the DPW’s State Coastal Property Let Out, be combined into a separate joint account for the management and development of proclaimed fishing harbours, and for the establishment of a management authority with the required resources to manage all operational requirements and additional projects effectively.

The mandate and functions of the development unit within the DPW were to let out of state property for economic development, the management of state coastal properties, the maintenance of small harbours and coastal properties and special intervention programmes, and the repair and maintenance of 12 proclaimed fishing harbours in the Western Cape. The special functions of the unit were to convene the small harbours and State Coastal Property Development delivery laboratory under the Oceans Economy of Operation Phakisa and the national priority project (Phase One), to develop three new small harbours in the Northern Cape (Port Nolloth), Eastern Cape (Port St Johns) and KwaZulu-Natal (Port Edward).

Mr Fred Johnson, Western Cape Regional Manager: DPW described the work that had been done by the Special Intervention Project. The maintenance and repair requirements at the proclaimed fishing harbours in the Western Cape had prompted the steering committee in 2012 to establish the Spatial and Economic Development Frameworks (SEDFs) for 12 proclaimed fishing harbours, and the report was finalised in 2014. The aim of the committee had been to direct development and the modernisation of the harbours in order to stimulate the local economies and also to create work opportunities. Prior to the budget cuts, the SEDFs had identified critical capital and maintenance projects costing up to R400m.

The scope of work included the removal of sunken vessels, dredging, repairs to slipways, jetties, quays and breakwaters, shore crane maintenance, infrastructure maintenance and security operations. All of these elements were critical to the effectiveness of these harbours. He indicated the areas in which these projects were being initiated, and summarised the progress on the maintenance programme’s high-level roll-out plan from September 2016 to the estimated date of completion in March 2019.

A bathymetric survey of the underwater depth had been conducted at Gordon’s Bay, and most of the graph was in the red zone, which meant the sand level was high and dredging was necessary. For all the harbours, bathymetric surveys had been conducted to establish how much work needed to be done at them.

A condition assessment had also been carried out at all the harbours which identified dredging areas, areas with sunken vessels, possible dredge disposal areas and repairs required for the quays. These assessments had assisted in identifying the projects necessary in the different harbours.

The scope of works was currently in the design and development stage (Stage Three). The removal of sunken vessels and dredging had been prioritised, and the actual removal of the sunken vessels would be executed in June/July 2017. The award of the contract would be taking place over the next three weeks, and approval of the environmental plan was also awaited.

Mr Johnson gave an example of the SEDF’s precinct development and projected job creation. The whole development of the SEDFs was done in consultation with local authorities. Precinct 1 referred to small scale fishing and tourism, Precinct 2 was the multi-purpose area which could be a hotel, Precinct 3 would be a commercial fishing and fish processing area, Precinct 4 could be the intensive fish processing and general activities area, and Precinct 5 could be the area set aside for community interface activities. Area 2 was the area set aside for small scale fishing, while Area 3 had been set aside for the different entry points into the harbours.

The projected jobs created up until 2030 with the complete roll out of the SEDFs was between 4 233 and 5 753, and the projected contribution to gross domestic product (GDP) growth would be between R1.881 billion and R2.078 billion. The initial budget requested for the complete roll out of the programme had been R400million, and it had been cut to R300million.

Mr Govender continued with the presentation, and said there were significant issues regarding the lack of management and maintenance of the coastal properties. Therefore part of the mandate of the Committee had been to manage and maintain all coastal properties under the custodianship of the Department within the borders of South Africa, including all occupied and vacant admiralty reserves, land parcels, buildings, estuaries and unproclaimed harbours. If the work of the Committee focused only on the proclaimed areas, it would be missing out on a significant part of the responsibility of the Department.

The work and progress of the Department would be fast tracked by the fact the committee for managing small harbours was a joint venture with the DPW and other entities. This was important, because the Northern Cape’s offices were in Kimberly, for example, but their property was on the Atlantic seaboard, and managing that from Kimberly did not make sense. Therefore, the solution was to partner with the local municipality.

It was also important to also look at how to work collectively with the local municipalities in regard to letting out property. In this respect, currently only 333 state coastal properties had been let out -- 16 in the Northern Cape, 269 in the Western Cape, none in the Eastern Cape, and 48 in Kwazulu-Natal. This showed an underutilisation of the state coastal properties. In 2017, there was a total of 86 expired letting agreements and the DPW had extended 68 of these leases. There were 18 leases awaiting the signature of the lessee.

In the Western Cape, in addition to the 269 properties let out, 22 properties were also let out to organs of the state at nominal rates. These were the City of Cape Town (11), Cape Agulhas Local Municipality (1), Cederberg Local Municipality (1), Overstrand Local Municipality (2), Saldanha Bay Local Municipality (3), Swartland Local Municipality (2) and SANPARKS/ Cape Nature (2). In Kwazulu-Natal there was an estimated number of 40 properties let out to the following municipalities at a nominal rate: Kwa-Dukuza, eThekwini Metro, Ray Nkoyeni Municipality and uMdoni municipality. A survey had been conducted to determine the total number of people currently employed at companies occupying DPW property, and the number was approximately 5 594.

Small harbours had been determined as a key focus area in 2015 that should be dealt with separately from small maritime bodies.

Ms Kele Sethibelo, Chief Director, DPW, said the engagement at the local level had started in 2015 when the national projects were identified. There were three national projects – one each in Kwazulu-Natal, the Eastern Cape and the Northern Cape. The DPW, as the leading department, had been mandated to convene a small harbours and state coastal property development laboratory under Operation Phakisa. There were also municipal and provincial briefings which had been completed in March 2017. Public participation sessions had been launched in December 2016, while focused discussions have been held in the areas of education/ training/ skills development and legal matters, harbour and coastline security and employment, and economic and infrastructure development and its alignment of proposed projects with Spatial Development Frameworks (SDFs) and Integrated Development Plans (IDPs).

The pre-laboratory consultations with all the coastal municipalities had allowed the DPW to obtain a preliminary list of priority projects for each province heading into the investor conference in August 2017, and the national laboratory scheduled to begin in October 2017. The main purpose of the engagement with coastal municipalities was to ensure that the proposed projects were endorsed by municipalities and were included in municipal infrastructure development plans, and to ensure that municipalities committed to expediting the approval of zoning and other municipal approvals in relation to the projects proposed.

In the Northern Cape, municipalities that had been consulted to date included the Richtersveld Municipality, Nama Khoi Municipality and Kamiesber Municipality. Between 20 January and 24 March, some work had been done in the Northern Cape with the office of the premier, the Namakwa District municipality and its local coastal municipalities, and the province would consolidate all projects in preparation for the national laboratory.

In the Western Cape work had been done in four district municipalities -- the West Coast District Municipality, Overberg District Municipality, Eden District Municipality and City of Cape Town Metropolitan Municipality. The West Coast District had held an engagement on 15-16 February, and detailed presentations had been given by the different municipalities. There had been a working session to consolidate all properties and to brief the provincial government. The Eden/ Overberg Districts had held their planning session on 20-21 February, and detailed presentations were given by each municipality. The City of Cape Town had held its session on 23 February. There were detailed presentations from Hout Bay, Kalk Bay and Gordon’s Bay. All district projects were rated according to the EzyED project prioritisation tool.

In the Eastern Cape there had been engagement with the following district municipalities: Alfred Nzo, OR Tambo, Amatole, Sarah Baartman, Buffalo City Metropolitan and Nelson Mandela Metropolitan. The first municipal briefing for the Eastern Cape had been hosted on 20 December 2016 and the Eastern Cape Provincial government, all coastal district municipalities and all coastal local municipalities had been invited. The following municipalities had attended: Port St Johns, King Sabata Dalindyebo (KSD), Ndlambe, Great Kei, Sarah Baartman and Ingquza Hill. The meeting had been led by the DPW’s DG, and the municipalities had been briefed on Operation Phakisa, the convening of the laboratory, and the work of the small harbour coastal development unit (SHCDU) within the DPW.

On 30 January, a political briefing had been hosted with the attendance of the Office of the Premier, the MEC for Economic Development, all coastal district and local municipal mayors and municipal managers (MMs). The DG had used this meeting to discuss strategic priorities of the province.

Another meeting had been held from 31 January to 1 February, this time also incorporating traditional leaders and other government departments and entities. The municipalities had presented identified priority project areas, the parties had engaged on proposed projects, and the municipalities were required to fine tune their proposed priority areas in preparation for provincial consolidation.

A provincial pre-lab engagement had been hosted on 16-17 February, where district and local municipalities met to finalise and fine tune priority project areas. Following this, an investors’ conference had been hosted on 6 March and in addition to municipal officers and the MEC for Economic Development, identified local businesses, development agencies and funding agencies had been invited. At this meeting, municipal priority projects had been presented and discussed. On the same day, a meeting had been held with the DDG and the office of the premier. Following these meetings, on 8, 14 and 16 March, there had been a provincial priority finalisation meeting in preparation for the pre-laboratory consolidation (national).

In Kwazulu-Natal, work had been done in the following district municipalities; uMkhanyakude, uThungulu, iLembe, Ugu and eThekwini. On 20 December 2016, the first municipal briefing was hosted and the KZN provincial DPW, all coastal district municipalities and all coastal local municipalities were invited. The meeting was attended by the municipalities from Umlalazi, Ugu, Umndoni, Mandeni, Kwadukuza and Ray Nkonyeni. They were briefed on Operation Phakisa, the convening of the laboratory and the work of the SHCDU within DPW. A task team had been established, with members from each local and disctirct municipality to manage the province’s engagements going forward.

The second municipal briefing was hosted on 10 February, and had been attended by the KZN MEC for Public Works and the Acting Head of Department, district and local coastal municipalities, and municipal development agencies. A working session on the identification of municipal priorities was held on the 16h of February. A working session for municipal priorities had been hosted on 27 February in order to finalise the municipal stakeholder lists and the priority projects with EzyED.

On 9 March, a briefing with the MEC and Head of the Department of Economic Development, Tourism and Environmental Affairs had been held to brief the MEC and team of the Operation Phakisa, Oceans Economy, Small Harbours and Coastal Property Development on the provincial engagements, progress to date and to discuss the way forward. The consolidation session was held on 23 March.

The following areas had been identified as potential investment areas for local and economic development:

• Education and training (maritime and aquaculture training centres),
• Renewable energy (wind farm, solar farm, turbine),
• Farming (aquaculture on land, mariculture off land and salt production)
• Fish processing and packaging, food and beverage (restaurants, breweries and distillery)
• Government services (DAFF, Department of Environmental Affairs, SA Social Security Agency, SA Police Service)
• Hospitality industry (hotels, holiday resorts, caravan parks, restaurants),
• Infrastructure development (harbours, mooring facilities, jetties, slipways, special economic zones, waterfront, office parks, retail parks, industrial park),
• Logistics (fuel storage, warehousing),
• Maintenance and repair of harbours and infrastructure (vessel maintenance and repair, yacht mole facilities, harbour infrastructure, spares and supplies),
• Manufacturing and engineering services (small ship boat building, alluvial mining),
• Pipelines and pump houses, rescue safety and security (NSRI, life-saving, safety and security),
• Sport and recreation (yacht clubs, fishing clubs, water theme parks, speciality events- sports, food, cultural etc),
• Tourism (museum, tourism office),
• Transport, commercial and leisure (water taxis and ferries, helicopter pads)
• Water and waste management ( ice making and supplies, desalination and waste management processing).

Mr Govender said that the list of potential economic activities came from businesses currently operating in small harbours, and business proposals that the Department had received. The goal to transform harbours to economic zones could work for the benefit of locals in the area. The Department had shown the different economic activities that could take place at these properties besides building a waterfront. There was a need to redefine economic zones sustainably.

Mr Govender said the provincial priority project lists have been assisted by the EzyED tool, which helped to assess and prioritise proposed projects. The provincial municipality lists had not been finalised yet.

On 29 March, the municipal and provincial consultations with the national pre-laboratory consolidation meeting of the Oceans Economy-Small Harbours and State Coastal Properties Developments had been concluded. The engagement had four sessions in total -- exhibitions (session 1), provincial statements (session 2), provincial development agencies’ panel discussions (session 3), and the ministerial address (session 4).

The keynote address had highlighted that there was an aim to attract investment of over R12 billion by 2019m and possibly over R20 billion by 2020. This should assist in the creation of over 1 000 stable jobs directly linked to identified projects. As a result of implementing these projects, it was hoped to influence the creation of over 2 000 further work opportunities through secondary activities that stemmed from identified projects.

With regard to fishing-related business investments and projects, pro-rata shares had to be given to local fishermen based on their total value of fishing rights per annum. Furthermore, all business proposals must ensure utilisation of local suppliers and local labour, and also indicate skills development initiatives.

Regarding the way forward, there was a proposal for the DPW to host provincial investor conferences in each of the four coastal provinces. The intention was to pair investment proposals with municipal/ provincial priority projects. The proposed time for the conference was August 2017. The DPW would also host the national laboratory for one week in all four coastal provinces and all the projects would be tabled at the laboratory for final decision-making.

Some factors had hindered progress on these projects. The DPW was supposed to have convened the small harbours laboratory in 2016, but the work was never completed. Since the handover of the small harbour unit to Mr Govender in July 2016, the unit had done extensive work nationally to prepare for this mandatory national laboratory. The funding, however, had not been made available. Furthermore, the outstanding issues of the baseline research, as well as the facilitator, had since resulted from the lack of funding. The proposed solution was for the delivery laboratory budget be set at R45 million.

In the first phase of the national priority projects, the DPW intended building three new small harbours in Port Nolloth, Port St Johns and Port Edward. Phase 2 would include the development of the following additional areas: Kleinzee and Hondeklip Bay in the Northern Cape, Port Alfred and Gonubie in the Eastern Cape, and Port Shepstone, Hibberdene and Shelley Beach in KwaZulu-Natal.

Mr Govender provided a brief background on the different national priority projects. In Port Edward, the Department had begun engagements with the municipality in October 2014, with the focus on properties along the Admiralty Reserve within the municipality’s management boundaries. During these discussions, the municipality had proposed the development of a small harbour within its management boundaries. After various discussions between the Department and the municipality, Hibberdene had been identified as a priority area to develop a small harbour. The proposed location was later changed and communicated to all parties as Port Edward.

In the Port St Johns local municipality, the DPW had been invited in June 2015 to discuss possible areas of infrastructure development in line with the municipality’s Infrastructure Development Plan. As part of the discussions, the municipality proposed the development of a small harbour in Port St John’s.

The Department had held various engagements with local municipalities and province to identify a possible area for the development of a new small harbour in the Northern Cape. The initial area proposed for development was Boegoebaai. Upon interaction with the National Department of Transport and the office of the Premier in the Northern Cape, the proposed area for development was amended to Port Nolloth.

During a visit to China in October 2016, the DPW had presented three priority areas for the development of new harbours for inclusion in the Forum on China-Africa Cooperation (FOCAC) agreement between SA and China. As a result of the proposal, a delegation of officials and technical staff from the Chinese First Harbour Consulting company had visited South Africa to conduct site visits on proposed areas for development. Based on the technical visits to the proposed development areas, a revised list of areas for development was proposed, specifying Port Edward, Port St Johns and Port Nolloth. The revised list was communicated to the Chinese Ministry of Commerce and First Harbour Consultants (FHC) through the Department of International Relations and Cooperation (DIRCO) in December 2016.

With the support of the DEA and DIRCO, the Department began the process of formalising the agreement between the DPW and FHC to develop the three new harbours, and to pursue grant funding from the Chinese Ministry of Commerce to the tune of US$4 million. A draft memorandum of understanding (MoU) between the Accounting Officer of the DPW and the CEO of First Harbour Consultants had been drafted and received approval from the office of the Chief State Law Advisor. The draft MoU between the Minister of DPW and the Minister of the Chinese Ministry of Commerce to secure the US$4 million for phase one of the new harbour development programme needed to be routed through the internal DPW legal processes. Once this process was finalised, the MoU would be routed to DIRCO for final approval. A draft contract would be discussed by all parties once the MoUs had been signed off.

Both parties had agreed on the phased implementation of the development projects. Stage 1 would include the pre-feasibility study, feasibility study and high level harbour design, and stage 2 would include the penultimate design, model testing, final design and building of the harbour (structure). Phase 1 would utilise the US$4 million grant funding.

It was important to work hard to make sure the properties were better used. The Department of Public Works would be collaborating to have a new management model with help from the Department of Agriculture, Forestry and Fisheries. The properties of the Department had been in the media for the wrong reasons, so changing this situation was imperative for the DPW as a whole.

Members’ questions

Dr C Madlopha (ANC) said there had been some concerns over the failures of the Department with the establishment of ISHMA. The report showed that the project had started in the third administration, a report had been approved in 2005 by the Cabinet, a revised decision had come in 2009 and obtained Cabinet approval, but still there had not been a result. In 2016 they had met again to review the situation, and since then there had been no implementation. In 2017, the DGs had met to reaffirm decisions already taken. They were now indicating there was an urgent need for engagement between the DPW and the DAFF to agree on implementation. Why had there been no concrete progress since 2009?

Mr M Filtane (UDM) asked why the land had not been appropriately. What was the solution for this? What was the risk analysis profile? Why was there no maintenance programme in all the proposed plans? Why was this Department not including maintenance programmes? Furthermore, the presentation spoke about creating jobs up to 2030, and it had been mentioned that based on potential investment, R12 million was needed to create one stable job. Was this a sustainable plan for South Africa, given the current economic conditions? How much would people be making from these opportunities? The Committee needed more information on where the new jobs would be created.

Mr M Figg (DA) asked if there were the necessary skills to implement the plans proposed in the presentation. It was concerning that it took two years to finalise a report. Also, there was no detail on the allocation of the R400 million. Could there be more information on the exact amount that the Department received? More information was necessary regarding who was leasing the coastal properties.

Ms E Masehela (ANC) referred to the letting of properties, and asked why it was that after so many years the Western Cape was the only province performing well.

Ms D Mathebe (ANC) raised a concern about fishing licences, and the fact that not everyone was able to afford them. There had been talk about skills and training for a long time, but nothing had been done about it so far, how would the department improve on this? With regard to the Department being a custodian, a more detailed plan was needed, providing more specific information.

Department’s response

Mr Govender said he could not account for much of the previous work that the Department had initiated and why there had not been any concrete outcomes, because it had been before his administration. He had been told the reason why plans took two years to be finalised was because the Department had collaborated with municipalities, which had also gone out to get information from the locals in the areas of interest. However, when he had followed up on this, many people had informed him that they had never been included in the work that their municipalities and the DPW was doing on small harbours.

The custodianship of all coastal properties lay with the DPW, but it was willing to work in collaboration with the different municipalities on the economic development projects. The Department was open to sharing the responsibilities of managing coastal properties and collaborating with stakeholders to ensure the concerns that arose from managing these properties were addressed.

Mr Filtane said the Department should cease to view black South Africans only as sources of labour, as there had been constant reference to the creation of employment opportunities. The projects should work in such a way that in future, locals were empowered to manage their own economic activities at the harbours, as opposed to only providing labour.

Mr Govender concluded by saying that a more detailed presentation which addressed all the concerns raised by the Committee would be presented at the next meeting.

The Chairperson reminded the Committee that another meeting would be scheduled in order to give Mr Govender sufficient time to address the questions raised. The office of the Chairperson would communicate accordingly in respect to the scheduling of this meeting.

The meeting was adjourned.