Chapter One of this thesis introduced the Umhlosinga Development Agency as a response to the economic challenges which exist in Umkhanyakude District, a predominantly rural district municipality with unemployment rates that are above 40% (Umhlosinga Development Agency 2013/2014; StatsSA, 2011). The development agency is registered as a municipal entity, owned
56
by the district municipality and it serves this predominantly rural district and region (Industrial Development Corporation, 2011). The development agency has the nature of self-development in that it aims to take advantage of existing resources (Crowe, 2007; Dario, et al, 2000) and UMDA is no different, even from the decision to establish it in the district where careful consideration of the local advantages were considered, therefore, all of its projects focus on taking advantage of the available resources in order to realise its full economic potential source (IDC, 2011;
Respondent 4, 28/09/2015). This section presents an overview of the agency and the sectors that exist in its operation as a mechanism for LED. The consideration of UMDA will draw on the policy prescription of its role as a participatory mechanism, obtained from the Integrated Development Plan of the district, the associated LED strategy and guides from the Agency itself.
It is imperative to provide a structural description of the agency in order to understand its functionality within Umkhanyakude District Municipality. Below, therefore, is the organogram of the agency, which presents the structure of the agency. The board can be seen as the main head of the agency. The board is required for all executive decisions, followed by the CEO, under which exists the COO and CFO under these operates the projects and sectors of the agency (Umhlosinga Development Agency, 2013/2014; COGTA, 2013). The Umhlosinga Development Agency’s structure is one typical of development agency, as it is headed by a board of directors to whom the CEO reports. The CEO is supported by a PA, the CEO’s duties are to promote and market the district as an investment destination, together with the board secure funding for projects and initiatives. Directly under the CEO are the CFO, who oversees the finance and general human resource, and the COO, under whom report the sector managers. The sector managers are divided in task according to tourism, permaculture or agribusiness, airport and business support centre manager (the sectors will be discussed in detail under the roles and functions of the agency. It is further important to note that it is only the tourism and agribusiness sections that have interns and additional staff outside of the managers (Umhlosinga Development Agency, 2013/2014).
57
Figure 4.1: Organogram of Umhlosinga Development Agency.
Source: Umhlosinga Development Agency Annual Report 2013/2014, p18.
The agency is required to be working across a number of economic sectors (industry, agribusiness, tourism, aviation and property development) through a host of different projects (Umhlosinga Development Agency, 2014/2015; Umhlosinga Development Agency, n.d).
Currently, though, it is only the aviation and the industry projects that are in fact at the implementation phases. This is due to the fact that between 2008 and 2013 the agency did not have a documented strategy of the phases that projects ought to go through. Since 2013 this procedure has been put in place and is now called the project and programme cycle approach (KZN-COGTA & SALGA, n.d). One of the respondents from the Umhlosinga Agency articulated this issue in the following manner:
“The projects before had no system until we adopted our strategy in 2013 May which we as officials go through a concept, look at projects for a whole year or 6 months but the CEO prefer 3 months but it can take longer. Where we look what is the project about say, agribusiness; what is that? What is it about? Then from that concept we do business proposals and look for funding, business plan. Then the project enters feasibility, feasibility study then enters accumulating land if needs be, then to business plans, then to
58
EIA and any studies that needs to be done, then from that study to business plan. Where you now are certain that what it is that you want to and only then it goes to investment promotion then to funding.” (Respondent 4, 28/09/2015)
The above quote lists the phases of the project cycle as per the understanding of an UMDA employee. The project cycle is further demonstrated below in figure 4.2 which depicts this six phase cycle, namely: conception, feasibility study, business plan phase, EIA and additional studies, investment promotion and lastly funding. The conception phase is one where a potential project is identified and a concept is developed. The second phase involves a feasibility study, where research is done to assess whether the project can be viable (Gasa, n.d; KZN- COGTA&SALGA, n.d). Once it is established that the project is feasible then the projects are marketed and packaged as investment projects and programmes, as summarised in the table below. However, it is important to note that this system came into operation with the Strategy adopted in May 2013 (Respondent 4, 28/09/2015). The agency only began to implement the cycle in 2014, as it was adopted in the previous financial year, which already had plans in motion (Respondent 4, 28/09/2015).
Figure 4.2: The Project Cycle in a LEDA Source: KZN-COGTA&SALGA (n.d)
59
The current state of projects of Umhlosinga is post-conceptualisation, and therefore a consensus exists that the projects work, and the agency is now sourcing funding for feasibility studies for the projects. However, the aviation or airport project is fortunately underway, and “…is being developed not as a transport mode only, but rather a product of tourism in the region. The airport is a vital part of the transformation process of the regional economy not only on the tourism front, but the economy in general” and the R10 Million for the project has grown to be over a half a billion project (Umhlosinga Development Agency, n.d; Umhlosinga Development Agency, 2013/2014).
Further to the airport project, the Jozini Hydro-dam project, housed in the agency within the sector for Industry, is another project at a more mature phase compared to other projects.
Currently, the dam project is the most mature project plan and is almost ready to be packaged as a tendering project. The project is one of the earliest in the agency, initiated in 2008, and requiring a few licences (water and generation) as it was said to be viable four years ago. This project has thus completed the feasibility study phase and the agency is currently looking for an implementation company that will take over. The main challenge with the project has been getting funding for it, in order to begin implementation (Respondent Four, 28/09/2015).
Therefore the projects designed to lift the economy of the district are, focusing on those industries found to have the most potential, and the agency is steadfast on these projects.
Thereby taking the load off local government to implement and investigate the potential of catalytic projects. The next section presents the structure and function of UMDA as a development agency.