PROJECT CHARTER



BUSINESS PLAN for Mpofana Irrigation Projectcenter0AGRICULTURAL TRANSFORMATION THROUGH INFRASTRUCTURE AND EDUCATION00AGRICULTURAL TRANSFORMATION THROUGH INFRASTRUCTURE AND EDUCATIONDecember 2012MIP under the auspices of The Mooi River Irrigation Board (converting to the Mpofana Water Users Association)And the Mooi River Farmers AssociationPO Box 134Mooi River3000Contents TOC \o "1-3" \h \z \u HYPERLINK \l "_Toc345945388" PROJECT CHARTER PAGEREF _Toc345945388 \h 41.EXECUTIVE SUMMARY PAGEREF _Toc345945389 \h 82.PROJECT SUMMARY & DEVELOPMENTAL SCORECARD PAGEREF _Toc345945390 \h 93.BACKGROUND PAGEREF _Toc345945391 \h 104.CONCEPT PAGEREF _Toc345945392 \h 115.VISION PAGEREF _Toc345945393 \h 116.MISSION PAGEREF _Toc345945394 \h 117.OBJECTIVES PAGEREF _Toc345945395 \h 128.LOCATION AND SITUATIONAL ANALYSIS PAGEREF _Toc345945396 \h 129.PROJECT INTEGRITY and PROGRESS PAGEREF _Toc345945397 \h 149.1.Mpofana Water Users Association & Catchment Management Strategy PAGEREF _Toc345945398 \h 149.2.Technical Hydrological Studies PAGEREF _Toc345945399 \h 149.3.Web based Project Management Tool PAGEREF _Toc345945400 \h 159.4.Socio Economic Impact Assessment PAGEREF _Toc345945401 \h 1510.DEVELOPMENTAL INITIATIVES PAGEREF _Toc345945402 \h 1610.1.Methodology PAGEREF _Toc345945403 \h 1610.2.Dairy PAGEREF _Toc345945404 \h 1710.3.Beef livestock PAGEREF _Toc345945405 \h 1810.4.Vegetables PAGEREF _Toc345945406 \h 2010.5.Goat PAGEREF _Toc345945407 \h 2210.6.Equestrian PAGEREF _Toc345945408 \h 2310.7.Traditional Medicines PAGEREF _Toc345945409 \h 2411.Education Platform PAGEREF _Toc345945410 \h 2611.1.ABET PAGEREF _Toc345945411 \h 2911.2.PRE-PRIMARY PAGEREF _Toc345945412 \h 2911.3.OUTREACH TO PRIMARY SCHOOLS PAGEREF _Toc345945413 \h 3011.4.WESTON AGRICULTURAL COLLEGE PAGEREF _Toc345945414 \h 3011.5.CEDARA and UKZN PAGEREF _Toc345945415 \h 3011.6.SHORT COURSES PAGEREF _Toc345945416 \h 3111.7.SCHOOL OF EXCELLENCE PAGEREF _Toc345945417 \h 3111.8.FUTURE FARMERS PAGEREF _Toc345945418 \h 3211.9.SUMMARY PAGEREF _Toc345945419 \h 3312.IRRIGATION IMPERATIVES PAGEREF _Toc345945420 \h 3312.1.Process of identifying additional storage opportunities PAGEREF _Toc345945421 \h 3412.2.Potential storage identified PAGEREF _Toc345945422 \h 3412.3.Irrigation opportunities around this additional storage PAGEREF _Toc345945423 \h 3512.4.Issues needing to be resolved Prior to Submitting the LICENCE PAGEREF _Toc345945424 \h 37Completion of the Hydrological Modelling PAGEREF _Toc345945425 \h 37Geotechnical Investigations PAGEREF _Toc345945426 \h 38Environmental Impact Assessments PAGEREF _Toc345945427 \h 38Preliminary Design PAGEREF _Toc345945428 \h 3812.5.Programme to completion PAGEREF _Toc345945429 \h 3813.FINANCIAL SUMMARY PAGEREF _Toc345945430 \h 3913.1.Summary of project costs PAGEREF _Toc345945431 \h 3913.2.Financial Considerations PAGEREF _Toc345945432 \h 4013.3.Economic Implications PAGEREF _Toc345945433 \h 41Giants Castle at the West end of the ProjectPROJECT CHARTERProject NameMpofana Irrigation ProjectProject ControllerMpofana Water Users Association (formally Mooi River Irrigation Board)Project ManagerGraham ArmstrongSupporting DepartmentsDept. of Water AffairsMidlands Economic Development Agency Dept. of Agriculture, Environmental Affairs and Rural DevelopmentDept. of Rural Development and Land ReformDept. of Economic Development and Tourism Dept. of Cooperative Governance and Traditional Affairs Mpofana MunicipalityMngungundlovu District Municipality Office of the PremierBeneficiariesAll emerging farmers included in the Midlands Outgrowers and Processing Plant projectEmerging Livestock farmersEmerging Dairy farmersGoat farmers within communities of the Catchment area Emerging farmers in the Tendele Community of the Kamberg ValleyMalulekosi Herbs herb and traditional medicine productionYouth and aspirant black farmers through the Midlands Education platform Farm workers through increased commercial farming productionPossible investorsCommercial FarmersDWADRDLRDAEADA acting as an agent to Government organisationsMpofana MunicipalityIthala Development Finance Corporation Total BudgetConstruction of dams and directly related costs = approximately R130,000,000Projected infrastructure costs by commercial farmers and developing farmer projects = > R500,000,000Project Outcome/Final ProductThe construction of two dams on the Little Mooi (8 mil m3) and Hlatikhulu (17 Mil m3) Rivers to irrigate an additional 3000 ha of land and improve water security to the agricultural sector of the Region.This will : Provide the platform for increased economic activity within the catchment in excess of R 120 m per annum Provide structured sectoral BBEE agricultural initiatives within the Dairy, Beef, Goat and Vegetable areas, with special focus on Land Reform Beneficiary farms Increase employment opportunities by + 2 300 jobs (30% increase)Allow for 15 on-farm dams off-stream of the rivers (total capacity of +/- 5mil m?) to be constructed and funded by individual farmersProvide the foundation for the Midlands Education Platform targeting youth and adult farm dwellers Anticipated outcome of 3000 ha of extra irrigation and the sustainability of present irrigationApproximately 1?100 ha of new irrigation for emerging farmer projects and sustaining present operations1 900 ha of new irrigation for commercial farmers enhancing and promoting labour employment Production from 1 850 ha of irrigation for dairy = +/- R 66 000/ha = R 122,000,000p/aProduction from 1 050 ha for crops = R 60,000,000 p/a400 ABET students, 400 pre-school children, 25 Agricultural high school bursaries, 100 short course learners, 16 undergrad and 8 executive leadership graduates annually Key Projects within the Mpofana Irrigation Project Sengani Midlands Dairy Initiative - a dairy farm with emerging farmer participation, 350 Ha new irrigation for BEE farmers, producing 7,200,000 liters milk p/a = turnover of +/- R31 mil p/aMidlands Outgrower and Processing Plant Project, with 650 Ha new vegetable irrigation for BEE farmers Middlerus Beef Project, approximately 8?000 Ha of ranching, encompassing approximately 30 traditional beef farmers in centralised commercial enterprise Equestrian BBEE Equity Ownership Programme, with 80 Ha of new irrigation for BEE participants Mpofana Industrial Park, housing the Agriprocessing Hub in BruntvilleHillendale Goat Initiative, providing centralised goat supply and management to emerging farmers Midlands Education Platform – holistic programme aimed at farm dwellers and employeesTraditional Medicinal Plant – the establishment of 3 commercial enterprises cultivating at least 5 Ha of high demand traditional plants each Project brief/Scope of workIdentify, package and support transformation opportunities in the Mpofana area and adjoining areas by ensuring sustainable resource management i.e irrigation water.To reinforce the active BBEE participation (ownership and management) in the sectors of Dairy, Beef, Goat, Equestrian Fruit and Vegetable and Agriprocessing Initiate and support the establishment of co-ops and joint venture projects that will assist with marketing of products, i.e powder milk processing plant, vegetable packing, and marketing and support Establishment of the Midlands Education Platform - Promote training and educational centres in the area through collaborations with Midlands Education Centre, School of Excellence at Summerhill, Weston College of Agriculture, UKZN, Cedara, AGRISETA and Primary and Secondary schools.Promote the establishment of infrastructural requirements for emerging and participating farmers. Facilitate the process of obtaining government grants and other financing to meet these requirements.Mentorship and commercial partnerships to assist land reform participants and socio economic plans to provide development needs in local communities.Continue to utilise the expertise and experience in agriculture of the MIP organisation to support emerging farmers with all aspects of agricultural production and marketing.EXECUTIVE SUMMARY The Mpofana Irrigation Project (MIP), which commenced with a few committed farmers in 2009 as an idea for driving economic stimulation and transformation, has become one of the most significant projects to be undertaken in KZN within the Agricultural arena. It is a model, politically aligned to Government’s developmental objectives and Public Private collaborations, through the leveraging of funding to create a multiplier effect on investment. The MIP is now managed by a dedicated team of stakeholders, who answer to a steering committee represented by senior delegates from the Department of Water Affairs, Department of Agriculture and the Environment, Department of Rural Development and Land Reform, COGTA, Department of Economic Development and Tourism, Agribusiness Development Agency, uMgungundlovu District Municipality, Midlands Economic Development Agency and the Mpofana Local Municipality, all of whom share the single objective of equitably increasing sustainable economic activity within the project area.Extending from the community of Tendele in the West all the way through the fertile Kamberg Valley and down to Muden in the East, the Project spans 11 agricultural sectors (beef, vegetable, goat, dairy, forestry, sugar, crops, pork, nuts, traditional plant medicines and equestrian) and given its central location to the Province, is conveniently placed to feed into to the growing N3 Corridor. Through disciplined resource management and the construction of two large dams in the catchment area of the Hlatikulu (17 mill m3) and Mooi (8 mill m3) Rivers, will free up an additional 3?000 Ha of irrigation, of which 1?155 Ha will be utilised directly by black farmers, in business models that align them to markets and in strategic partnerships with commercial farmers. Underpinning the MIP is an Education Platform that will train 400 adults a year in ABET, 400 pre-primary learners on farms, 25 high school graduates, 8 tertiary students, 100 short course recipients and 12 farm managers. Again this will see to collaboration between Government institutions (AGRISETA, Cedara, UKZN, Weston Agricultural College) and civil society Non-profit–organisations (Midlands Community College, Al-Maktoum School of Management Excellence and Future Farmers). The impact of MIP can be measured by the 2 300 jobs it will create over the next five years, the increase in economic activity by R 124 m, and importantly the transferral of farm ownership and management to black farmers on an annual basis. PROJECT SUMMARY & DEVELOPMENTAL SCORECARD The Mpofana Irrigation Project, established in 2009 to drive transformation within the Mpofana catchment, spanning from the Drakensberg in the West to Keates Drift in the East, will on behalf of;Emerging farmers – Existing and New Commercial farmers; Oversee the application, funding and approval from DWA to build the listed dams below, which will through their benefits, unlock the developmental opportunities identified in this document :8 million m? dam on the Little Mooi River17 million m? dam on the Hlatikulu River (a tributary of the Little Mooi River)Approximately 30 off-stream dams on farms still requiring the results of a detailed hydrology study that is complete Through a consultative, multi-sectoral process the project drivers have identified growth opportunities within the Dairy, Beef, Vegetable, Goat, Equestrian and Agri-processing arenas, all of which have powerful transformation objectives and all of which are linked to the availability of irrigation.While the initial transformation projects have been identified and their locations defined, the broader objective of education and skills improvement among the farm dwellers is a major thrust of this initiative. The project believes that creating more employment and opening opportunities for individual growth are fruitless if the requisite skills are not in place to fill and capitalise on those positions. It is therefore realistic that the area anticipates a gradual overall rise in production and processes for black farm dwellers to rise through the system and ultimately become farm owners. The project has also positioned itself as a renewable energy showcase, meaning that through the proposed expansions, sustainable agriculture will be practiced and wherever possible, renewable resources used. The Drakensberg viewed from the Hlatikulu RoadIn terms of transformation the following deliverables have been set by the project ImpactScaleJobs retained 6 000Direct new jobs created2 300Indirect new jobs created 50Temporary new jobs created (dam building)300Seasonal new jobs created200People annually supported in education platform 951SMME’s supported 50Time frame for implementation5 yearsTotal Cost R 160 m It is planned that the dam building applications will be submitted to DWA in January 2013 and the project should be completed by 2015.BACKGROUND When the proposal for the construction of the Spring Grove Dam (SGD) was presented by the Department of Water Affairs to the agricultural community of the Mpofana Catchment area, in 2004, it was initially envisaged that the irrigators in the Catchment would be able to benefit from the SGD storage facility.Once it was understood that this was not the case and that the SGD would extract 60 million m3 of water from the Mpofana Catchment into the Umngeni Catchment for use in the greater Ethekwini area, concerns were raised regarding the affect this would have on the Mpofana Catchment Area. With the proposed SGD construction, DWA hydrological studies showed that the Mooi River Irrigation Board may be required to reduce irrigation in some areas, not only would this negatively impact on farming operations, but would hinder any transformation initiatives that may have been possible. It was these concerns that drove the farming community to come together and launch the Mpofana Irrigation Project (MIP), whose intention it was, was to increase water storage infrastructure and so prevent any decline in the agricultural production of the area and impede transformation among farm dwellers.Hence the founding of the MIP, with a mandate of enhancing and promoting the expansion of emerging and commercial farmer activities in the Mpofana catchment areas. It is critical therefore that this project be implemented as soon as possible to avoid the imminent negative impacts of the water extraction to be made by SGD. While the farming community have come together and raised money for the project so far at risk, they are willing to contribute significantly towards its implementation with the knowledge that together with State funding, it can become a reality. CONCEPT It is planned that institutionally, all beneficiaries, spanning all the agricultural sectors, within the project area, will become members of the Mpofana Water Users Association and will be required to contribute to its funding. Being such a big project, this will be done through a combination of commercial loans, own-capital funding and Government support. The project itself will be managed by the MIP, with the Mpofana Water Users Association playing the role of custodian. VISION Through Public - Private collaboration, become a Provincial flagship project that maximises sustainable transformation and education opportunities within the Agricultural sector. MISSION To unlock a significant transformation projects in each of the sectors of dairy, beef, vegetable, equestrian and goat farmingTo support numerous agricultural BBEE initiatives throughout the catchment area in a manner that maximises job creation opportunities To establish at least one agriprocessing facility To create an education platform that holistically provides appropriate education opportunities to farm dwellers within the areaTo be a driver of Public – Private relations To be the regional driver of renewable energy practices among farmers within the catchment areaTo construct two large and approximately 30 small dams and so unlock the irrigation potential of a further 3?000 Ha, of which 1?000 Ha will be utilised by transformation enterprises OBJECTIVESCreation of 2 300 jobs Increased economic activity by an estimated R 120 m per annum Annual Education opportunities for farm dwellers as follows : ABET 400Pre-school children 400High School Bursaries 25 Short Courses 100 Tertiary Bursaries 16 School of Excellence Bursaries 12Positioning of 2 new black farm owners per annum LOCATION AND SITUATIONAL ANALYSISThe project spans from the Tendele community in the West along the Hlatikulu and Mooi River catchments all the way to Keates Drift in the East. It embraces 220?000 Ha, and has 220 commercial farms, incorporating dairy, beef, pork, poultry, equestrian, medicinal plants, goat, fruit and vegetables. The map below provides a clear picture of the location of the project within the Provincial context.Map 1. Mpofana Project Location GARYThe map below indicates the river courses, main transport arteries high density community nodes and towns within the Project area. Map 2. Mpofana Rivers, Key Transport Arteries and Towns GARY Extract from the Executive Summary : Mpofana IDP Review 2009 / 2010 “The Mpofana Municipality covers an area of approximate 181 000 hectares and is divided into four wards. The Mpofana Municipality is centered on the town of Mooi River which is its Central Business District and falls within the uMgungundlovu District Municipality. Mooi River takes its name from the Afrikaans. The early settlers were so impressed by the natural beauty of the river that they called it ‘mooi’ (pretty). In Zulu however, the river is Mpofana which means a Place of Eland. During the Second Boer War, the town was the scene of minor engagements and a 1500 bed military hospital was established. The centre of the municipality (Mooi River) has over the years seen a decline in economic growth which was largely based on the clothing and textile industry. This growth has been hindered by an increase in the South African economy by China’s investment in the clothing and textile industry and the town has been no exception. With the close of most clothing and textile industries, saw an increase in the unemployment ratio, lack of investment and increased poverty levels. Some other challenges faced by the municipality are unsustainable human settlement, ineffective human capital due to low levels of literacy and lack of skills development, high prevalence of HIV/AIDS, access to basic services in some areas of the municipality etc. The municipality has seen a significant decline in population figures comparing the 2001 Census and the recently conducted 2007 Community Survey. This can be attributed to a number of factors ranging from an increase in the HIV/AIDS death related diseases, high mortality rate, migration amongst other issues. The Town of Mooi River is strategically located along the national route N3 and is approximately 70km from Pietermaritzburg which is the capital of the KwaZulu Natal Province. The predominant occupation in the area is dairying and stock farming. The Mpofana Municipality is home to some of South Africa’s finest stud farms of which several offer tours to visitors.As per the Mpofana LED Strategic Plan prepared by uMgundlovu District Municipality, in order to increase economic growth, the Mpofana Municipality must seize the opportunities in the agriculture and agro process sector and nature based tourism, with major training and retraining and mentoring opportunities in certain sectors. Special manufacturing and services opportunities, where advantage can be easily built was identified as one of the key areas.”Below is a summary of the commercial agricultural activities taking place within the catchment area, presenting an overview of the dimensions and magnitude of this brad basket of the Province. GARY – COULD WE INSERT A TABLE SUMMARISING ALL THE SECTORS AS PER YOUR QUESTIONNAIRE, as per email of 10th October, WITH NO. FARMS, JOBS, LITRES ETC OR ARE WE STILL A WAY OFF? PROJECT INTEGRITY and PROGRESS Mpofana Water Users Association & Catchment Management Strategy The Mooi River Farmers Association dates back more than 100 years, it has a long history of strong leadership and cohesive, disciplined membership. As a spinoff of the farmers Association, the Irrigation Board and subsequent to that, the transformation into a Water Users Association, the organisation has always been forward thinking and progressive in its approach to water usage. More recently, the members of the Irrigation Board, in recognising the implications of the building of the Spring Grove dam, decided to strengthen their position and have thus far contributed in excess of R 2m, towards the MIP. This contribution demonstrates the discipline and commitment of the members, which is further evidenced by the manner in which water usage is controlled in the catchment through the administration and enforcement of the Water Management Strategy. The web-based management tool detailed hereunder is a critical component of the enforcement and administration of the Strategy. Technical Hydrological StudiesMBB Services International is an established company of consulting engineers and environmental management professionals. It has served the rural and agricultural community and related sectors in Southern Africa since its inception in 1973. The company offers consulting services in the fields of civil, agricultural (including infrastructure, production, irrigation and management), structural, mechanical, industrial and environmental engineering, and integrated environmental management.The Pietermaritzburg office of MBB was established in Pietermaritzburg in 1985, specifically to serve the agricultural sector and became involved in this development project in 2004. At that stage the project was, and currently still is, being run by the Mooi River Irrigation Board. The application to change to a Water User Association was submitted some time back and it is understood that the final steps by Government to establish this are imminent.MBB was initially approached to investigate the water resources situation and to identify potential dam sites. Following the announcement concerning the Spring Grove Dam (SGD), the Mooi River farmers needed to establish whether or not there remained potential for them to increase their irrigation areas by constructing dams to provide adequate storage for this irrigation. It was shown that such potential does exist and the project has developed along these lines.MBB’s continued involvement has included assessing the various dam sites, assisting with the improvement in the existing dams and irrigation data collation and recording, improving the water resources analyses for various scenarios, communication with various authorities, adjudicating between adjacent farmers concerning water rights and distribution and generally managing the technical aspects of the development.The technical aspects of the project are at an advanced stage. With the exception of the Craigieburn Catchment all water resources model parameters including irrigated areas and private dams are ready for the final model runs. The two selected big dam sites have been surveyed and the geological aspects visually inspected. The next step is to carryout detailed geotechnical investigations so that preliminary designs can be carried out. These will provide the necessary details and costings for the sites so that other processes can continue with confidence.Web based Project Management Tool An important aspect of a project of this magnitude is the manner in which information is collated and utilised, and given the vast quantities of information so far held by the Water Users Association, this aspect of project management has been prioritised. A dedicated IT consultant, Mr. Gary Mortimer was contracted by the project manager early in 2012 to create a GIS, web-based management tool. This facility has been created and now details every farm, its cadastral and ownership details, its water rights status and farming sector. Over and above that a questionnaire was distributed in November 2012 to all farmers within the project area, containing more details regarding herd sizes, cropping practices and labour force statistics. All this information will be captured in the web based platform and used not only by the Water Users Association, but may be shared as a planning tool for future developments and strategic projects. Socio Economic Impact Assessment ForeShore Support, Reg. 2006/076495/23, was contracted by the MIP in September 2012 for a three month period to assist with : the identification and packaging of transformational opportunities, an implementation plan for the education of farm dwellers and;the drafting of the business plan for submission to the Department of Water Affairs for approval.The appointment of ForeShore made by the MIP steering committee was based on the experience of the team, who has over the years, developed Local Economic Development Strategies across South Africa (under contract to Municipalities, USAID and the Gauteng Economic Development Agency), assisted land reform communities in lands rights issues, drafted business plans for large agricultural out grower projects (vegetables and biofuels) and run National training programmes for municipalities and community structures.Through a series of desk-top reviews of existing literature, interviews with farm dwellers, tribal leaders, ward councillors, commercial farmers, sector experts, sectoral consultations, site visits and steering committee meetings this report has been drafted and embodies the transformational opportunities that exist through the proposed construction of the dams. DEVELOPMENTAL INITIATIVESIT MUST BE NOTED THAT THE PROJECTS IDENTIFIED BELOW REFLECT ONLY THE BEE OPPORTUNITIES, THEY DO NOT INCLUDE THE INCREASES IN AGRICULTURAL ACTIVITIES BY EXISTING COMMERCIAL FARMERS. THE TOTALS HOWEVER ARE CAPTURED IN THE TABLE OF CHAPTER 12 : ECONOMIC IMPLICATIONS Methodology In understanding the commercial and transformational opportunities presented by the MIP, it was critical to engage with those directly involved in the various sectors and critically, those who understood and believed in the need for transformation. To this end and to supplement the literature, the political imperatives and municipal planning requirements, a number of open sessions were held with stakeholders on the following dates in 2012: All sectors 14 August Councillors 16 August, 3 October Viniculture 17 August Pork 22 August Poultry 23 August Livestock 23 August, 5 October Dairy 14 September Education 17 October Meeting outcomes for all of the above were capture and circulated to stakeholders. Two core groups emerged from these processes, these were the: Project Steering Committee, Inaugural meeting 28 August Representatives from the following : DEDT, COGTA, DAE, MIP, Ithala Development Finance Corporation, Mpofana Municipality and DWA Education Forum Inaugural meeting 17 October Representatives from the following :CEDARA, Midlands Community College, UKZN, Western Agricultural College, AGRISETA, Summerhill School of Excellence and Future Farmers The outcomes and opportunities of each of the sectors is articulated hereunder. Dairy COMPONENTNAME / VALUEPROJECTS SENGANI New Irrigated Hectares 350New permanent Jobs30The dairy sector is of critical importance to the economic activity of the area. With the climate, soils, topography, availability of water and access to major transport routes, the delivered cost of milk is cheaper than most areas of the Province, giving farmers a competitive advantage and allowing for the sustaining of large and strong operations.Fortuitously a KZN Midlands initiative called “SENGANI – Sustainable Dairy Transformation”, in which farmers from within the MIP are members, commenced during the term of the drafting of this business plan. SENGANI, being comprised of 25 commercial dairy farmers from the KZN Midlands has been established by farmers recognising the need to support transformation. The model is based on a Sharemilking arrangement, whereby the farmers have grouped together to form a support mechanism for black ownership of dairy farms as well as a Developmental Trust. SENGANI farmers, will in January 2013, establish the Leadership Development Trust as well as a black owned non-profit company. These two entities will form the platform from which farm workers and black dairy farmers will enter the business and reap the benefits from the dairy enterprises, beyond farm labourer status. In the first quarter of 2013, SENGANI will engage DRDLR with the intention of becoming a strategic partner to the Department. The model, although somewhat modified, has been successfully operated in the Eastern Cape and is an ideal means of engaging with individual farms and tailor-making the most appropriate transformational structure with a case–by-case approach. As a launch project, SENGANI has identified a few farming operations within the MIP area. Discussions and field trips have been undertaken with Government officials, and with DRDLR having undertaken to conduct a valuation of the farms in January / February 2013, making the project a distinct reality. The Sharemilking model is summarised briefly as : Government acquires land and leases to black owned non-profit company (NPC)SENGANI, provides the operating equipment and livestock Jointly, SENGANI and NPC farm the dairy – sharing the profits NPC dividends are then used to support the leadership development trust Another model under consideration by DRDLR is one of acquiring a maize farm, whereby : DRDLR will acquire the farmFarm workers Trust will lease farm and with support from the commercial dairy partner, plant maize The Trust will sign an off take agreement with the commercial dairy partner (white maize) and South African Breweries (yellow maize)This will allow the commercial dairy partner to expand his existing dairy by planting pastures where he is currently planting maizeThe Trust will then generate revenue from maize sales as well as from a share in the profits of the increased dairy farming operationBeef livestock COMPONENTNAME / VALUEPROJECTSUDINEKLAVERVLEIZULU FALLSELANDS FONTEINNew Irrigated Hectares 50 New permanent Jobs15Livestock farming is a practice deeply embedded in Zulu culture, with cattle being considered as a measure of wealth and central to ceremonial practices. In many grassland areas however, the farming of cattle is taking place in less than optimal circumstances and lands which are ideally suited to cattle ranching are either underutilised or heavily overstocked. Further to that, on lands which are communally owned, the situation often unfolds whereby a few individuals dominate the grazing lands with their herds and the poorer families derive no benefit from the grazing resource. In recognising this and with the knowledge that certain areas provide prime grazing, MIP have earmarked a significant livestock project. At the heart of the project is Mr. John Du Preez, a very successful and respected “cattle man”. His farm is 5?800 Ha in extent is surrounded by the land reform farms of Klavervlei, Udine, Zulu Falls and Elands Fontein, providing 3 000 Ha of additional and underutilised grazing. Due to the strong relationships he has forged with his community neighbours, he has been successfully renting grazing from them and offering their members employment. In the first half of 2013, Mr. Du Preez will rent grazing from the existing and newly identified partner farms, while the institutional arrangements of these communities are established into trading entities and the infrastructure improved and upgraded where necessary. Once this has been achieved, Mr. Du Preez will sheep-lease 100 cows to each farm, and allow that community to “farm” those cattle, under his guidance and support. Through this means and with the economies of scale, all input costs for the collective farms will be reduced and centrally coordinated. Once the 100 cows are being successfully farmed, those numbers will increase to 200 cattle under sheep lease and from there the herd sizes will expand.Domestic cattle will continue to be farmed in selected camps, separate from the commercial herds. Note on Sheep lease : A sponsor contributes say 100 cattle and leases them for a defined period. At the end of that period, an equal number of animals at similar value will be returned to him, allowing the lessee to benefit from the growth and produce of the herd without having to buy them. A secondary consideration is that Mr. Du Preez’s farm has been valued by DRDLR (November 2012) and may, during 2013 be acquired by the State. In this instance, a secondary structure comprising the trading entities from his neighbouring farms will lease the main farm and continue to farm it under Mr. Du Preez guidance. GARY map 5 – John Du Preez will send his farm details through so I will need an area map grouping following names in middlerus / Craigie Burn areas : Elandsfontein, Udine, Klavervlei, Zulu Falls as well as Johns farm – what I want to do here is show how we have selected a certain area for livestock, comprising x number of farms – so not too much farm detail, more regional VegetablesCOMPONENTNAME / VALUEPROJECTSMiddlerusMission – MudenMooi Draai – Muden Craigie Burn New Irrigated Hectares 650New Permanent Jobs1100Extensive progress has been made through the Midlands Outgrower and Agri Hub Scheme. Thus far a total of 2 100 Ha have been identified, of which 1?200 Ha falls within the MIP, as high potential, black-owned, irrigable lands. The scheme commenced in 2005 in the Middlerus Valley, 20 kilometres North East of Mooi River in the KwaZulu Natal Midlands, when Mr. Cliff Egberink sold his fruit and vegetable farms through the Government’s Land Reform program to the communities residing on those farms, and commercially aligned them to the farms already purchased by National Government to form a larger collective enterprise. The intention was that the farms would continue producing to their full potential and that through structured partnerships with Mr. Egberink, the benefits of the farming operation would be shared equitably by the shareholders. To date a total of 10 farms in the Middlerus Valley, including and around Mr. Egberink’s farms, have been acquired and the farming operation (called “Siyathuthuka”) is aiming, in the partnership model (called “KwaGesibuso”), at a total of 200 Ha of fruit and 300 Ha of vegetable production. Based on the success of the model in Middlerus, the Agribusiness Development Agency (ADA) in 2011, with COGTA funding, embarked upon a feasibility study to ascertain the viability of replicating the model to surrounding areas. Thus far an additional four nodal areas have been identified with the potential of cultivating a total in excess of 1?500 Ha on high potential lands which are mostly fallow. Mr Egberink registered Agrivest in 2008, as a vehicle through which market demands would be consolidated and which would establish a processing facility. Agrivest was also created as a means for all community outgrowers to participate as equity partners in the benefits of the value adding, processing plant. The overall concept is to establish, support and grow emerging and smalls scale black farmers (primarily land reform beneficiaries in the Midlands area) as commercially viable vegetable and fruit outgrowers linked to a marketing and agri-processing plant in Mooi River.To meet the following objectives:Encourage and support interested farmers with access to lands to maximize the potential of those lands and so establish sustainable and solid operations. Maximize sustainable job creation opportunities and improve livelihoods. Provide sufficient support for rural communities to attain skills, through succession planning and dedicated training programmes. Provide a platform for these outgrower entities to participate as shareholders in the central marketing / processing hub.To strengthen Intergovernmental Relations (IGR) through the alignment of the project to Governmental policies and the bringing together of resources and support from the various Provincial Departments and municipalities. Create transparent and efficient mechanisms for social support to these communities (training centres, clinics and infrastructure), beyond that which the State may be able to do.Create a strong and lasting brand name Achievements to Date As a cursory view of the project component falling within the MIP, is presented hereunder : More than 35 groups have been identified with access to lands that are irrigated or have irrigation potential, totalling in excess of 1?500 Ha Three of these are primary cooperatives, already constituted and who are currently registering a secondary cooperative Massmart are secure as off take partners to the Agri-hub, through Agrivest Massmart have also committed as funders of the Non Profit Company called : Ikhaba Lethu, with an initial commitment of R 10 m towards social and technical support through Ikhaba LethuDavid McLean (chairperson of the KZN Growth Fund) and Massmart sit on the board of Ikhaba Lethu The secondary coop is about to acquire 40% shares in Agrivest Patrick Maduna of Muden and Russell Mhlangu of Weenen, are primary cooperative members who are board members of Agrivest This season, Agrivest will sell 360 Ha of vegetable and 80 Ha of fruit produce, from Middlerus, Weenen and Tugela nodal areas The feasibility study for the establishment of an industrial park in Mpofana has been completed the cornerstone of which is the Agri processing hub, this will be built in 2013 with COGTA and DEDT funding GARY Map 6 – here we’ll need the Middlerus farms, Mission farm in Muden, Mooi Draai Farm in Muden and Keates Drift / Muden tribal lands (Andrew that’s where we went last week ) GoatCOMPONENTNAME / VALUEPROJECTSHillendale New Irrigated Hectares0New Permanent Jobs9The KZN Goat industry is similar to the traditional medicinal plants industry, in that it is viewed as a marginal sector with unclear demands. Having said that, it is startling to understand that the Province imports thousands of goats annually. Numerous attempts have been made by the various Provincial Departments to establish viable goat farms, but in most cases these have not succeeded. The MIP is proposing a unique model whereby the existing farm, owned by Mr. Roy Caldecot, becomes the centralised breeding facility of a cross between the indigenous goat with a Saanen goat. Saanens are originally from Switzerland and produce large volumes of high quality milk and produce a good quality mix if paired with indigenous goats.The model is as follows : Phase 1 Identify 3 coops with access to land, within a 50km radius of the farmProvide these coops with young males as a 6 month training periodOnce the males are reared, provide each coop with 20 ewes Through structured support, these small herds will grow to as large as 300 Phase 2 Once these numbers increase to this size a small milk parlour will be established at each cooperative, that with 300 ewes can milk 1000 litres per day @ R 6.50 per litre = R 180?000 per month The milk will be centrally procured The demand for goats milk is incredibly high, given that it does not carry the same allergic triggers as cows milk. In February 2013 the MIP will, in collaboration with Mr. Caldecot, identify the three cooperatives and with funding from SEDA, develop the business plans for these. GARY – map 7 - the farm belonging to Roy Caldecot, Hillendale Equestrian COMPONENTNAME / VALUEPROJECTSSummerhill Stud New Irrigated Hectares 80New Permanent Jobs5Summerhill Stud, a world class thoroughbred breeding and training facility in the heart of the MIP has identified innovative transformation opportunities within the equestrian arena. Management of the Stud, have identified that staff could themselves become involved in the growth of the operation through participation in the ownership of thoroughbreds. The ownership of these valuable animals has commonly been held in syndicates, with investors sharing the risks and rewards of the industry. During 2013 the staff will form cooperatives and in March 2013, they will, with funding from Ithala Finance Corporation Limited, purchase a share in a stallion from Europe. This will cost in the region of R 5 m and it is planned that they will acquire a 50% stake. In the medium term, and once the stallion is working, they will begin acquisitions in groups of breeding mares. Within the South African horseracing landscape, a place exists for an exceptional stallion, one that can capture the publics’ eye and become as symbol of the industry, even more so if it were owned by the people who look after it in a manner that previously, they would not have been able to. Summerhill is willing to stand by the acquisition and partner with the staff in sharing the risks and benefits of owning a stallion of this calibre. It will showcase to the industry, the ease and possibilities of shifting the way in which people can access wealth and growth through the creative structuring of acquisitions and business opportunities. Gary – map 8 - Summerhill Stud Traditional Medicines COMPONENTNAME / VALUEPROJECTSRoslyn New Irrigated Hectares 25New Permanent Jobs30For more than a decade, conservationists, traditional healers and farmers (subsistence and commercial) have tried to meet the demand for traditional medicinal plants through cultivation. Currently however, the raw materials are becoming more and more scarce and lands are being denuded further and further from the major centres. Numerous studies have been conducted regarding the demand and the properties of these medicinal plants, and it is clear that the demand is not diminishing. This is further evidenced by the growing use of a combination of medicines (Western & traditional) by those afflicted with HIV/AIDS. Three main reasons exist as to why the growing of these plants has not materialised these being; Slow growing Source of Parent materials Viewed as a “community” and not commercial commodityIn recognising these, the MIP believe that the platform they are providing could unlock the obstacles and begin something significant in this field.Nine years ago Ms Robyn McKenzie, took over an established a nursery of traditional plants, from her mother, Ms Gaye Simmons, on the farm ROSLYN, 9 km from Mooi River. She has a wide range of traditional medicinal plants and products under the name “Nurseriwilde” and has as broad client base and profitable business. The valuation of this farm by DRDLR will be complete by December 2012. The basis for DRDLR’s interest is the request made by traditional doctor Elliot Ndlovu, who resides in Tendele, but who, in partnership with Fordoun Health Spa in Nottingham Road, has launched and is selling throughout SA, the NDLOVU Range of natural creams. He has made a concerted effort for the past three years to acquire the farm from Ms. McKenzie who is wishing to relocate her operation to the Cape over the next few years, once she has seen the successful handover to Mr Ndlovu. 3827780-676275Mr Ndlovu00Mr Ndlovu The MIP, believe that the acquisition of this farm, that employs 5 people, within the context of a proper commercial model will form the supply hub for two other farms in the area. During January 2013, two commercial (community) outgrowers will be identified, one in Middlerus/Craigie Burn and one in the Hlatikulu area. The business plan for these will be drafted and funding sought for these farms to provide at least 10 hectares of dryland cropping each, 30 new employment opportunities as well as full training and support from Mr. Ndlovu and Ms McKenzie. From that base, further commercial farmers will be identified in other regions of the Province for their inclusion into the outgrower scheme. GARY & TONY – map 9 - the farm belonging to robyn that we want to look at medicinal plants on and the Sangoma, Ndlovu from Fordoun Education Platform When considering transformation in any sector, the aspect of the education of those involved is critical. With the anticipated 1?000 Ha of newly irrigated lands to be farmed by BEE farmers as well providing a platform for management and ownership in the dairy, beef, equestrian, herbal and processing sectors, the MIP took a strategic decision in its founding mandate, to drive education programmes as a priority focus area. Through the consultation process with UKZN, Cedara, Midlands Community College, AGRISETA, KZN Poultry Institute, Weston Agricultural College, Future Farmers and the Al-Maktoum School of Management Excellence, an Education Forum was established and has now developed an Education Platform within the MIP.The MIP, Education Forum, recognises a few key considerations regarding education in this environment, and has based the roll-out of the programme on the following: Education requires a long term approach Farming today is so highly specialised that farm management and ownership is a specialisation Education has real costs It must be merit driven and targeted to individuals with aptitude who seek it It must align to Government’s programmes and frameworksIt is multi-layered and should target youth as well as adults The stakeholders who form the Education Forum are detailed as follows : AGRISETA – The Sectoral Education and Training Authority responsible for skills development within the Agricultural sector Weston Agricultural College - A secondary Government school, just outside Mooi River, with a long history of producing young farmers, also accredited to provide short courses CEDARA College of Agriculture – Established in 1905 and has been providing undergraduate training in all facets of agriculture. Certificate and short courses provided as well as open days and field excursions for farm workers UKZN College of Agriculture, Engineering & Science – Well respected Agricultural UniversityMidlands Community College – Situated in Nottingham Road, founded in 1980 as a Non-Profit Organisation, providing on-site short courses, mostly of a technical nature Future Farmers – a Non-Profit Organisation that offers aspiring young farmers opportunities for work experience in SA and abroad. Has been identifying and supporting young blacks through education and workplace opportunitiesAl-Maktoun School of Management Excellence – Aimed at management level within the equestrian sector, offering one year “MBA” , applying for SETA accreditation Based on these, the MIP have developed a platform which is best presented graphically and expanded upon below : 4156075-22225MIP EDUCATION TRUST 00MIP EDUCATION TRUST 493395090805004505325273049Future Farmers00Future Farmers590550273050School of Management Excellence 00School of Management Excellence 2665731179069Short Courses 00Short Courses 4145915666750061912593345UKZN00UKZN1209674112394CEDARA00CEDARA4157345187960002551430130810MCC 00MCC 3138805154305CEDARA00CEDARA195008596520Weston00Weston532765301943Weston Agricultural College00Weston Agricultural College41452802286000533400292735PRE-PRIMARY – Commercial Farmers & Wives 00PRE-PRIMARY – Commercial Farmers & Wives 4145280768350053340028575ABET – Existing Schools 00ABET – Existing Schools 414528011620500The components of the Education Platform are expanded upon as follows: ABET While this is already taking place within the area on an isolated project-by-project basis, the Education Forum believe that through the existing school structures and staff on farms, that a concerted effort could be made to increase basic education levels of farm dwellers. For this to happen, the MIP will engage with the Department of Education and confirm the principle of the MIP Education Trust contributing financially to school teachers salaries, for them to train adults in the afternoons, evenings and on weekends. KEY DELIVERABLESQuantityNo farms Targeted 20 No Adults Trained per annum 400 Additional stipend contribution to teacher per annum R 6 000Total cost to MIP Education Trust R 120 000 PRE-PRIMARY The preparation and grounding for formal education of children is a critical component of their development and with many parents working on farms, young children are left in the care of their grandparents or in the greater homesteads with no access to the basics skills development that children in urban areas are able to enjoy. For this reason the MIP Education Forum, consider it important that resources are allocated towards this somewhat neglected component if the education spectrum. To drive this, the Forum will engage the services and support of commercial farmers and their wives, with the view to establishing (or supporting) crèches on most farms within the MIP area. A survey of communities requiring the most assistance will be conducted as will the call for wiling farmers and their wives. Resources in the form of education materials and stationary will be acquired from the Department of Education. KEY DELIVERABLESQuantityNo farms Targeted 20 No Children Attending Preschools 400 Stipend contribution to teacher / farmers per annum R 6 000Total cost to MIP Education Trust R 120 000OUTREACH TO PRIMARY SCHOOLS Given that the majority of farm workers within the catchment area reside off the farms on which they work, a concerted effort will be made by the MIP to visit primary schools within the area to try and stimulate an interest in agriculture. Every year the MIP will visit the major primary schools and in collaboration with their education partners (Weston, Cedara etc.) will have demonstrations and bursary application processes for the youth at those schools. WESTON AGRICULTURAL COLLEGE Many youth living on farms exhibit an aptitude for farming but through the education system are not given the opportunity to explore the possibilities or gain the knowledge required to make it a career. Further to that, good farmers are often people who have been exposed to agriculture for many years and from an early age. A case study exists whereby a sugar cane farmer in KZN has created a bursary fund for the youth on his farm and through this he places selected youth at Weston and from there he supports them to farm management level. This long term view of education is critical in the Agricultural sector and is strongly supported by the MIP Education Forum. KEY DELIVERABLESQuantityNo Children per annum 5 No children in total (grades 7-12) 25 Cost per child per annum R 60 000Total annual cost to MIP Education Trust R 1.5m CEDARA and UKZN Those school leavers or farm workers (ideally having studied at Weston) wishing to gain a tertiary qualification will be afforded the opportunity of full time study at either of the two colleges, provided their studies are agricultural. This will begin to prime those wishing to become managers or farm owners. KEY DELIVERABLESQuantityNo Students per annum 4 3 No students in total (4 years) 16 Total cost per student per annum R 50 000Total annual cost to MIP Education Trust R 800 000 SHORT COURSESThese will be offered annually to selected groups from various farms and sectors. CEDARA, Weston and the Midlands Community College all offer short courses and it will be for the MIP Education Forum to plan the years short courses. KEY DELIVERABLESQuantityNo farm workers trained per annum 100 Average cost per short Course 2 000Total annual cost to MIP Education Trust R 200 000 SCHOOL OF EXCELLENCE For all of the scholars above, a ceiling still remains in terms of their ability to become successful farm owners or managers. This relates mostly to the more specialised skills associated with Business Management (including budgeting, HR, SARS and Administration).To address this need, the MIP Education Forum has engaged and agreed to partner with the Al-Maktoum School of Management Excellence. The school currently offers a highly specialised course in the Equestrian sector, it is very well resourced in terms of facilities and is centrally placed within the MIP. The vision to expand the educational offering to all sectors of Agriculture is shared by all and the Midlands Economic Development Agency has identified it as a cornerstone project. The Agency has made funding available to finalise the accreditation of the school with the AGRISETA. This will be concluded in the first half of 2013, with a view to admissions in January 2014. KEY DELIVERABLES Quantity No farm managers trained per annum 12Average cost per manager 80 000Total annual cost to MIP Education TrustR 960 000 FUTURE FARMERS While the MIP Education Forum will provide oversight to the initiatives listed above, it is important that all education efforts are coordinated and structured. For this the Forum has identified Future Farmers, an NPO based within the MIP, that has been selecting and supporting young black farmers from all agricultural sectors. Their commitment and passion over the years has provided many young farmers the opportunity of a real career in agriculture and the Forum believe that this could be expanded upon within the context of the MIP Education Platform. Their services to the Platform will be : Independent Learner selection – to avoid farmers showing favouritism or being pressurised by communities to select their childrenTo be an intermediary between farmer and student – often this relationship is imbalanced and students tend to live forever in debt and gratitude Learner support – throughout the students education, to be a career guide and councillor relating to academic mattersPrimary school visits and open days Administrator – for the student recordsCoordinator – for all the courses and logistics Operations – liaison with all stakeholders, payments and day-to-day running of the Platform For these services an administration fee will be charged and being a NPO, these will be kept to a minimum. KEY DELIVERABLES Quantity To provide operational, educational, administrative support to the MIP Education Forum and all learners per month thereafter R 50 000 R 600?000 SUMMARY The overall deliverables and budgets of the education Platform are presented hereunder: EDUCATION PROVIDEDNO. LEARNERS PER YEARNO. LEARNERS ALL GRADES TOTAL COSTABET 400 400120 000PRE-PRIMARY 400 400120 000WESTON 5251?500 000TERTIARY 416800 000SHORT COURSES 100 100200 000SCHOOL OF EXCELLENCE 1212960 000FUTURE FARMERS 951600 000TOTAL BUDGET 4?300 000IRRIGATION IMPERATIVES The construction of Spring Grove Dam (SGD) provided an opportunity for the re-evaluation of the Department of Water Affairs (DWA) moratorium prohibiting the construction of dams and the establishment of additional irrigation within the Mooi River Catchment. The onus rested on the MIP project to substantiate what additional storage and irrigation within the catchment was possible without impacting on the Midmar Dam yields or disadvantaging downstream water users. As such the study needed to identify the best means to increase storage and consequently irrigation within the Mooi River Catchment and that would benefit both the users situated alongside the Mooi River and its catchments as well users without direct access to the Mooi River and its tributaries. The construction of SGD in the upper reaches of the Mooi River catchment has the most impact on the water users immediately downstream of the SGD as well as in the adjacent tributary catchments of the Hlatikulu and Little Mooi Rivers. As the catchment area for the existing water use has been diverted to supply SGD and meet growing demands on the Mgeni system. As a result of this any further storage needs to compensate for the impact of SGD and be situated to mitigate the loss experienced by the water users in the vicinity of SGD. Whilst there are water users along the length of the Mooi the highest concentration of agricultural users are situated in the Mooi River Town area and surrounds which is situated towards the top of the Mooi River catchment. To benefit these areas additional storage needed to be established upstream of this commercial agricultural node. Process of identifying additional storage opportunitiesMaking use of available topographical maps, a number of potential sites on both the Little Mooi and Hlatikulu rivers were identified. Site visits to each of these sites along with a basic preliminary geotechnical investigation and ground survey confirmed the viability of these sites. Potential storage identifiedThe sites identified on the Hlatikulu River are as follows;Site 1_Effort: situated on the Effort and Stagstone farms on the lower reaches of the Hlatikulu River is considered to be the most suitable site with an expected storage of 17.5million cubic meters. It is, however, dependant on negotiations with the land owner there is potential to raise this storage closer to 20million cubic metersSite 2_Whyteleaf: is approximately half a kilometre from the confluence of the Hlatikulu River and the Little Mooi River. This site has potential technical difficulties that could increase costs and with a potential storage of 16million cubic meters will store less than the Effort site. Site 3_Broadmoor: This is an excellent site located towards the mid-point of the Hlatikulu River with a potential storage in excess of 18.5million cubic meters. Due to this site covering a prime wetland area, it has been excluded.The Little Mooi River offered two potential sites, these being;Site 4_Kamberg Dam: situated ±10km upstream from the confluence of the Little Mooi and Hlatikulu Rivers has the potential to store 7million cubic meters of water. Site 5_ Dartington Dam: situated 1km downstream of the confluence of the Hlatikulu River into the Little Mooi River, there is potential for a large dam at this site but in order for the site to be cost effective a large dam in excessive of our modelled storage limits would be required. A smaller dam at this site would be expensive to construct and would be unable to effective utilise the available MAR from both catchments and offers no advantage over sites identified on the Hlatikulu River. If a smaller dam is built at this site an estimated dam capacity of 13 million cubic meters is possible. Figure STYLEREF 1 \s 12 SEQ Figure \* ARABIC \s 1 1Hlatikulu and Little Mooi Dam SitesThe decision has been made to construct two dams, one on the Little Mooi River and a second Dam on the Hlatikulu River, the Kamberg and Effort dams are the preferred sites at present and are what have been modelled when determining the hydrology.Irrigation opportunities around this additional storageThe catchment was modelled, using the WRYM model to identify and better understand the opportunities and impacts of the additional storage. The model has been built on an earlier version developed to model SGD. As part of refining and improving the data that is feed into the model the MIP have carried out a verification process to determine the extents of irrigation and dam storage within the MIP project bounds. The MIP has been consulting with the DWA for a number of years on this project and the DWA have confirmed that they will accept this data for the purposes of the hydrological modelling. In addition to establishing the extents of existing irrigation an open consultative process with the local farming community has been conducted to also establish the extents of future irrigation and farm dam’s construction requirements. To ensure that the farmers situated away from the main run of river also have opportunity to benefit from the additional storage, it has been proposed that the environmental releases required by small dams, instead be released from the new dams. Approximate 40 dam have been identified by farmers for construction or increased storage through the raising of the dam wall. For any new dam or alteration to an existing dam to be considered approvals from downstream neighbours was required. MBB has undertaking a number of studies to resolve disputes as well as to vett how realistic the proposed sites were in meeting the farmers stated irrigation and storage targets.The model while not complete has indicated that additional storage of approximately 25 million cubic meters on the Little Mooi and Hlatikulu Rivers will not impact on the yields from SGD and Mearns Weir to the Mgeni system, and has the potential to sustain the following, Approximately 1900ha of irrigation within the current Mooi River and Hlatikulu River Irrigation Board areas. Not all this is new lands and also encompasses improved irrigation on existing irrigated fields as well as Dryland fields. This also includes irrigation from new farm dams. Approximately 200ha of new irrigation for a developing dairy initiativeApproximately 1000 ha’s of irrigation should be available to the Muden and Middlerus areas to assist developing farmers in these areas. Additional storage will also improve the assurance of supply for most irrigators, when compared to the assurances available after the completion of SGD and the implementation and enforcement of environmental releases. Ultimately the purpose of the modelling exercise is to substantiate that there is sufficient water for further development in the Mooi River catchment and provide the supporting information required by the DWA, to approve the licences to construct the proposed additional storage. Issues needing to be resolved Prior to Submitting the LICENCEWhilst a substantial amount of work has been completed and finance by the MIP to get the project to its current point a number of items still need to be finalised before the licence application can be submitted to the DWA. Completion of the Hydrological ModellingIn order to complete the hydrological modelling the following is required; Securing of the Dam SitesThe land on which the Hlatikulu and Kamberg Dams are to be built needs to be secured and negotiations with the land owners resolved, as this impact on both the site and the level to which water can be stored. Water Use from Craigieburn DamThe model currently allocates the water demand from the Craigieburn Dam based on the registered use, recorded in the DWA WRMS document. An application has since been made by the UMzinyathi District Municipality to abstract water from the Craigieburn dam to supplement Greytown water supply. In assessing this, a number of inaccuracies have been discovered that need to be corrected, these are as follows; Water use from the KwaZulu Weir and canal which supplies water to tribal areas around Muden, has not been registered, it is estimated that ±600ha of land is available for irrigation from the canal and this needs to be accounted for.The Craigieburn Dam was constructed to ensure water was available to secure the spring blossoming of the citrus crops established around Muden. However the intention was that water would only be supplied from the Craigieburn Dam as a supplementary source when insufficient water is available from the Mooi River. Currently this is not reflected in the WRMS database and the model will need to be adapted to reflect this relationship. This has the potential to reduce the water available and the development areas in the upper reaches of the catchment as the MIP cannot disadvantage existing downstream users. The Craigieburn dam is being assessed to establish whether the dam can meet the UMzinyathi’s municipality’s requirements at the appropriate level of assurance. Once a decision is reached on this issue the MIP hydrological model can be updated to reflect this change.Geotechnical InvestigationsFull geotechnical assessments need to be completed to confirm the suitability of the site and materials for dam construction. The final site needs to be known and access to these site available, prior to these assessments being undertaken. Environmental Impact AssessmentsNo licence can be submitted without an understanding of the environmental impacts, the licence application itself will required environmental impact forms to be filled out and any approvals will be contingent on a ROD being issued by the Department of Environmental Affairs. Both these processes are reliant on information from an Environmental Impact Assessment. The MIP has consulted with Ezemvelo-KZN, and Environmental Affairs as well as many other environmental consultants in establishing the best processes and outcomes required from any environmental studies that are required. Preliminary Design The preliminary design for both the Hlatikulu and Kamberg Dams will need to be completed prior to applying for a licence.Programme to completion The interrelationship of a number of the outstanding issues makes it difficult to predict accurate timelines; however the order of events and the associated costs are described below in the order of priority;The dam sites need to be secured, estimated cost of expropriation R 20 m Geotechnical Investigations for the Hlatikulu and Kamberg Dam sites to be completed, this is estimated to cost a total of R300?000 and require three months to complete. Water use from Craigieburn needs to be finalised and modelled, with the final dam sites to gauge the impact on the projects water resources. this is likely to require 4 months to complete, once funding is sourcedThe model can be finalised after the above items have been resolved, and will cost an estimated R75?000 to finalise. This should be able to be completed within a month. The Preliminary Design can commence once the site has been secured and the geotechnical studies completed, this will require 2 months to undertake and is estimated to cost R500?000.Environmental Impact assessments for both sites will need to have been completed to form part of the licence application The submission of the licence application for both the Hlatikulu and Kamberg Dams is estimated to cost R300?000. The timing is dependent on the DWA processes but is likely to take 8 months to complete.FINANCIAL SUMMARY Summary of project costs As an exhibition of their commitment towards transformation, the farmers of the MIP have contributed an amount of R 6.5m. It must be appreciated that very few voluntary organisations, in any sector, have demonstrated such support for a project with such broad beneficiation. A summary of the project costs is presented hereunder : SUMMARY OF PROJECT BUDGETACTIVITY ?Paid to Date Balance TOTAL Consulting - prelim assessments, cost estimates, feasibility, water balance modelling?1?500 000500 0002?000 000?????Project Management ?325 000500 000825 000?????Water Management ?425 000396 000756 000?????Environmental?250 0000250 000?????ExpropriationLittle Mooi10?000 00010 000 000?Hlatikulu10 000 00010 000 000?????Licence applications?25 000300 000300 000?????Legal costs?120 0000120 000?????Construction of big damsLittle Mooi025 000 00025 000 000?Hlatikulu045 000 00045 000 000?????Consulting Engineering for dams est 10%?07 000 0007 000 000?????Escalation0.1032 246 02032 246 020?????TOTAL EXPENDITURE?2 645 000130 442 020133 087 020 Financial Considerations In terms of the above the following is presented to the Department of Water Affairs as a realistic model for the collaborative approach to the project.Education Platform To finance the requirements of the Education Platform, using interest from an equity fund, it is proposed that the full contribution, to be made by the commercial farmers, being R43 m, be utilised. Interest at 10% amounts to R 4.3 m which would cover 100% of the total annual operational costs of the Platform. Any additional funding for the expansion of the platform will be requested from the AGRI SETA and other bursaries on an annual basis. Assuming the above to be acceptable, the following model is proposed: ITEM FUNDER AMOUNT PERCENTAGE All infrastructure, planning and Professional fees DWAR 130?000 00074Education Platform & Costs to Date MIPR 45?000 00026 Economic Implications Based on the transformational projects as well as the economic implications of the extended hectares under irrigation the economic indicators for the project are summarised as follows : SECTORNEW COMMERCIAL HECTARES IRRIGATED NEW BEE HECTARES IRRIGATEDTOTAL NEW HECTARES JOBS CREATED TOTAL REVENUE INCREASE TOTAL BEE REVENUE INCREASEDAIRY 1 5003501 85045099?000 00023?000?000 VEGETABLE 4006501050178524?000 00039?000 000BEEF 50501521?000?000 TRADITIONAL PLANTS 2525305?000 000EQUESTRIAN 808051?000 000GOATS 91 000 000500 000TOTALS1 90011553 0552 294124?000 00089?500 000 ................
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