Rand International Capitalweb.nelsonmandelabay.gov.za/datarepository/documents... · Web viewNMBM ECO-TOURISM – NATURE RESERVE RFP NMBM Eco-Tourism (17.05.11) © RIC - Create Date:

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 2011Prepared by:

RAND INTERNATIONAL CAPITAL

‘Development Financeand Economics’

[email protected]

R.I.C.

NMBM ECO-TOURISM – NATURE RESERVE RFP

TABLE OF CONTENTS

1 OVERVIEW OF THE REQUIREMENT.......................................................................3

1.1 Background............................................................................................................................. 31.2 The Terms of Reference and Methodology Adopted...............................................................3

2 THE MINIMUM REQUIREMENTS FOR FINANCING - DBSA...................................3

2.1 Environmental Guidelines for the DBSA..................................................................................32.2 Enterprise Development and the DBSA..................................................................................32.3 Tourism and Local Economic Development (LED)..................................................................32.4 Sustainable Development and the DBSA................................................................................32.5 Conclusion – DBSA Requirements..........................................................................................3

3 THE REQUEST FOR PROPOSALS (RFP)................................................................3

3.1 Purpose and Background........................................................................................................33.2 The Scope Of Work................................................................................................................. 3

3.2.1 The Eco-Tourism Operator........................................................................................33.2.2 The Community Partner to the Operator....................................................................33.2.3 The Eco-tourism Operating Model and Project Viability.............................................3

3.3 The Minimum Criteria For The Proposal Document................................................................33.3.1 Executive Summary...................................................................................................33.3.2 Architectural Requirements........................................................................................33.3.3 The DBSA Funding Criteria.......................................................................................33.3.4 The Financial Offer to the NMBM...............................................................................3

3.4 Evaluation and Adjudication Process......................................................................................33.4.1 Functionality Criteria Score Sheet..............................................................................33.4.2 Additional Documents Required.................................................................................33.4.3 Sworn Statements......................................................................................................33.4.4 Black Economic Empowerment (BEE) Status............................................................3

3.5 The Timeframes for the Process.............................................................................................3

4 APPENDIX..................................................................................................................3

4.1 Budgeted Income Statement...................................................................................................34.2 Functionality Criteria Score Sheet...........................................................................................34.3 Affidavit – Historically Disadvantaged Individuals – HDI Status...............................................34.4 Affidavit and Tax Clearance Certificate Recordal....................................................................3

LIST OF TABLES

Table 1: DBSA Environmental Project Report Structure.................................................................3Table 2: NMBM Rental Proposal Form...........................................................................................3

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1 OVERVIEW OF THE REQUIREMENT1.1 Background

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.



1.2 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. Evaluate the existing situation and work completed for the proposal;2. Prepare ‘Minimum Requirements for Proposal Document’;3. Establish the DBSA Funding Criteria and Minimum Requirements, and4. 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.



2 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:



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 be submitted to the DBSA project manager, in writing, according to the format outlined in the

1 . Development Planning Division. 2009. Guidelines for environmental appraisal at the DBSA. Technical Document Series No. 1, DBSA: Midrand.



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: DBSA Environmental Project Report Structure

Report Section Description Of The Requirement

Project title, project number, borrower and implementing agent

At the beginning of the report.Clear identification of the project and borrower.

Purpose of the report A statement that the report documents the results of the environmental appraisal of the project

Project overview An overview of the project, identifying:Issues to be considered in the appraisal.The need for the project.Any alternatives.

Appraisal methodology 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.

Environmental assessment process

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.

Legislative and regulatory issues

Any project-related legislative or regulatory issues and their status, e.g. EIA requirements or water permits.

Institutional capacity for environmental management

An assessment of the institutional capacity of the borrower for environmental management (high, medium or low).Proposals on the need for technical assistance.

Environmental risk assessment

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.

Developmental impact The environmental benefits, in terms of the environmental sustainability of the project (if any).A recommendation on possible environmental indicators for the project.

Credit lines For relevant projects:A statement that the project is allocated to a specific credit line. The environmental conditionality and how this has been met.

Monitoring requirements

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.

Conditions for inclusion in the loan agreement

Suspensive or further terms and conditions.

Conclusion A summary of the results of the environmental risk assessment.Key issues that emerge from the appraisal process.Any environment-related project issues.

References Any documentation used.Personal communications referred to in the report.



Report Section Description Of The Requirement

Appendix 1 Summary table on environmental risk assessment. Appendix 2 Recommended contents for the consolidated appraisal report.

2.2 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 10-step 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



2.3 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.



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 a rate that is greater than the capacity of those systems to absorb these wastes (Meadows,

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



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.

2.5 Conclusion – DBSA Requirements

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.



6.

3 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.



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 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 7 km

Van Stadens Wild Flower Reserve 2 km

Springs Nature Reserve 15 km

Van der Kemps Kloof Nature Reserve 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?



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



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.



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: NMBM Rental Proposal Form

Year Projected Gross Turnover Per Year

Rental as a Percentage of Turnover

Projected Rental

Year 1 R % RYear 2 and 3 R % RYear 4 to 30 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 and where applicable, documentation supporting each answer shall be provided.

3.4.1 Functionality Criteria Score Sheet

Hereafter as Appendix 4.2

Explanation of the weighting used,



3.4.2 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



3.5 The Timeframes for the Process



4 APPENDIX4.1 Budgeted Income Statement


Amount % of Turnover Amount % of

TurnoverTurnover / Revenue 100% 100% - 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 % %

Year 1 Complete for Years 2 to 5

BUDGETED INCOME STATEMENT

PROPOSAL FOR THE OPERATION OF A NMBM NATURE RESERVE


4.2 Functionality Criteria Score Sheet

CRITERIA Potential Score

Applicant Score

1 Eco-tourism operating experience:

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.

15

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



4.3 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 _______________________________________.



9. 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.



4.4 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:

______________________________________________________________ LimitedRegistration No. / /06

b. I am a duly authorized representative of:

_______________________________________________________________ (Pty) LimitedRegistration No. / /07

c. I am a duly authorized representative of:

_____________________________________________________________ Close CorporationRegistration No. CK / /23

d. I am a duly authorized representative of:

________________________________________________________________ TrustRegistration 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:

2.1 ____________ % by HDI’s

2.2 ____________ % by Woman

2.3 ____________ % by persons suffering from a disability

3. 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)

6. 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.


