Oceans Economy: National Department of Tourism briefing

Tourism

31 October 2018
Chairperson: Mr P Adams (ANC) (Acting)
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Meeting Summary

The National Department of Tourism (NDT) briefed the Committee on the Oceans Economy.

The Department reported that Cabinet had approved the Coastal and Marine Tourism (CMT) Implementation Plan on 16 August 2017. The idea was for SA to become a world class coastal and marine tourism destination. The CMT Implementation Plan was being implemented in a nodal/cluster approach. The identified nodes/clusters for the first phase (0-5 years) covered Durban and surrounds (KwaZulu-Natal); Umkhanyakude including Umhlabuyalingana and surrounds (KwaZulu-Natal); Port St Johns to Coffee Bay (Eastern Cape); East London, Port Elizabeth and surrounds (Eastern Cape); Cape Town and surrounds (Western Cape) and finally West Coast and surrounds (Northern Cape). Additionally, a set of cross cutting initiatives would be implemented across the nodes. The Committee was provided with a comprehensive overview of initiatives and opportunities in the aforementioned nodes. Detail was also provided on cross cutting initiatives. One of which was to ensure inclusive economic growth and enterprise development to enhance transformation in coastal towns. The idea was to break down barriers of entry such as capital and to increase new entrants from the previously disadvantaged to become operators in boat based whale watching and white shark cage diving. The NDT’s role was to coordinate reporting and facilitate progress of all the initiatives. The NDT also ensured that projects rolled out, unblocked challenges that might occur and supported further investment. The CMT Implementation Plan was reviewed annually to allow for the inclusion of new initiatives.

The Committee appreciated the briefing done by the NDT. Members asked what had made the NDT change its mind over pursuing initiatives around cruise tourism. In the past the NDT had not been keen to. Members highlighted the importance of radical economic transformation and that locals at coastal areas should benefit from developments taking place. Members had observed that usually when big projects took place only the previously advantaged benefitted. How could it be ensured that locals had an ownership stake in investments? The NDT was asked how it mainstreamed transformation. Communities had to be able to have access to the NDT’s Transformation Fund. People needed to be exposed to what opportunities there were in their areas. Members asked what the NDT’s role in the plan to develop SA’s coastline was. Was it more of a facilitative role? The Committee’s Content Adviser felt that perhaps the NDT could have a role on the Private Public Partnership (PPP) Toolkit. In this way funding could be unlocked for plans and concessions. Concern was raised that on certain projects locals were required to come up with capital which they simply did not have. Once again the Transformation Fund of the NDT could come into play. The NDT was asked to clarify the investment figures that had been provided. Members from the figures provided had observed that private sector was investing almost 700 times more than what government was. In addition the cost of creating jobs was high which was unusual for private sector as it was usually efficient in this regard. Simply put members felt that the figures did not add up. The NDT was also asked how it dealt with complications around land claims. Members asked what the NDT’s relationship with provinces and municipalities were especially in relation to Blue Flag Beach initiatives. Members were well aware of the problem that tourism was not included in the plans of municipalities. Members had also observed that in some towns municipal services were lacking as towns looked run down and refuse was strewn all over. Roads at coastal areas were in many cases also in a bad state. Of concern to members was the manner in which traditional leaders were taken on board on the development of coastal areas. What role had traditional leaders played? The NDT was asked about specific skills development that was needed at each destination. Marine guides also needed training. The Acting Chairperson observed that the NDT on the oceans economy in a matter of speaking was trying to reinvent the wheel. Why was international best practise not followed? Things needed to happen fast. The Committee needed to be provided with timelines on implementation. The NDT was asked whether indigenous people staying on the beachfront at Port Nolloth had been consulted. Members at the end of the day needed to know what impact was made on poverty alleviation and unemployment eradication.

Meeting report

Election of Acting Chairperson

In the absence of the Chairperson of the Committee, Ms L Makhubele-Mashele (ANC) who was not feeling well the Committee elected Ms P Adams (ANC) as Acting Chairperson.

Fires in Knysna

Mr Victor Tharage, Director General of the NDT, was unable to attend the meeting as he was on leave.

The Acting Chairperson asked the NDT how it was assisting with the recent fires in Knysna. How was the NDT and SA Tourism lending assistance?

Ms Shamilla Chettiar, in her capacity as Acting Director General (Deputy Director General: Destination Development), agreed that the fires in George had been devastating. The Minister of Tourism, Mr Derek Hanekom, had been at the site the day before. Thus far eight lives had been lost and 600 people had been evacuated and relocated. Minister Hanekom had met with the bereaved family members. The NDT had not yet done an assessment on what it could do. The Department of Environmental Affairs (DEA) was doing all it could. The NDT would do an assessment. 

Briefing by the National Department of Tourism (NDT) on the Oceans Economy

Ms Chettiar stated that the NDT was working on the Oceans Economy for two years. Cabinet had approved the Coastal and Marine Tourism (CMT) Implementation Plan on 16 August 2017. The idea was for SA to become a world class coastal and marine tourism destination. The forecast was that there would be an R21.4bn direct contribution to Gross Domestic Product (GDP) and it was approximated that the number of jobs would double to 116 000 by 2026. The CMT Implementation Plan was being implemented in a nodal/cluster approach. The identified nodes/clusters for the first phase (0-5 years) covered Durban and surrounds (KwaZulu-Natal); Umkhanyakude including Umhlabuyalingana and surrounds (KwaZulu-Natal); Port St Johns to Coffee Bay (Eastern Cape); East London, Port Elizabeth and surrounds (Eastern Cape); Cape Town and surrounds (Western Cape) and finally West Coast and surrounds (Northern Cape). Additionally, a set of cross cutting initiatives would be implemented across the nodes. Initiatives in the nodes covered six thematic areas ie marketing, events and routes; regulations and permitting; research and spatial planning; beach precinct development, tourism infrastructure and tourism safety; marine tourism and lastly skills development.

The Committee was provided with a comprehensive overview of initiatives and opportunities in the aforementioned nodes. Detail was also provided on cross cutting initiatives; one of which was the development of the Indi-Atlantic Route. The Route would include all towns and regions located along the South African coastline encompassing the four coastal provinces. The intention behind the creation of the Route was to develop coastal areas and towns and to facilitate growth and development of tourism products and services. Another cross cutting initiative was to ensure inclusive economic growth and enterprise development to enhance transformation in coastal towns. The idea was to break down barriers of entry such as capital and to increase new entrants from the previously disadvantaged to become operators in boat based whale watching and white shark cage diving. Operators could access funding from the Transformation Fund to acquire vessels. On investment towards the 2026 target of creating 116 000 jobs, current government investment was just over R164m over three years. However current private sector investment projections were in the range of R112bn.

Detail was also provided on work that was currently being done. Monitoring and reporting was taking place on a monthly basis. The NDT’s role was to coordinate reporting and facilitate progress of all the initiatives. The NDT also ensured that projects rolled out, unblocked challenges that might occur and supported further investment. The CMT Implementation Plan was reviewed annually to allow for the inclusion of new initiatives.

Discussion

Mr S Bekwa (ANC) appreciated the briefing by the NDT. He asked what had changed the mind of the NDT around efforts on cruise tourism. In the past the NDT had not been keen to pursue efforts on cruise tourism. He noted that it was government policy to ensure that radical economic transformation took place. He was pleased that the briefing had spoken about the Presidential Nodal Points. He felt that locals living around coastal areas had to be recognised and trained to reap benefit from developments that was taking place. There had to be benefit. He noted that normally when it came to big projects only the previously advantaged benefitted.

Mr Steven Pearce, Chief Director: Destination Planning and Investment Coordination, NDT, stated that in terms of the constitution tourism was a competency of all three spheres of government. Spatial development frameworks and Independent Development Plans (IDPs) was where tourism should be provided for. The problem was that tourism was an unfunded mandate. On cruise tourism, he said that Durban and Cape Town was being prioritised by Transnet. However; Port Elizabeth also had cruise ships docking at its port. It was about optimising what was at hand. For instance the Addo Elephant Park was part of cruise tourism packages. In Cape Town there was much more that could be done on cruise tourism. Tourists could be taken from the V&A Waterfront to the Khayelitsha Precinct.  

Mr G Krumbock (DA) asked what the NDT’s role in the plan to develop SA’s coastline was. Was it a more facilitative role? The NDT was asked to explain what its role was. Investment seemed to be in billions of rand which meant that stakeholders were taken on board. He asked - on work done in the six nodes over three years - whether it amounted to R164m (Slide 34). He asked what the cost of realising opportunities were (Slide 20). If the current private investment amounted to just over R112bn he said that investment from government’s side was substantially less (Slide34). The investment by private sector was 700 times as much as what government was investing. On the R164m invested by government, he asked whether the cost of creating a job was R138 000. He added that to be precise private sector spent 686 times more than government but their return was only 187 times more. He felt that somehow the figures did not add up. He pointed out that usually private sector was much more efficient in creating jobs. Why was it so much more expensive?

Ms Chettiar confirmed that the R164m was NDT’s contribution. She noted that figures were a difficult thing. It could be improved upon though. She referred to Slide 36 of the presentation document on an example of what the NDT funded directly. Another direct contribution by the NDT was work on the Indi-Atlantic route.

Mr Pearce, on jobs and the ratio of jobs, said that funding was through the Expanded Public Works Programme (EPWP). The work that the NDT did was with provinces and municipalities. The Coastal and Marine Tourism Lab had a set of criteria. There were feasibility studies done. Not much funding was provided by the NDT. Funds were from provinces and municipalities. He noted that the investment from the NDT’s side was not much. On jobs he explained that there were different types of jobs. On the EPWP, there would be jobs in construction. It was however important to check on whether there was a market for the product on offer. Jobs along Blue Flag beaches were of a permanent nature at hotels etc. Other benefits that could be had were increases in Gross Domestic Product (GDP) and in revenue. The ratio in tourism was 1: 3 for direct and indirect jobs. 

Ms S Xego (ANC) also appreciated the briefing by the NDT. She asked how the NDT worked with provinces. She understood that there was a Master Plan in place to attract investment. How was it ensured that people in surrounding areas had a stake in the investments? How was transformation mainstreamed? Community initiatives should take advantage of the NDT’s Transformation Fund. Locals had to benefit from Operation Phakisa. She asked how complications around land claims were dealt with. She also asked how the NDT ensured that previously disadvantaged persons took advantage of opportunities that were available. It seemed that the Committee needed to do some oversight. The NDT was asked who its partners on Blue Flag Status beaches were. How would it be ensured that all beaches had Blue Flag statuses? She stated that on skills development there was a need for accredited skills. She reiterated the importance of transformation and that locals should have an ownership stake.

Ms Chettiar explained that for each initiative there was a different implementation plan. She noted that the Department of Planning, Monitoring and Evaluation (DPME) did have an Operation Phakisa website on which regular updates could be observed. The NDT partnered with local government on Blue Flag beaches.

Mr Pearce stated that the NDT did engage on Municipal Infrastructure Grants (MIGs) and on Capital Infrastructure Grants. The NDT engaged with the Department of Trade and Industry (DTI) on investments on infrastructure to be made by foreign investors. On communities benefitting, the NDT was looking at an ownership model. The issue for instance could be on how one created the management of land if the community was unable to manage it. How could it be incubated? How could people be trained? There was a basket of resorts where concessions could be available for communities. It could be that communities had a 70% ownership stake. The issue was around if one brought in new investment could new concessions be created. Even when there was Foreign Direct Investment (FDI) foreign investors brought in their own people. It was a matter that was being looked into so that there could be a better spread.

Ms V Bam-Mugwanya (ANC), on transformation, asked what was happening in the area between Port Edward and East London. She felt that after 20 years nothing had been resolved. Nothing had changed. She also pointed out that there was no aquarium between Port Edward and Durban. She felt that so much could be done in the area. People needed to be exposed to what opportunities there were in the area. Shark attacks in the area were common and shark nets should be put in place. She also pointed out that roads to coastal areas in the Transkei were in a bad state. The areas were beautiful but the roads were terrible. The problem was that tourism was not included in the plans of municipalities. Many towns were also in a bad state and were dirty. In Umtata the airport had no viewing area for kids to watch aeroplanes take off. She also asked if there were land claim issues which the NDT had to contend with. There were lucrative tourism areas and people needed to wake up and take advantage of them.

Ms Chettiar responded that the National Empowerment Fund (NEF) and the NDT partnered on transformation. Efforts were made to develop ownership models. Land reform was an opportunity for tourism. There had to be real ownership. It was not just about the delivery of services.

Mr Pearce responded that roads were not part of the NDT’s competency. Work was being done on roads at Coffee Bay in the Eastern Cape Province.

Ms S Nkomo (IFP) was not comfortable with how traditional leaders were taken on board over the development of coastal areas. What role had traditional leaders played? The NDT was asked what type of capacity building was given to people in rural areas. She was aware that there were projects that involved diving and people being trained as drivers. Were these persons given opportunities to take diving further so that they could compete nationally or internationally? She asked at the end of the day what impact was made on poverty and unemployment.

The Acting Chairperson asked that all unanswered questions be submitted to the Committee in writing at a later time. She noted that it seemed as if the NDT was attempting in a matter of speaking to reinvent the wheel. Why was international best practise not followed? Things needed to happen fast. The Committee needed to be provided with timelines on implementation. She felt that the Eastern Cape and Northern Cape Provinces should be prioritised over others. Durban and Cape Town should be last on the list. She asked about specific skills development that was needed at each destination. She asked whether at Port Nolloth indigenous people staying on the beachfront had been consulted.

Ms Chettiar stated that skills development efforts were very specific. It differed from node to node. Gaps between supply and demand had to be identified. Skills development was not generic.

Mr Pearce explained that there were plans at Port Nolloth. The Northern Cape and Eastern Cape Provinces had been prioritised in the Master Plan. The two Provinces were after all the most impoverished. A roadmap on what needed to be done had been developed. On specific skills training one needed to know how many of which skills was needed. For instance in Durban the Sharks Board trained people to swim and dive. There was thus a base to create needed skills. The problem was that at local government level people did not know tourism. The NDT had developed a tourism development manual. Training was done in all nine provinces. 

Dr Sibusiso Khuzwayo, Committee Content Adviser, asked what the role of the NDT actually was. Did the NDT have a direct role? He said that the NDT could have a role in the Public-Private Partnership (PPP) Toolkit. Funding could be unlocked for plans and concessions. On the implementation of projects he noted with concern that before some people could get Isimangaliso concessions they had to come up with capital of R1.5m for boats. People did not have such types of funds. He felt that the NDT using its Transformation Fund could unlock financial barriers for people. The briefing had made mention of shark cage diving but he said that at Sodwana Bay there was also coral diving. The problem was that the operators of the boats were not the owners thereof. The NDT had not spoken to the matter. He noted that skills training needed to be provided to marine guides. It could be done with the help of the Culture, Arts, Tourism, Hospitality and Sport Sector Education and Training Authority (CATHSSETA). 

Ms Chettiar said that she had been involved in the development of the PPP Toolkit. The reality was that there were no longer any more funds available from the fiscus. Existing funding had to be prioritised. Sources of funding from abroad like from the European Union were looked at. If any answers to questions were missed written responses would be provided to the Committee.  

The Acting Chairperson thanked the NDT for the briefing and hoped in 2019 to get an update on what was happening. Members needed to keep track of what was happening on Operation Phakisa.

 

The meeting was adjourned.

 

                         

 

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