THE ESTABLISHMENT OF COMMERCIAL CRITERIA TO
ASSIST IN THE EVALUATION OF BROAD BASED
ECONOMIC EMPOWERMENT FOR ECOTOURISM
PROJECTS IN THE NMBM
_________________________________________________________________________________
Prepared For:
NELSON MANDELA BAY MUNICIPALITY: DIRECTORATE PUBLIC HEALTH
_________________________________________________________________________________
MAY 2011
Prepared by:
R.I.C.
RAND INTERNATIONAL CAPITAL
‘Development Finance
and Economics’
derekzim@worldonline.co.za
NMBM ECO-TOURISM – NATURE RESERVE RFP
R.I.C.
TABLE OF CONTENTS
1
OVERVIEW OF THE REQUIREMENT..................................................................... 3
1.1
1.2
Background ............................................................................................................................... 3
The Terms of Reference and Methodology Adopted ................................................................ 4
2
THE MINIMUM REQUIREMENTS FOR FINANCING - DBSA ................................. 5
2.1
2.2
2.3
2.4
2.5
Environmental Guidelines for the DBSA ................................................................................... 5
Enterprise Development and the DBSA ................................................................................... 8
Tourism and Local Economic Development (LED) ................................................................... 9
Sustainable Development and the DBSA ............................................................................... 10
Conclusion – DBSA Requirements ......................................................................................... 11
3
THE REQUEST FOR PROPOSALS (RFP) ............................................................ 12
3.1
3.2
3.5
Purpose and Background ....................................................................................................... 12
The Scope Of Work ................................................................................................................ 13
3.2.1
The Eco-Tourism Operator ....................................................................................... 13
3.2.2
The Community Partner to the Operator .................................................................. 14
3.2.3
The Eco-tourism Operating Model and Project Viability........................................... 14
The Minimum Criteria For The Proposal Document ............................................................... 15
3.3.1
Executive Summary ................................................................................................. 15
3.3.2
Architectural Requirements ...................................................................................... 16
3.3.3
The DBSA Funding Criteria ...................................................................................... 16
3.3.4
The Financial Offer to the NMBM ............................................................................. 16
Evaluation and Adjudication Process ..................................................................................... 17
3.4.1
Functionality Criteria Score Sheet ............................................................................ 17
3.4.2
Additional Documents Required ............................................................................... 18
3.4.3
Sworn Statements .................................................................................................... 18
3.4.4
Black Economic Empowerment (BEE) Status .......................................................... 18
The Timeframes for the Process............................................................................................. 19
4
APPENDIX............................................................................................................. 20
4.1
4.2
4.3
4.4
Budgeted Income Statement .................................................................................................. 20
Functionality Criteria Score Sheet .......................................................................................... 21
Affidavit – Historically Disadvantaged Individuals – HDI Status ............................................. 22
Affidavit and Tax Clearance Certificate Recordal ................................................................... 24
3.3
3.4
LIST OF TABLES
Table 1:
Table 2:
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DBSA Environmental Project Report Structure ................................................................. 7
NMBM Rental Proposal Form .......................................................................................... 17
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OVERVIEW OF THE REQUIREMENT
1.1
Background
R.I.C.
The Public Health Directorate of the Nelson Mandela Bay Metropolitan Municipality (the
NMBMM) intends to request proposals from broad based economic empowerment (BBEE)
groupings from pre-designated previously disadvantaged communities to partner with private
developers as minority shareholders (PROBABLY ON A 75/25 basis) to develop eight (8)
nature reserves in the Metro, namely Maitland, Settlers Park, Dodd’s Farm, Victoria Park and
St Georges Park, Van Stadens, Springs and Van Der Kemp’s Kloof.
The Nelson Mandela Bay Metropolitan Municipality comprises 195,412 hectare (1,954 km²),
of which approximately 8,500 hectare is formally protected, representing many of the rare
and threatened habitats within the area. A large percentage of this area is currently being
managed by the Nelson Mandela Bay Municipality (NMBM) by means of these nature
reserves. Essentially these are to be placed under the control of the private sector.
Surrounding several of these reserves are rural communities living in poverty. The Public
Health Directorate has identified an opportunity for using this biodiversity economy to create
potential avenues for economic development in these communities.
Plans for upgrading and developing a number of reserves, specifically Settlers Park
(including Dodds Farm, Victoria Park and St Georges Park), Maitlands, Van Stadens, Van
der Kemps Kloof and Springs Nature Reserves, are currently underway by means of
partnerships with private developers. A call for proposals from private developers will also be
advertised in parallel with this process. If successful, these upgrades and developments will
play an important role in creating employment opportunities as well as a sense of community
custodianship for these areas. With the right development, these reserves have the potential
to attract increased tourism to the Metro.
The above mentioned Nature Reserves will be developed through a collaborative venture
comprising of the Municipality, Private Developers (with experience in the Ecotourism
Sector), the community and South African Development Agencies including DBSA, IDC and
ECDC.
The Municipality will be requesting proposals from Community Trusts, Cooperatives or Joint
Ventures (JV’s) between Community Trusts and Cooperatives, Cooperatives and black
owned companies or Community Trusts and black owned companies. These BBEE entities
need to satisfy a set of minimum requirements in order to satisfy the NMBM BBEE policy.
The successful tenderer will be required to conclude an agreement with the majority
shareholder, the private developer. The type of agreement and legal entity to be formed for
the agreement is still to be determined.
The proposal submitted by tender respondents needs to be Broad Based Economic
Empowerment (BBEE) compliant as well as be based upon sound commercial principles for
eco-tourism orientated projects. The selected respondents should ideally be deemed to be
appropriate as a JV partner by the Private Developers and funding agencies who could be
participating in the projects.
It is the purpose of this report to propose a methodology to ensure that the BBEE responses
to the Call For Proposals are compliant with the NMBM procurement process and that the
commercial requirements of the private sector partners and financiers are complied with.
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The Terms of Reference and Methodology Adopted
The brief for Rand International Capital is to assist in the preparation of a sound framework
for the evaluation of the tender responses from the community organisations and entities
which are expected to respond to the ecotourism opportunities.
No formal terms of reference has been prepared by the client and a series of meetings have
been held with the client and their various service providers in order to gain a proper
understanding of the project requirements. More specifically, meetings have been held with
Mr. Joram Mkosana, Mrs. Hedwig Crooijmans, Mr. Ed Murray and telephonic discussions
held with Mr. Louis Lombard of the DBSA. From these discussions and the perusal of various
documents supplied and sourced, a realistic overview of the project requirements has been
formulated.
From the above, we have interpreted the requirement to be threefold, with the three
processes being sequential. The steps which we have followed have been to:
a.
Determine the project objectives and the envisaged outcomes for the client, the NMBM,
the nature of the relationships which are anticipated to be formed for the execution of
the various projects and the process required to achieve this;
b.
Establish the technical and financial feasibility of the proposed ecotourism development
framework and determine the critical success factors and the financial and commercial
elements which would be deemed to be a minimum requirement for the successful
implementation of the projects;
c.
Develop the relevant section and criteria of any Request For Proposals (RFP) which
would be issued to the public in order to solicit responses from the targeted
communities. This would include a weighting or evaluation scoresheet for the
adjudication of the responses received from the respondents.
A range of issues have needed to be investigated in order to formulate the commercial basis
required for the selection process. A broad overview of the steps to be undertaken in order to
complete the brief is as follows:1.
2.
3.
4.
Evaluate the existing situation and work completed for the proposal;
Prepare ‘Minimum Requirements for Proposal Document’;
Establish the DBSA Funding Criteria and Minimum Requirements, and
Prepare the relevant sections for inclusion in the RFP documents.
With the absence of constructive cooperation from the DBSA, we have evaluated a number
of their policy documents and created a set of project criteria based upon our interpretation of
these documents. The DBSA still need to be consulted with in order to verify this
interpretation.
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THE MINIMUM REQUIREMENTS FOR FINANCING - DBSA
The financing requirements of the Development Bank of South Africa (DBSA) have been
evaluated in order to establish the extent to which specific compliance is required by the
applicants to this RFP in order to be eligible for the financial assistance in the form of both
debt and equity that the DBSA has indicated it is willing to provide for the NMBM nature
reserve projects. The DBSA has indicated its willingness to support these developments with
their development finance programmes, conditional upon their policy and financing criteria
being met.
The Development Bank of Southern Africa (DBSA) is a development finance institution (DFI)
that finances the creation of infrastructure in South Africa and the southern African region.
Although wholly owned by the government of South Africa, the DBSA serves all of the
member countries of the Southern African Development Community (SADC).
The DBSA is a responsible corporate entity and applies internationally accepted project
screening and business appraisal criteria in the evaluation of all potential projects for funding
purposes. Standard credit risk measures are applied to all projects which are funded,
although a preference is for projects which promote economic development within the region
and lead to improved standards of living for SADC citizens.
The Development Bank of Southern Africa Act, No. 13 of 1997, defines the primary purpose
of the Bank as promoting economic development and growth, human resource development
and institutional capacity building by mobilising financial and other resources from the
national and international private and public sectors for sustainable developmental
programmes and projects. This requires it, among other objectives, to do the following:

Appraise, plan and monitor the implementation of development programmes and
projects.

Fund or mobilise funding, in line with the regulations to the Act, for initiatives aimed at
minimising or mitigating the environmental impact of development programmes or
projects.
In terms of these provisions, the DBSA is committed to promoting sustainable development
and building the institutional capacity of its borrowers. It recognises that the integrated and
sustainable management of the environment, now and in the future, is the basis for
sustainable development in all areas of human activity. In terms of this commitment, the
DBSA developed a policy framework for environmental appraisal, which comprises the
environmental policy of the DBSA Group and the procedural framework outlined hereafter.
2.1
Environmental Guidelines for the DBSA
The DBSA follows a lifecycle approach to projects by assisting borrowers in designing an
appropriate system for environmental management and helping to build their capacity to fulfil
their environmental obligations. The DBSA does not, however, manage the environmental
concerns associated with any project on behalf of the borrower. The borrower remains
completely responsible for managing these and, in its ongoing interaction with borrowers, the
DBSA avoids creating any dependency by the borrower in this regard.
In the appraisal process, the DBSA aims to achieve the following:
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
Identify opportunities to maximise the developmental and environmental benefits of
projects and promote sustainable development.

Assist management in deciding whether to support a project, based on its
environmental risks.



Minimise the environmental risks and liabilities of both the project and the DBSA.
Assist the borrower in obtaining any legislated environmental authorisations that may
be necessary.
Assist borrowers in building their environmental capacity.

Identify ways to prevent, minimise, mitigate or compensate for the environmental risks
and/or impact associated with projects.

Assist in the development of conditions to be included in the loan agreement with
borrowers.1
The guiding principle of the appraisal process is to ensure that DBSA supported interventions
are economically, socially and environmentally sustainable, in accordance with the principles
of sustainable development outlined in the National Environmental Management Act (NEMA)
and any of its successors in title. Integral to these principles, particularly the precautionary
principle, is the requirement that the environmental risk of a proposed project must be
properly assessed and managed. Four sources of environmental risk must be considered in
environmental appraisals. These are:

Environmental impact: Risks emerging from the nature and impact of the project could
include, for example, the potential of a waste disposal site to pollute groundwater, or of
road fill contaminated with heavy metals to lead to toxic runoff.

Legal requirements: Non-compliance with the legislative regime is a significant source
of risk. Legal risks can include siting requirements such as planning authorisation and
EIA approvals, operating requirements such as water permits, and environmental liability
regimes that link the proponents of a project to any existing or future contamination.

Institutional capacity: Any limitations of the capacity of an institution to fulfil
environmental requirements during the implementation, operation and maintenance of a
project can present a significant risk.

Public and political concerns: Environmental issues have a high potential for
reputational risk and even conflict owing to public and political concerns.
Environmental assessments are not limited to risks; the DBSA also appraises the
environmental benefits of projects. In line with the DBSAs policy and the sustainability
principles, the appraisal process actively considers ways to improve environmental benefits,
for instance by exploring alternatives that may have a larger positive impact on the
environment.
Appraisals of projects within South Africa are based on the NEMA principles. Appraisals of
private sector projects outside of South Africa, especially those with a high environmental
risk, must use international good practice on social and environmental assessment,
particularly the Performance standards on social and environmental sustainability of the
International Finance Corporation (2006).
All projects being considered for support are subject to an environmental appraisal; this must
1 . Development Planning Division. 2009. Guidelines for environmental appraisal at the DBSA.
Technical Document Series No. 1, DBSA: Midrand.
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be submitted to the DBSA project manager, in writing, according to the format outlined in the
DBSA document. The appraisal must be conducted by an environmental analyst, and such
an analyst must therefore be on every DBSA project team that does appraisals. The required
table of contents for environmental project reports is given below, with a brief description of
the requirements in each section:
Table 1:
Report Section
Project title, project
number, borrower and
implementing agent
Purpose of the report
Project overview
Appraisal methodology
Environmental
assessment process
Legislative and
regulatory issues
Institutional capacity
for environmental
management
Environmental risk
assessment
Developmental impact
Credit lines
Monitoring
requirements
Conditions for
inclusion in the loan
agreement
Conclusion
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DBSA Environmental Project Report Structure
Description Of The Requirement
At the beginning of the report.
Clear identification of the project and borrower.
A statement that the report documents the results of the environmental
appraisal of the project
An overview of the project, identifying:
Issues to be considered in the appraisal.
The need for the project.
Any alternatives.
Details of the methodology, including:
Specifics about site visits, key documents and personnel consulted,
information and documentation reviewed discussions held, etc.
Any assumptions or limitations.
Details of agency (credit line) requirements.
Details of the environmental assessment process, including:
A statement on its adequacy.
Motivation or discussion of deviations from the guidelines.
An opinion, with supporting argumentation, on the quality and adequacy of
information provided, such as the EIA, scoping report and EMP.
Any project-related legislative or regulatory issues and their status, e.g.
EIA requirements or water permits.
An assessment of the institutional capacity of the borrower for
environmental management (high, medium or low).
Proposals on the need for technical assistance.
For each environmental risk identified in the tables appended to the
appraisal report (Appendix 1):
An explanation of the assessment of the magnitude of the impact and the
probability of the risk, and details of the criteria used.
A description of mitigation measures and their effect on the risk ratings.
The effect of the institution’s capacity for environmental management, in
view of the magnitude of the impact and the probability of the risk.
The environmental benefits, in terms of the environmental sustainability of
the project (if any).
A recommendation on possible environmental indicators for the project.
For relevant projects:
A statement that the project is allocated to a specific credit line.
The environmental conditionality and how this has been met.
Recommendations on approaches to the monitoring requirements, based
on:
The risk assessment.
The point in the project lifecycle where the risks occur e.g. during the
construction phase.
Suspensive or further terms and conditions.
A summary of the results of the environmental risk assessment.
Key issues that emerge from the appraisal process.
Any environment-related project issues.
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Report Section
References
Appendix 1
Appendix 2
2.2
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Description Of The Requirement
Any documentation used.
Personal communications referred to in the report.
Summary table on environmental risk assessment.
Recommended contents for the consolidated appraisal report.
Enterprise Development and the DBSA
The DBSA has formulated an Enterprise Development strategy which they intend to apply to
a number of pilot projects in order to establish its ability to meet developmental objectives2.
Economic growth is fundamental to addressing unemployment, gender equality, health and
other poverty related issues worldwide. Enterprise development (ED) is an important tool and
essential element to economic growth. Raizcorp in an article entitled Enterprise Development
Made Easy3, defines enterprise development as investing time, knowledge and capital to
help Small and Medium Enterprises establish, expand or improve businesses including
empowering modest income generating informal activities to grow and contribute to the local
economy.
According to the Tourism Empowerment Council of South Africa (TECSA), a company
enterprise development policy should be developed with outcomes in mind such as:

steering the economy towards a stable environment that nurtures growth and increases
the country’s economic competitiveness,

fostering a synergistic relationship between private and public sector to embrace social
investment as a common vision, and

fostering an entrepreneurship culture amongst previously disadvantaged groups.
Through enterprise development people can earn a living and rise out of poverty. In turn and
over time, they create jobs as well as empower other individuals and the communities in
which they live. Market development, commercial business services and social enterprise are
part and parcel of Enterprise Development. Moreover it encompasses finance,
entrepreneurship development, investment and growth in Small Medium and Micro
Enterprises (SMMEs), including initiatives that range from enabling the start-up of small
businesses to providing business skills development through training, mentoring and
coaching.
The DBSA has presented an overall strategy at their various management forums, following
a five pronged approach of financier, partner, advisor, implementer and integrator to build
human capital and institutional capacity as per the DBSA mandate. The DBSA favours a 10step strategy starting with identifying opportunities for Enterprise Development within its
project pipeline aligned with the key focus areas, linked to sectoral value chains and BBBEE
transformation charters, opportunity and needs based, identifying criteria and partners,
structuring alliances, using tested models or develop it where it does not exist,
benchmarking, agreeing on an exit strategy and incorporating monitoring and evaluation.
The DBSA intends to rollout a coaching programme for interested staff and for the project
beneficiaries. The intention is to start learning from pilot initiatives, of which the current
nature reserve initiative is one.
2 . Dr. Ingrid Vervey. 2011. Enterprise development unpacked: A tool for prosperity.
3 . Raizcorp, 2010. Enterprise Development Made Easy. www.raizcorp.co.za
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2.3
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Tourism and Local Economic Development (LED)
The DBSA recognises the role that tourism can play in addressing the challenges of
unemployment and poverty in South Africa and the importance of making the correct land
choices in order to promote tourism. This means that responsible land disposable processes
need to be embarked upon by municipalities and other state entities which are promoting
tourism by using state land. Local Economic Development (LED) models and Land Use
Management Strategies (LUMS) need to be cognisant of the effect of land use choices on
the tourism industry.
Tourism’s many proponents, including the United Nations World Tourism Organisation
(UNWTO), see tourism as potentially a model contributor to sustainable development.
Whereas tourism per definition ‘comprises the activities of persons travelling to and staying in
places outside their usual environment for not more than one consecutive year for leisure,
business and other purposes’ (United Nation’s World Tourism Organisation). Ecotourism is a
particular form of tourism based in natural areas that includes benefits for communities and
the conservation of ecosystems. Responsible tourism is a broader concept that describes
tourism operations that take a triple-bottom line view (which includes not only considerations
of the economy, but also society and the environment), and that can also occur outside
natural areas. Both ecotourism and responsible tourism can be viewed as forms of
sustainable tourism. They are often put forward as the most suitable forms of tourism for
sustainable resource use and beneficiation4.
In terms of legal and regulatory ‘governance’, South Africa’s relatively robust policies around
land restitution, labour rights, Broad-based Black Economic Empowerment (BBBEE),
amongst others, afford it a strong framework for equitable development of tourism. On the
environmental front, the country’s National Environmental Management Act (No. 107 of
1998) and recently adopted National Framework for Sustainable Development (2006) are
also progressive pieces of work. These policies clearly articulate environmental limits to
development choices.
It is well recognised that tourism can be a strong driver of LED: responsible tourism
developments are able to create many jobs and other spin offs in the local community,
including supplier development and demand for other tourism products in the destination.
Tourism can also help ‘brand’ an area – and improve its attractiveness to tourists, investors
and the like. When tourists visit a destination, they spend money not only on
accommodation, restaurants, and activities, but in shops and petrol stations and on other
service industries (such as banks, transport services, etc). With an increased local rates
base brought by tourism enterprise growth and its effects, demands are increasingly placed
on local government to respond to service delivery. This can have the effect of speeding up
service delivery for the poor. So tourism’s potential to uplift spaces is significant.
Conversely, linked to this is ‘gentrification’, a common effect of a successful tourism
destination strategy is the appreciation of property values, which can put land and buildings
increasingly out of the reach of the landless poor in the area. So although more jobs might
have been created, and a more robust local economy stimulated, and perhaps even service
delivery enhanced, tourism can still have negative (albeit it indirect) impacts on the poor, who
often may remain marginalised from procuring assets such as land. This is not unique to
tourism. As land becomes more attractive to developers, it is they who end up deciding the
4 . Rivett-Carnac, K. 2009. Local economic development, tourism and land choices. Development
Planning Division Working Paper Series No. 4, DBSA: Midrand.
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most appropriate form of land use. Local government’s role here should be setting up and
implementing an appropriate land use framework. This then facilitates the actual approval of
zoning, as well as attachment of conditions to development plans in line with the framework,
to guide decisions. (Rivett-Carnac, 2009: 7)
The political prioritisation of tourism should not lead to ill-conceived development choices
that result in the further marginalisation of the poor, which is likely if we continue to conflate
lifestyle housing estates with tourism and give access to prime land to affluent property
developers, rather than provide opportunities to the rural poor who often live alongside these
land parcels with tourism potential.
The ANC’s recent resolution on rural development, land reform and agrarian change (ANC,
2007) at Polokwane resolves to:
“Build stronger state capacity and devote greater resources to the challenges of rural
development, land reform and agrarian change. In particular to ensure that the state
regulates the land market effectively with a view to promoting the goals of rural
development and agrarian change, limiting the unsustainable use of land for elite
purposes (such as the conversion of prime agricultural land to golf estates) and
ensuring that land remains predominantly in the hands of South African residents.”5
Access to land will remain a burning issue in South Africa. We must ensure that our land use
choices benefit the poor by placing the poor at the centre of the development agenda.
Responsible tourism can contribute to this agenda. It should be prioritised and planned as
part and parcel of a LED strategy which is underpinned by wise land use choices and
informed by the objective of building sustainable communities.
2.4
Sustainable Development and the DBSA
The Development Bank of Southern Africa (DBSA) is adopting a new approach towards it’s
role as a DFI, which is aimed at enhancing the manner in which it engages the market and
delivers products and services to municipalities in a coordinated and effective manner. At
the heart of this thinking is the need to continue their objective to build sound municipalities,
and to enhance their role and mandate towards initiating and delivering on integrated
development and sustainable communities.
The central definition of sustainable development is inevitably the famous quote from ‘Our
Common Future’ (otherwise known as the Brundtland Report) that defined sustainable
development as:
“…development that meets the needs of the present without compromising the ability of
future generations to meet their own needs.” (World Commission on Environment and
Development, 1987: 43)
Although the history of the concept of sustainability is a complex story, there are only two
rather simple drivers at work here. The first is the global recognition first recorded in the
bestselling Club of Rome report that the achievement of modernity in the developed world
has been made possible by the establishment of economic systems that depend heavily on
natural resources that are running out and on the disposal of wastes into natural systems at
5 . African National Congress, 2007. Resolution on Rural Development, Land Reform and Agrarian
Change. ANC 52nd National Conference. December 2007. Polokwane.
http://www.anc.org.za/ancdocs/history/conf/conference52
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a rate that is greater than the capacity of those systems to absorb these wastes (Meadows,
1972). Unsurprisingly, it was agreed that if nothing is done, modernity would come to an end;
the only debate was how long this would take.
Although the commonly applied definition of Sustainable Development is generally the above
quoted definition that emerged out of the Brundtland Commission document, “Our Common
Future”, it is important to investigate the supporting elements of the overarching approaches
to Sustainable Development. This approach entails understanding the various pillars of
Sustainable Development and trying to understand the interdependence of these aspects.
These aspects include the following:

Social Sustainability

Environmental Sustainability

Economic Sustainability, and

Meeting Human Needs Fairly
An underlying philosophy (partnership principle) states that “All systems that are sufficiently
unique and irreplaceable have an equal right to present and future existence and
development”
A sustainable community is one that meets the needs of the present without compromising
the ability of future generations to meet their own needs. It is a place where people live,
work, and prosper in a vibrant community of communities. In such a community sustainability
is achieved through community participation and the reconciliation of short and long term
social, economic and ecological well-being.
One of the key drivers of sustainable communities are the capacity of the leadership of the
communities to engage in the concepts of sustainability, and to drives these concepts
forward and, working with the communities, to design a way of life that truly exemplifies the
concepts held within the South African Constitution and that all (both human and natural)
enjoy the livelihoods that they are entitled to in a fair and equitable manner.
Conclusion – DBSA Requirements
2.5
From this cursory examination of the DBSA policy documents, we are able to draw the
following conclusions regarding the requirements to be met for a funding and partnership
application of this nature:
1.
Financial viability needs to be demonstrated, together with compliance with standard
credit risk criteria;
2.
Environmental compliance and a satisfactory Environmental Management Plan (EMP);
3.
Enterprise Development (ED) potential needs to be fostered to support SMME’s;
4.
Tourism enhancement and the creation of direct, indirect and induced economic
impacts and employment opportunities needs to be promoted; and
5.
Sustainable community development needs to be practised in a manner that meets the
needs of the present without compromising the ability of future generations to meet their
own
needs.
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THE REQUEST FOR PROPOSALS (RFP)
[The following text to be inserted into the current RFP document (at point __)]
The purpose of this Request For Proposals (RFP) is to invite interested parties in
collaboration with the Development Bank of Southern Africa (Applicants) to submit proposals
for the development of the Van Stadens Wild Flower Reserve, in exchange for which
development the successful Applicant will be granted a long term lease of the properties
constituting the Reserve to enable it to use, manage and control the existing facilities situate
on the properties and the facilities to be established on the properties in terms of the
envisaged lease for its own account.
To encourage and ensure the involvement of the local community in the envisaged project,
the NMBM has engaged in discussions with the Development Bank of Southern Africa
(DBSA) who are willing to contribute towards the funding of the envisaged development upon
certain terms and conditions which, inter alia, entail that any development in relation to the
properties and concomitant lease thereof shall be undertaken under a Joint Venture between
the interested party and the DBSA (or nominee) with the DBSA (or nominee), holding a
minimum of 30% equity ownership in the Joint Venture vehicle.
The Applicant Joint Venture vehicle is also to have representation from the local community
in the form of a cooperative or community trust which is to hold 26% equity (what is the
relation between this and the 30% above) in the Joint Venture vehicle. This RFP is
specifically to formulate the terms and conditions of the proposal that the community vehicle
needs to prepare in order to participate in the selection process, together with the private
sector tourism operator, to respond to this RFP.
It is accordingly a prerequisite that any interested party intending to respond to this RFP shall
have concluded a Joint Venture agreement with the DBSA and the community entity, and
that the Joint Venture vehicle in question responds to this RFP as Applicant. No, this is
wrong. Please consider the following: Any interested party intending to respond to this RFP
shall conclude a JV (if successfully awarded the tender) with DBSA (depending on the
business plan being approved by DBSA) and the community entity (as sourced through the
procurement system of the Municipality).
3.1
Purpose and Background (This has been done and completed and is awaiting the
big tender)
The Public Health Directorate of the Nelson Mandela bay Municipality (The NMBM) requests
an expression of interest (EOI) from community groups or entities (for example; community
trusts, cooperatives, other companies or joint ventures between community trusts,
cooperatives or other companies) to participate in eco-tourism developments within specific
NMBM nature reserves.
The Nelson Mandela Bay Metropolitan Municipality comprises 195,412 hectare (1,954 km²),
of which approximately 8,500 hectare is formally protected, representing many of the rare
and threatened habitats within the area. A large percentage of this area is currently being
managed by the Nelson Mandela Bay Municipality (NMBM) by means of these nature
reserves.
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Surrounding several of these reserves are rural communities living in poverty. The Public
Health Directorate has identified an opportunity for using this biodiversity economy to create
potential avenues for economic development in these communities.
Plans for upgrading and developing a number of reserves, specifically Settlers Park
(including Dodds Farm, Victoria Park and St Georges Park), Maitlands, Van Stadens, Van
der Kemps Kloof and Springs Nature Reserves, are currently underway. With the right
development, these reserves have the potential to attract increased tourism to the
surrounding areas and improve socio-economic conditions for the communities in close
proximity.
The Executive Mayoral Committee approved the development of the NMBM’s nature
reserves on the 26th March 2008 (19/3/1/1/1)(Agenda p17)(Min No. 23/2008). Plans for
upgrading and developing a number of reserves are currently underway. With the right
development and operators, these reserves have the potential to attract increased tourists to
these areas.
3.2
The Scope Of Work
In line with the above Executive Mayoral Committee resolution, the NMBM requests an
expression of interest from interested parties to operate the Van Stadens nature reserve.
The nature reserve needs to be developed through a collaborative venture comprising the
Municipality, private developers (with experience in the Ecotourism Sector), the community
and South African Development Agencies, which could include the DBSA, the IDC and the
ECDC.
The specific requirements are dealt with in more detail in the following sections, but comprise
of:1.
The eco-tourism operator (private sector),
2.
The community partner to the operator,
3.
The eco-tourism operating model and project viability,
4.
The minimum criteria for the proposal document – Executive Summary.
3.2.1
The Eco-Tourism Operator
The nature reserves are to be developed and operated by a private sector operator who can
demonstrate that they have the requisite skills, experience and financial resources to
successfully undertake an operation of this nature ………….
[From Joram - EPH Advert]
The proposals must explicitly demonstrate that:
a.
The relevant entity has been registered and that a certified copy of the
founding document and proof of registration is submitted.
b.
Proof of previous involvement in similar environmental projects (for example,
waste, environmental education, environmental management, conservation, pollution
control, ecotourism, community development etc.) preferably within Nelson Mandela
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Bay. Proof of experience and previous involvement in any of the above issues by
relevant individuals must be included.
c.
An indication of the representivity of the community that the entity purports to
represent.
3.2.2
The Community Partner to the Operator
Introduction ….
The community partners should be in close proximity to the nature reserves to ensure that
the required accountability and responsibility is assumed by the correct people who
understand the environmental and socio-economic issues of the area. The following are the
proposed maximum distances from the identified locations:

Settlers Park, Dodds Farm, St Georges Park and Victoria Park 5 km

Maitlands Nature Reserve

Van Stadens Wild Flower Reserve

Springs Nature Reserve

Van der Kemps Kloof Nature Reserve
7 km
2 km
15 km
2 km
More detail and specifications……….
3.2.3
The Eco-tourism Operating Model and Project Viability
There are two ways to approach this section: 1. We could simply allow the applicant to
provide his eco-tourism operating model, and alert him to the fact that it is worth 20% being
the of the score in the functionality section, or 2. We could pose a list of questions which we
would require them to address. The questions could be as provided below:

What are the current facilities operated by the applicant consortium (Other tan the
nature reserve in question)?

What would best describe the operating model that is employed?

What operating model is proposed to be used for the current nature reserve?

What and who would be deemed to be the target market?

Who and what would you deem to be your primary competitors?

What would be the primary goods and services offered to patrons?

What would your product pricing structure be?

What is the market pricing structure?

What facilities would you use in order to implement your operating model (i.e. the
current NMBM facilities or would you upgrade these or construct new facilities)


What would your capital budget be for upgrading the existing facilities?
What would your capital budget be for the construction of new facilities, together
with the timing for these?
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
R.I.C.
Please complete the template provided as Appendix 1 hereafter for your budgeted
income statement for the first five years of trading. This template is provided as an
example and minimum requirement. A more detailed budget with tourist numbers and
tariffs can also be provided.
3.3
The Minimum Criteria For The Proposal Document
Together with the operating model information provided above, the following sections would
provide the functionality detail that will be used to score the applicant proposal in terms of
Appendix 4.2.
3.3.1
Executive Summary
The Executive Summary section of the proposal shall disclose the legal identity of the
Applicant and summarise the key aspects of the Applicant’s proposal, which section shall be
limited to approximately 20 pages.
The Executive Summary shall include the following sub-sections:
1. Project Team
Identification of the key parties in the Applicants project team (Applicant, developer,
operator, financier, professional team etcetera.) supported by CIPRO Certificates (in
the instance of Companies or Close Corporations) or Trust Deeds and Letters of
Authority (in the instances of Trusts) and certificates issued by the parties auditors
confirming ownership of the issued share capital or members interest of the parties,
where applicable.
The details of the Community Partners need to form a part of this section, including the
total Applicant BEE status.
2. Summary of Development Concept
Outline of site features, design concept and development schedule and any other key
features of the project proposal which will indicate the operating concept.
3. Financial Returns
Summary of estimated financial returns to the Applicant and the NMBM. These would
need to be based upon accepted commercial evaluation criteria. Debt and equity
scenarios need to be included, specifically the DBSA funded component.
4. Project Viability
Summary of the project funding and cash-flow,
Summary of the estimated financial returns to the applicant from the nature reserve
over a ten year period,
Summary of the key market demand assumptions (size, frequency of use,
segmentation) used in the financial projections.
5. Development and Operating Experience
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Summary of the qualifications, experience and ability of the Applicant to successfully
manage a development of this nature.
6. Quality and Development Impacts
Highlights of the key features of the nature reserve development and the impact of the
development on the surrounding environment and society. This would specifically
include an environmental scoping report to highlight potential environmental impacts
and measures of mitigation.
7. Benefits to the Economy
Summary of the key benefits (other than direct financial benefits) to the economy and
to the citizens of the NMBM and immediate region.
8. Land Rental
The value of the proposed development and the rental offered to the NMBM in respect
of the nature reserve.
This Executive Summary needs to be accompanied by any relevant maps, drawings or
architectural sketches which may assist in conveying the overall business concept to the
adjudication panel. These drawings are to be no larger than A3.
Any other additional information such as market surveys, demographic studies, competitor
analysis etc can form addendum to the Executive Summary if it is deemed to add weight to
the proposal in any meaningful fashion.
3.3.2
Architectural Requirements
Bring through from the main document? Or leave this out?
3.3.3
The DBSA Funding Criteria
The joint venture together? Joint compliance?
Input required from DBSA personnel – who?
3.3.4
The Financial Offer to the NMBM
The envisaged lease shall consist of, inter alia, three phases, the first phase being for a
period of one year from the date of conclusion thereof within which period the Applicant shall
be obliged to acquire such consents, permissions or approvals as may be statutorily and/or
otherwise required to undertake the development upon the properties. Phase two shall be
for a period of two years commencing after phase one within which period the Applicant shall
be obliged to undertake and complete its proposed development of the properties and phase
three shall commence thereafter and endure for a period of thirty (30) years.
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The rental proposal to the NMBM shall be upon the following terms:
1.
The projected rental shall be calculated as a percentage of the projected turnover
for the operator in each of the three rental periods paid directly to MBDA (pending
approval by the Board) ;
2.
Any turnover in excess of the projected turnover shall result in additional rental
being paid to the NMBM according to the percentage stipulated;
3.
Any turnover which is less than that projected shall still result in the offered
projected rental being paid to the NMBM.
The applicant needs to complete the following table which will then constitute the financial
offer by the applicant to the NMBM.
Table 2:
Year
Year 1
Year 2 and 3
Year 4 to 30
NMBM Rental Proposal Form
Projected Gross
Turnover Per Year
R
R
R
Rental as a Percentage
of Turnover
%
%
%
Projected Rental
R
R
R
Note: This section of the proposal needs to be placed in a separate envelope as per the
process stipulated in the Evaluation and Adjudication Process hereafter.
3.4
Evaluation and Adjudication Process
A two stage evaluation process will be undertaken:
1.
Firstly each proposal shall be evaluated in terms of the Functionality Criteria Score
Sheet appended hereto and marked “Appendix A” to measure the expected quality,
reliability, viability, sustainability and durability of the expected service so as to minimise
any risk to the NMBM and only those proposals meeting a minimum threshold of 80
points out of 100 (80%) will be carried forward for further evaluation.
2.
Secondly, those proposals meeting the requirement reflected above shall thereafter
be evaluated on a 90/10 basis, the 90 points being in respect of price and the 10 points
being in respect of preference points as stipulated in the in the NMBMs Supply Chain
Management Policy.
3.
Applicants must accordingly complete Appendix A
documentation supporting each answer shall be provided.
3.4.1
and
where
applicable,
Functionality Criteria Score Sheet
Hereafter as Appendix 4.2
Explanation of the weighting used,
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3.4.2
R.I.C.
Additional Documents Required
3.4.2.1 Proposals signed by an agent or representative
3.4.2.2 Proposals submitted by an individual shall be accompanied by certified
copies of:
3.4.2.3 Proposals submitted by a Company shall be accompanied by certified copies
of:
3.4.2.4 Proposals submitted by a Close Corporation shall be accompanied by
certified copies of:
3.4.2.5 Proposals submitted by a Trust shall be accompanied by certified copies of:
3.4.2.6 Proposals submitted by a Joint Venture or Consortium shall be accompanied
by certified copies of:
3.4.3
Sworn Statements
3.4.4
Black Economic Empowerment (BEE) Status
Check above!!!!
Appendix 2
and
Appendix 3 hereafter
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3.5
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The Timeframes for the Process
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4
APPENDIX
4.1
Budgeted Income Statement
R.I.C.
PROPOSAL FOR THE OPERATION OF A NMBM NATURE RESERVE
BUDGETED INCOME STATEMENT
Year 1
Amount
Turnover / Revenue
- Accommodation
- Food and Beverage
- Gate Takings
- Tours / Educational
- Other Revenue
- Grants / Donations
Cost of Sales
- Cost of Goods Sold
- Sub-contractors / Outsourced Services
Gross Profit
Operating Expenses
- Accounting
- Advertising / Marketing
- Bank Charges
- Consumables
- Depreciation
- Insurance
- Interest expense - Overdraft
- Motor Vehicle expenses
- Maintenance expenses
- Printing & Stationery
- Telephone and postage
- Rental - Office & Equipment
- Rental - NMBM Concession
- Salaries & Wages
- Employee Benefits
- Utilities (Electricity & Water)
- Sundry expenses
- Other expenses
Earnings Before Interest & Tax
Interest Expense - Loans
Earnings Before Taxation
Taxation
Earnings After Tax
Capital Amortisation - Loans
Add: Depreciation
Trading Result
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Complete for Years 2 to 5
% of
Turnover
100%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
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Amount
% of
Turnover
100%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
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NMBM ECO-TOURISM – NATURE RESERVE RFP
4.2
Functionality Criteria Score Sheet
CRITERIA
1
R.I.C.
Eco-tourism operating experience:
Potential
Score
15
Applicant
Score
The Applicant has more than five (5) year’s experience in
operating an ecotourism facility or establishment.
The name(s) of traceable references to be supplied.
2
Market Assessment: Experience and appropriate skills:
10
3
Project conceptualisation: Experience and appropriate skills:
15
4
Operating model:
20
5
Community Partners:
20
6
General Considerations:
20
TOTAL SCORE
100
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4.3
R.I.C.
Affidavit – Historically Disadvantaged Individuals – HDI Status
“Anexure B”
AFFIDAVIT
I, the undersigned,
________________________________________________________________________
Identity Number: __________________________________________________________
do hereby make oath and state that:
1.
I am the Applicant in respect of the attached submission.
2.
I am a South African citizen and a copy of my Identity Document is attached hereto.
3.
I am socially and economically disadvantaged by the legacy of the South African Political Dispensation
prior to 1993 in that I had no franchise in national elections prior to the introduction of the Constitution of
the Republic of South Africa, 1983 or the Constitution of the Republic of South Africa, 1993 (the interim
constitution).
4.
I obtained South African Citizenship after the coming into effect of the 1993 interim constitution of the
Republic of South Africa.
5.
I am (delete if not applicable):
5.1
A female
5.2
And will be between the age of 18 and 35 at the date
stipulated for the closing of the proposal call.
5.3
Disabled (stipulate nature of disability on separate
annexure).
5.4
Domiciled within the area of jurisdiction of the NMBMM and
shall be so domiciled at the date of closing of the proposal
call.
6.
I am not aware of any actual or likely conflict of interest which I may have in respect of the transaction for
which this submission is submitted. (Delete if not applicable and furnish details of such conflict of
interest)
7.
My SARS Income Tax Reference Number is __________________________________.
8.
My SARS VAT Registration Number is _______________________________________.
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9.
R.I.C.
I have no outstanding tax obligations or I have made arrangements to meet my outstanding tax
obligations to the South African Revenue Services and a certificate of the South African Revenue
Services is attached hereto in this regard.
10.
I have not been convicted for fraud or corruption within a 5 (five) year period prior to submission of this
response.
11.
I am / am not (delete whichever is not applicable) engaged in any Government or Local Government
contract awarded within 5 (five) years prior to submission of this response.
12.
I am / am not (delete whichever is not applicable) in arrears in respect of any charges payable in terms
of Section 118 of the Municipal Systems Act. (If in arrears, a copy of a document evidencing satisfactory
arrangements made with the NMBMM is to be annexed).
13.
I acknowledge that should any information attested to herein be false, such false statement shall render
my submission null and void and entitle the NMBMM to terminate any agreement to which this
submission relates.
________________________________________
DEPONENT
I CERTIFY that the Deponent has acknowledged that he/she knows and understands the contents of this Affidavit
which was signed and sworn to before me at PORT ELIZABETH this ________ day of ____________ 20______.
__________________
COMMISSIONER OF OATHS
NOTE: ANY SWORN STATEMENT WHICH IS NOT APPLICABLE IS TO BE DELETED.
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4.4
R.I.C.
Affidavit and Tax Clearance Certificate Recordal
“Annexure C”
AFFIDAVIT
I, the undersigned,
_________________________________________________________________________________
Identity Number:
_________________________________________________________________________________
do hereby make oath and state that:
a.
I am a duly authorized representative of:
______________________________________________________________ Limited
Registration No.
/
/06
b.
I am a duly authorized representative of:
_______________________________________________________________ (Pty) Limited
Registration No.
/
/07
c.
I am a duly authorized representative of:
_____________________________________________________________ Close Corporation
Registration No. CK
/
/23
d.
I am a duly authorized representative of:
________________________________________________________________ Trust
Registration No.: IT
the Applicant in respect of the attached submission.
1.
The information reflected in the documentation submitted on behalf of the Applicant in
accordance with the EOI is true and correct.
2.
The percentage Equity Ownership in the Applicant held by Historically Disadvantaged
Individuals, woman and/or persons suffering from a disability is:
3.
2.1
____________ % by HDI’s
2.2
____________ % by Woman
2.3
____________ % by persons suffering from a disability
The Applicant’s registered office is
__________________________________________________________________________
__________________________________________________________________________.
4.
The Applicant’s principal place of business is
__________________________________________________________________________.
5.
The Applicant has no actual or likely conflict of interest in respect of the transaction for which
this submission is submitted. (delete if not applicable and furnish details of such conflict of
interest)
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6.
R.I.C.
The Applicant’s SARS Income Tax Reference Number is:
______________________________________.
7.
The Applicant’s SARS VAT Registration Number is:
______________________________________.
8.
The Applicant has no outstanding tax obligations or the Applicant has made arrangements to
meet its outstanding tax obligations to the South African Revenue Services and a certificate of
the South African Revenue Services is attached hereto in this regard.
9.
The Applicant and/or its officials have not been convicted for fraud or corruption within a 5
(five) year period prior to submission of this response.
10.
The Applicant is / is not (delete whichever is not applicable) engaged in any Government or
Local Government contract awarded within 5 (five) years prior to submission of this response.
11.
The Applicant is / is not (delete whichever is not applicable) in arrears in respect of any
charges payable in terms of Section 118 of the Municipal Systems Act. (If in arrears, a copy
of a document evidencing satisfactory arrangements made with the NMBMM is to be
annexed)
12.
The Applicant acknowledges that should any information attested to herein be false, such
false statement shall render the Applicant’s submission null and void and entitle the NMBMM
to terminate any agreement to which this submission relates.
____________________________________
DEPONENT
I CERTIFY that the Deponent has acknowledged that he/she knows and understands the contents of
this Affidavit which was signed and sworn to before me at PORT ELIZABETH this ________ day of
____________ 20______.
__________________________________
COMMISSIONER OF OATHS
NOTE: ANY SWORN STATEMENT WHICH IS NOT APPLICABLE IS TO BE DELETED.
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