BUSINESS PLAN
for
Mpofana Irrigation Project
AGRICULTURAL TRANSFORMATION
THROUGH
INFRASTRUCTURE AND EDUCATION
December 2012
MIP under the auspices of The Mooi River Irrigation Board
(converting to the Mpofana Water Users Association)
And the Mooi River Farmers Association
PO Box 134
Mooi River
3000
Contents
PROJECT CHARTER .................................................................................................................................. 4
1.
EXECUTIVE SUMMARY .................................................................................................................... 8
2.
PROJECT SUMMARY & DEVELOPMENTAL SCORECARD .................................................................. 9
3.
BACKGROUND ............................................................................................................................... 10
4.
CONCEPT ....................................................................................................................................... 11
5.
VISION ........................................................................................................................................... 11
6.
MISSION ........................................................................................................................................ 11
7.
OBJECTIVES ................................................................................................................................... 12
8.
LOCATION AND SITUATIONAL ANALYSIS ...................................................................................... 12
9.
PROJECT INTEGRITY and PROGRESS ............................................................................................. 14
9.1.
Mpofana Water Users Association & Catchment Management Strategy ............................ 14
9.2.
Technical Hydrological Studies ............................................................................................. 14
9.3.
Web based Project Management Tool ................................................................................. 15
9.4.
Socio Economic Impact Assessment ..................................................................................... 15
10.
DEVELOPMENTAL INITIATIVES .................................................................................................. 16
10.1.
Methodology ..................................................................................................................... 16
10.2.
Dairy .................................................................................................................................. 17
10.3.
Beef livestock .................................................................................................................... 18
10.4.
Vegetables......................................................................................................................... 20
10.5.
Goat................................................................................................................................... 22
10.6.
Equestrian ......................................................................................................................... 23
10.7.
Traditional Medicines ....................................................................................................... 24
11.
Education Platform ................................................................................................................... 26
11.1.
ABET .................................................................................................................................. 29
11.2.
PRE-PRIMARY .................................................................................................................... 29
11.3.
OUTREACH TO PRIMARY SCHOOLS ................................................................................... 30
11.4.
WESTON AGRICULTURAL COLLEGE ................................................................................... 30
11.5.
CEDARA and UKZN ............................................................................................................ 30
11.6.
SHORT COURSES ............................................................................................................... 31
11.7.
SCHOOL OF EXCELLENCE ................................................................................................... 31
11.8.
FUTURE FARMERS ............................................................................................................. 32
11.9.
SUMMARY ......................................................................................................................... 33
12.
IRRIGATION IMPERATIVES ........................................................................................................ 33
12.1.
Process of identifying additional storage opportunities ................................................... 34
12.2.
Potential storage identified .............................................................................................. 34
12.3.
Irrigation opportunities around this additional storage ................................................... 35
12.4.
Issues needing to be resolved Prior to Submitting the LICENCE....................................... 37
Completion of the Hydrological Modelling ................................................................................... 37
Geotechnical Investigations .......................................................................................................... 38
Environmental Impact Assessments ............................................................................................. 38
Preliminary Design ........................................................................................................................ 38
12.5.
13.
Programme to completion ................................................................................................ 38
FINANCIAL SUMMARY............................................................................................................... 39
13.1.
Summary of project costs ................................................................................................. 39
13.2.
Financial Considerations ................................................................................................... 40
13.3.
Economic Implications ...................................................................................................... 41
Giants Castle at the West end of the Project
PROJECT CHARTER
Project Name
Project Controller
Project Manager
Supporting Departments
Beneficiaries
Possible investors
Total Budget
Mpofana Irrigation Project
Mpofana Water Users Association (formally Mooi River Irrigation Board)
Graham Armstrong
Dept. of Water Affairs
Midlands Economic Development Agency
Dept. of Agriculture, Environmental Affairs and Rural Development
Dept. of Rural Development and Land Reform
Dept. of Economic Development and Tourism
Dept. of Cooperative Governance and Traditional Affairs
Mpofana Municipality
Mngungundlovu District Municipality
Office of the Premier
1) All emerging farmers included in the Midlands Outgrowers and Processing Plant project
2) Emerging Livestock farmers
3) Emerging Dairy farmers
4) Goat farmers within communities of the Catchment area
5) Emerging farmers in the Tendele Community of the Kamberg Valley
6) Malulekosi Herbs herb and traditional medicine production
7) Youth and aspirant black farmers through the Midlands Education platform
8) Farm workers through increased commercial farming production
1) Commercial Farmers
2) DWA
3) DRDLR
4) DAE
5) ADA acting as an agent to Government organisations
6) Mpofana Municipality
7) Ithala Development Finance Corporation
1) Construction of dams and directly related costs = approximately R130,000,000
2) Projected infrastructure costs by commercial farmers and developing farmer projects = >
R500,000,000
Project Outcome/Final Product
The 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 :
a) Provide the platform for increased economic activity within the catchment in excess of
R 120 m per annum
b) Provide structured sectoral BBEE agricultural initiatives within the Dairy, Beef, Goat and
Vegetable areas, with special focus on Land Reform Beneficiary farms
c) Increase employment opportunities by + 2 300 jobs (30% increase)
d) Allow for 15 on-farm dams off-stream of the rivers (total capacity of +/- 5mil m³) to be
constructed and funded by individual farmers
e) Provide 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 irrigation
-
Approximately 1 100 ha of new irrigation for emerging farmer projects and sustaining
present operations
1 900 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/a
Production from 1 050 ha for crops = R 60,000,000 p/a
400 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
1) 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/a
2) Midlands Outgrower and Processing Plant Project, with 650 Ha new vegetable
irrigation for BEE farmers
3) Middlerus Beef Project, approximately 8 000 Ha of ranching, encompassing
approximately 30 traditional beef farmers in centralised commercial enterprise
4) Equestrian BBEE Equity Ownership Programme, with 80 Ha of new irrigation for BEE
participants
5) Mpofana Industrial Park, housing the Agriprocessing Hub in Bruntville
6) Hillendale Goat Initiative, providing centralised goat supply and management to
emerging farmers
7) Midlands Education Platform – holistic programme aimed at farm dwellers and
employees
8) Traditional Medicinal Plant – the establishment of 3 commercial enterprises cultivating
at least 5 Ha of high demand traditional plants each
Project brief/Scope of work
 Identify, 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.
1. 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.
2. 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;
1. Emerging farmers – Existing and New
2. 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 :
A. 8 million m³ dam on the Little Mooi River
B. 17 million m³ dam on the Hlatikulu River (a tributary of the Little Mooi River)
C. 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 Agriprocessing 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 Road
In terms of transformation the following deliverables have been set by the project
Impact
Jobs retained
Direct new jobs created
Indirect new jobs created
Temporary new jobs created (dam building)
Seasonal new jobs created
People annually supported in education platform
SMME’s supported
Time frame for implementation
Total Cost
Scale
6 000
2 300
50
300
200
951
50
5 years
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.
3. 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.
4. 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.
5. VISION
Through Public - Private collaboration, become a Provincial flagship project that
maximises sustainable transformation and education opportunities within the
Agricultural sector.
6. MISSION

To unlock a significant transformation projects in each of the sectors of dairy,
beef, vegetable, equestrian and goat farming

To 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 area

To be a driver of Public – Private relations

To be the regional driver of renewable energy practices among farmers within
the catchment area

To 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
7. OBJECTIVES
 Creation of 2 300 jobs
 Increased economic activity by an estimated R 120 m per annum
 Annual Education opportunities for farm dwellers as follows :
o ABET
400
o Pre-school children
400
o High School Bursaries
25
o Short Courses
100
o Tertiary Bursaries
16
o School of Excellence Bursaries
12
 Positioning of 2 new black farm owners per annum
8. LOCATION AND SITUATIONAL ANALYSIS
The 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
GARY
The 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?
9. PROJECT INTEGRITY and PROGRESS
9.1.
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.
9.2.
Technical Hydrological Studies
MBB 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.
9.3.
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.
9.4.
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.
10.
DEVELOPMENTAL INITIATIVES
IT 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
10.1. 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
Councillors
Viniculture
Pork
Poultry
Livestock
Dairy
Education
14 August
16 August, 3 October
17 August
22 August
23 August
23 August, 5 October
14 September
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:
1) Project Steering Committee,
Inaugural meeting 28 August
Representatives from the following :
DEDT, COGTA, DAE, MIP, Ithala Development Finance Corporation,
Mpofana Municipality and DWA
2) 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.
10.2. Dairy
COMPONENT
PROJECTS
New Irrigated Hectares
New permanent Jobs
NAME / VALUE
SENGANI
350
30
The 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 tailormaking 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 farm
Farm 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 maize
The Trust will then generate revenue from maize sales as well as from a
share in the profits of the increased dairy farming operation
10.3. Beef livestock
COMPONENT
PROJECTS
New Irrigated Hectares
New permanent Jobs
NAME / VALUE
UDINE
KLAVERVLEI
ZULU FALLS
ELANDS FONTEIN
50
15
Livestock 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
10.4. Vegetables
COMPONENT
PROJECTS
New Irrigated
Hectares
New Permanent Jobs
NAME / VALUE
Middlerus
Mission – Muden
Mooi Draai – Muden
Craigie Burn
650
1100
Extensive 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 agriprocessing 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 Lethu

David 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 )
10.5. Goat
COMPONENT
PROJECTS
New Irrigated
Hectares
New Permanent Jobs
NAME / VALUE
Hillendale
0
9
The 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 :
1)
2)
3)
4)
Phase 1
Identify 3 coops with access to land, within a 50km radius of the farm
Provide these coops with young males as a 6 month training period
Once 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
5) 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
6) 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
10.6. Equestrian
COMPONENT
PROJECTS
New Irrigated Hectares
New Permanent Jobs
NAME / VALUE
Summerhill Stud
80
5
Summerhill 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
10.7. Traditional Medicines
COMPONENT
PROJECTS
New Irrigated Hectares
New Permanent Jobs
NAME / VALUE
Roslyn
25
30
For 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;
1. Slow growing
2. Source of Parent materials
3. Viewed as a “community” and not commercial commodity
In 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.
Mr 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
11.
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 frameworks

It 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 University
 Midlands 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
opportunities
 Al-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 :
MIP EDUCATION TRUST
School of Management Excellence
CEDARA
CEDARA
MCC
Short Courses
Weston
UKZN
Future Farmers
Weston
Agricultural
College
PRE-PRIMARY – Commercial Farmers & Wives
ABET – Existing Schools
The components of the Education Platform are expanded upon as follows:
11.1. ABET
While this is already taking place within the area on an isolated project-byproject 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 DELIVERABLES
No farms Targeted
No Adults Trained per annum
Additional stipend contribution to teacher per annum
Total cost to MIP Education Trust
Quantity
20
400
R 6 000
R 120 000
11.2. 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 DELIVERABLES
No farms Targeted
No Children Attending Preschools
Stipend contribution to teacher / farmers per annum
Total cost to MIP Education Trust
Quantity
20
400
R 6 000
R 120 000
11.3. OUTREACH 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.
11.4. 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 DELIVERABLES
No Children per annum
No children in total (grades 7-12)
Cost per child per annum
Total annual cost to MIP Education Trust
Quantity
5
25
R 60 000
R 1.5m
11.5. 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 DELIVERABLES
No Students per annum
No students in total (4 years)
Total cost per student per annum
Total annual cost to MIP Education Trust
Quantity
43
16
R 50 000
R 800 000
11.6. SHORT COURSES
These 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 DELIVERABLES
No farm workers trained per annum
Average cost per short Course
Total annual cost to MIP Education Trust
Quantity
100
2 000
R 200 000
11.7. 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
No farm managers trained per annum
Average cost per manager
Total annual cost to MIP Education Trust
Quantity
12
80 000
R 960 000
11.8. 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
children
 To 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 matters
 Primary school visits and open days
 Administrator – for the student records
 Coordinator – for all the courses and logistics
 Operations – liaison with all stakeholders, payments and day-today 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
To provide operational, educational,
administrative support to the MIP
Education Forum and all learners
per month thereafter R 50 000
Quantity
R 600 000
11.9. SUMMARY
The overall deliverables and budgets of the education Platform are
presented hereunder:
EDUCATION
PROVIDED
NO.
LEARNERS
PER YEAR
400
400
5
4
100
12
ABET
PRE-PRIMARY
WESTON
TERTIARY
SHORT COURSES
SCHOOL OF
EXCELLENCE
FUTURE FARMERS
TOTAL BUDGET
12.
NO.
LEARNERS
ALL GRADES
400
400
25
16
100
12
TOTAL COST
951
600 000
4 300 000
120 000
120 000
1 500 000
800 000
200 000
960 000
IRRIGATION IMPERATIVES
The construction of Spring Grove Dam (SGD) provided an opportunity for the reevaluation 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.
12.1. Process of identifying additional storage opportunities
Making 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.
12.2. Potential storage identified
The 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 meters

Site 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 12-1
Hlatikulu and Little Mooi Dam Sites
The 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.
12.3. Irrigation opportunities around this additional storage
The 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 initiative

Approximately 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.
12.4. Issues needing to be resolved Prior to Submitting the LICENCE
Whilst 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 Modelling
In order to complete the hydrological modelling the following is required;
Securing of the Dam Sites
The 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 Dam
The 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 Investigations
Full 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 Assessments
No 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.
12.5. 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;
1. The dam sites need to be secured, estimated cost of expropriation R 20 m
2. 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.
3. 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 sourced
4. The 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.
5. 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.
6. Environmental Impact assessments for both sites will need to have been
completed to form part of the licence application
7. 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.
13.
FINANCIAL SUMMARY
13.1. 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 BUDGET
Paid to
Date
Balance
TOTAL
1 500 000
500 000
2 000 000
Project Management
325 000
500 000
825 000
Water Management
425 000
396 000
756 000
Environmental
250 000
0
250 000
10 000 000
10 000 000
10 000 000
10 000 000
ACTIVITY
Consulting - prelim
assessments, cost estimates,
feasibility, water balance
modelling
Expropriation
Little Mooi
Hlatikulu
Licence applications
25 000
300 000
300 000
Legal costs
120 000
0
120 000
0
0
25 000 000
45 000 000
25 000 000
45 000 000
0
7 000 000
7 000 000
0
32 246 020
32 246 020
Construction of big dams
Little Mooi
Hlatikulu
Consulting Engineering for dams
est 10%
Escalation
0.1
2 645 000
130 442 020
133 087 020
TOTAL EXPENDITURE
13.2. 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
All infrastructure, planning
DWA
and Professional fees
Education
Platform
&
MIP
Costs to Date
AMOUNT
R 130 000 000
R 45 000 000
PERCENTAGE
74
26
13.3. 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 :
SECTOR
DAIRY
VEGETABLE
BEEF
TRADITIONAL
PLANTS
EQUESTRIAN
GOATS
TOTALS
NEW
COMMERCIAL
HECTARES
IRRIGATED
1 500
400
1 900
NEW BEE
HECTARES
IRRIGATED
TOTAL
NEW
HECTARES
JOBS
CREATED
TOTAL
REVENUE
INCREASE
TOTAL BEE
REVENUE
INCREASE
350
650
50
25
1 850
1050
50
25
450
1785
15
30
99 000 000
24 000 000
23 000 000
39 000 000
21 000 000
5 000 000
80
80
5
9
2 294
1155
3 055
1 000 000
124 000 000
1 000 000
500 000
89 500 000