ATC170201: Report of the Portfolio Committee on Tourism on oversight visit to Mpumalanga Province, dated 01 February 2017

Tourism

Report of the Portfolio Committee on Tourism on oversight visit to Mpumalanga Province, dated 01 February 2017

The Portfolio Committee on Tourism, having undertaken the provincial oversight visit to Mpumalanga Province from 19 – 23 September 2016, reports as follows:

 

1. Introduction

South Africa has identified tourism as an economic sector. The concurrent function of tourism bestows some tourism powers and functions to provinces and municipalities. The Department of Tourism, later referred to as the Department, implements projects in various provinces in partnership with municipalities. The Mpumalanga Province takes up about 6.5 percent of South Africa’s land area and shares its borders with two Southern African Development Community (SADC) countries, that is, Swaziland and Mozambique. The province also shares its borders with the Gauteng, KwaZulu-Natal, Free State and Limpopo. The Province is home to a number of natural and other attractions that include the Kruger National Park, the Sudwala Caves, the Byde River Canyon, the Three Rondavals, Gods Window, the Samora Machel crash site and the iconic Bourke’s Luck Potholes.

The recent statistics places Mpumalanga in fourth position with regards to international tourist arrivals. The province recorded an increase in the number of international tourist arrivals from 1.1 million in 2014 to 1.3 million tourists in 2015 majorly influenced by African land markets. The Province has, however, not done well with regards to domestic tourism as it dropped from position four to position five with 2.2 million domestic trips in 2015 and 3.3 million in 2014.

This provincial oversight visits was geared towards assessing the achievements; evaluating the challenges, prospects for inclusive growth, particularly in the rural areas;  and the extent of government support at provincial and local government levels. The Committee gained insight into the state of tourism in the province with regard to highlights, existing milestones and challenges. The Committee started a series of oversight visits programme in the fourth Parliament with the Eastern Cape, followed by the KwaZulu-Natal, North West, and Mpumalanga is the fourth province to be visited.   These oversight visits have been significant in giving the Committee a clear perspective on how the Department of Tourism implements their Social Responsibility Implementation projects and collaborates with provinces and municipalities on a number of strategic issues.

 

1. Objectives of the oversight visit

The objectives of the oversight visit were:

• To assess the state of tourism in the Mpumalanga Province.
• To enhance cooperation and coordination between all spheres of government in developing managing tourism.
• To promote for growth and development of the tourism sector.
• To assess the level of stakeholder participation, both in the public and private sectors.
• To assess support for cultural and heritage tourism growth.
• To assess support for sustainable livelihoods with regards to small, medium and micro enterprises (SMMEs); and
• To assess the implementation of the tourism Social Responsibility Intervention (SRI) projects in the province.

 

1. Committee Delegation

The Committee consisted of the following members and included the support staff:

Figure 1: Delegation

Status	Name of Member	Political Party
Present	Hon. B.T Ngcobo (Chairperson) Hon. L.S Makhubela-Mashele Hon. S.T Xego Hon. S.D Bekwa Hon. S.E Kholwane, MPL	African National Congress (ANC)
	Hon. G.R Krumbock	Democratic Alliance (DA)
	Inkosi. R.N Cebekhulu	Inkatha Freedom Party (IFP)
	Support staff: Ms. N. Qumbisa Mr. J. Boltina Dr. S.P Khuzwayo Ms. J. Ntuli Ms. K. Tshoma Ms. S. Govendor	Designation: Assistant to Chairperson Committee Secretary Content Advisor Committee Researcher Committee Assistant Communications Officer

 

In Mpumalanga Province, the Committee was accompanied and assisted by the following officials from the National Department of Tourism: Mr T. Mhlanga, Provincial Manager; Mr T. Sibeko, Director: Programme Manager. Officials in the province included: Mr M.W Mkhize, Head of Department: Economic Development and Tourism; Mr S. Thwala, Chief Operating Officer; Mr X. Mthethwa, MTPA; Mr D. Mdluli, Director: Economic Development and Tourism; Mr J. Mbenyane: Office of the MEC; Mr M. Ramodibe, Director: Communication; Mr V. Sibiya, Acting CEO: MTPA; Mr S. Mhlaba, Stakeholder Relations; Mr M. Masango, Senior Tourism Officer.    

 

1. The oversight process

During the planning process, the Committee took a decision to visit all the nine provinces to meet and have engagements with varied tourism stakeholders. A number of meetings and discussion sessions were arranged through the Office of the MEC for Finance, Economic Development and Tourism in the province. From the committee point of view, the oversight visit had to meet two broad objectives, namely to receive a provincial perspective on the state of tourism in Mpumalanga Province, and secondly to follow up on investments made by the National Department of Tourism on Social Responsibility Intervention (SRI) projects in the province. The Committee had an opportunity to visit selected SRI projects implemented by the NDT through the Expanded Public Works Programme (EPWP) funding.

 

1. The oversight schedule

The Committee held a number of stakeholder meetings and visited Social responsibility Initiative projects as per the schedule in figure 2.

 

Figure 2: Oversight visit schedule in Mpumalanga Province

Mpumalanga
Dates	Meeting Place	City
19 September 2016	Committee overnight in Nelspruit	Nelspruit
20 September 2016	Meeting at Mnisi Resort with Bushbuckridge Local Tourism Organisation (LTO)                  & Site visit to Mabharule                   & Site visit to Huntington Village Tourism Project	Bushbuckridge             Bohlabela
21 September 2016	Meeting with provincial authorities, MEC, Provincial Department and MTPA                  &  Site visit to Pilgrim’s Rest	Nelspruit       Pilgrims Rest
22 September 2016	Site Visit to Middelburg Visitor Information Centre                  & Meeting with tourism stakeholders	Middelburg
23 September 2016	Site visit to Zithabiseni Resort	Witbank

 

1. The oversight process

The oversight visit included:

• Site visit to Mnisi Resort to check on the project and meet with management of the project, beneficiaries and local tourism organisation.
• Site visit inspection at Bohlabela (Huntington Village Tourism project) and meet with the projector implementer and beneficiaries.
• Meeting with the provincial authorities to receive provincial perspective on the state of tourism in Mpumalanga Province.
• Site visit to Pilgrim’s Rest to meet with tourism stakeholders on the challenges in the area.
• Site visit to Mpumalanga Tourism Visitor Information Centre to see progress in the centre.
• Site visit to Middelburg Visitor Information Centre check on progress of the project.

 

1. Briefing by provincial authorities

The briefing sessions are clustered according to category of stakeholders engaged by the Committee instead of the day in which they were met in the sequence of the oversight. This is done to provide an easy reference on perspectives and common issues raised by various categories of stakeholders. The interaction with the provincial government led by the MEC for Finance, Economic Development and Tourism and the Mpumalanga Tourism and Parks Agency (MTPA) yielded invaluable insights for the Committee on the state of tourism in Mpumalanga Province. These engagements were used as a springboard for subsequent engagements with other stakeholders later in the oversight visit.

 

1. Briefing by the MEC for Finance, Economic Development and Tourism

The MEC for Finance, Economic Development and Tourism, Mr SE Kholwane welcomed the Committee in the beautiful Province of Mpumalanga – the Place of Rising Sun. the MEC indicated that the economy in the province continues to be confronted by high unemployment, poverty and unequal society. However, the good news is that there have been improvements with regard to poverty levels and job creation, since the peak of the economic recession. The share of Mpumalanga’s population below the poverty line has declined in the last couple of years from 51.1 percent in 2009 to 36.2 percent in 2013. The expectation is to see this improving trend continuing over the medium term. The Provincial Government has identified tourism, through the Mpumalanga Economic Growth and Development Path (MEGDP) and Mpumalanga Vision 2030, as one of the strategic and priority sectors with the potential to propel economic growth and development in the province. The tourism industry alone, contributes about 10 percent to the economy of South Africa, given that it has contributed R357 billion to the country’s Gross Domestic Product (GDP) in 2014, and this figure is forecast to increase tremendously in the next 10 years. The sector employs about 1.5 million people in the country, thus claiming a share of about 10 percent of South Africa’s employment figure. This is supported by the employment ratio that 1 in every 12 people is employed in the tourism industry. As a result, tourism remains an integral part of the lifestyle of much of communities, as it carries significant weight in the economies of many countries, and is one of the leading elements of international trade. Tourism should therefore continue to be nurtured and exposed to the people, as it has the potential to produce lifetime benefits.

Tourist arrivals statistics indicate that Mpumalanga province is one of the only two in the country which registered positive growth in terms of international tourist arrivals in 2015. This has resulted in Mpumalanga being positioned in the number four spot as most visited province by international tourists in 2015. The province has recorded a remarkable increase of 156 250 international visitors, up from 1 144 021 visitors in 2014 to 1 3000 271 visitors in 2015, representing an increase of 14 percent.

Despite the growth in arrival numbers, the Foreign Direct Spend in Mpumalanga has decreased from R4 650 340 195 in 2014 to R4 608 735 526 in 2015 representing a 0.8 percent decrease. With regards to domestic tourism, Mpumalanga has experienced fewer domestic trips in 2015 due to lack of disposable income or people not affording to travel. Accordingly, Mpumalanga has recorded a decrease of 5 percent from 1 205 000 in 2014 to 1 144 000 on domestic trips in 2015. Equally so, the province has also recorded a decrease in the total Direct Domestic Spend, from R2.4 billion in 2014 to R1.8 billion in 2015. This has placed the Province at position 6 in terms of domestic tourist arrivals in 2015. Therefore, there is a need to work harder and smarter, to improve the rating on the domestic front in order to increase the Direct Domestic Spend.

Despite the booming tourism industry, the province remains concerned about the slow  pace of transformation within the industry. It continues to be dominated by white counterparts hence there is currently a review process of the National Tourism Policy, to address this challenge. There is a need to work together with all stakeholders, to fast-track the transformation of this lucrative sector for the benefit of all people. Furthermore, in order to ensure integrated tourism planning for the province, the Provincial Tourism Intergovernmental Forum (PTIGRF) has been established. This is a platform where government and tourism stakeholders meet to deliberate on topical issues affecting the tourism sector, and jointly plan for the growth of the sector. The intention is to do away with silo mentality. The National Department of Tourism has funded a number of community tourism projects through its Social Responsibility Implementation (SRI) Programme. Therefore, cooperation in such a programme, presents a wonderful opportunity to turn around the face of tourism in the province.

With uncoordinated planning, when the left does not know what the right is doing and vice versa, the intended objectives will not be realised. As a result, the communities/ beneficiaries whom the government is trying to assist in terms of fighting the triple challenge of poverty, unemployment and inequality, will remain impoverished even when there is tourism infrastructure for their benefit. The government has also prioritised the revitalisation of tourism infrastructure in the Province, and in this regard, the provincial government has provided funding to the tune of R18 million to the Mpumalanga Tourism and Parks Agency, to upgrade the tourism facilities at the Blyde River Canyon, Manyeleti and Songimvelo Nature Reserves. The objective in this regard is to improve the standard at these reserves for better experiences by customers. This includes ensuring Universal Accessibility for all, to all reserves and tourism attractions.

On Saturday, 17 September 2016, the Province launched the Mpumalanga Convention Bureau to focus specifically in attracting and booking large events and gatherings to the province. However, given the financial constraints, the Department will start on a small scale with the Bureau falling under the MTPA, though as a separate Unit, hoping to have a stand-alone, fully fledged Convention Bureau for the Province with its own identity, possibly in the near future. This is because it has been learnt that the buyers prefer to make business with fully fledged convention bureaus. Thus there is a need to start packaging Mpumalanga’s diverse tourism attractions, including the Kruger National Park, for incentive groups and the Convention Bureau will come in handy.

 

1. Briefing by Bushbuckridge Local Tourism Organisation

The Local Tourism Organisation was formed in October 2015 and has eight Board members. It operates at the Tourism Information Centre in Bushbuckridge and meets bi-weekly. The LTO is a collective voice of tourism, and markets Bushbuckridge as a destination, and represents tourism stakeholders at various government levels. Achievements of the LTO include hosting two Business Breakfasts and Business Tourism awards. It has also held two summits, one for youth and the other for all stakeholders; and conducted anti-road side corruption campaigns in three areas targeted to tourists visiting Bushbuckridge and Kruger National Park. It has also participated at Local Economic Development Forum, and has a slot every Sunday promoting tourism in radio Bushbuckridge.

The external challenges experienced by the LTO were highlighted to the Committee. These include amongst others:

• Road infrastructure that is bad for tourism;
• Tourism assets are not developed;
• Government projects are not functional;
• Poor marketing strategies for the destination;
• There is no adequate budget for tourism development and tourism development strategy; and
• Land ownership, land claims and land invasion remain a challenge for tourism development.

The LTO recommends that government fund entrepreneurs in tourism than community. There is a need for the establishment and funding of LTOs be fast-tracked, with the development of local tourism strategy be a priority in all municipalities; destination marketing skills in the tourism industry be developed.

 

1. Briefing by Emakhazeni Municipality Local Tourism Organisation

The Deputy Chairperson of Emakhazeni Local Tourism Organisation, Ms Trina Matheson briefed the Committee on the state of tourism in the municipality. Emakhazeni Local Municipality region is a primarily rural area with farming in the scenic Mpumalanga Highlands and mining, and includes the villages of Machedorp / Entokozweni, Dullstroom, Waterval and Belfast. There are many primarily white owned tourism businesses, but little development towards the inclusion of previously and currently disadvantaged communities beyond basic jobs. Attractions include historical Ancient Stone Circles, SA War history, hiking trails, fly fishing, birding, crafters and traditional dancers, culture, struggle heritage historical site, Dullstroom winter festival. Interaction with Emakhazeni Local Municipality, the following submission was made by the deputy chairperson:

• It has been about 8 years she has been trying to interact with the local municipality. The municipality has not been helpful or cooperative with the private sector organisation, Emakhazeni Tourism Association, which was set up to interact with them. The LTO has a membership of 100 tourism businesses.
• In 2011, the LTO tried to add tourism projects to the IDP but were told the Municipality was concentrating on Infrastructure, so their proposals were not included in the IDP.
• In 2007, the Department of Culture, Sport and Recreation held an annual 1949 Waterval Boven Train Disaster Commemoration. The Municipality made an undertaking that they will put up signage, and to date there is no signage in the area.
• In general there is little interest shown by local municipality towards the tourism development.

The Committee is of the view that the National Department of Tourism still has a lot of work to do through tourism workshops to educate local government officials and councillors about the value of tourism as a driver for local economic development.   

 

1. Briefing by Dr JS Moroka Local Tourism Organisation

Ms Hellen Matlo submitted to the Committee that Dr JS Moroko is a very under-developed and rural Local Municipality to the North of Pretoria. Within the local municipality area, there is Esther Mhlangu’s home, Thenjiwe Ndebele Cultural Village, Mkhondo Dam, and the Nature Reserve where people go for picnics. The nature of her submission to the Committee was that:

• When the municipality is requested to provide transport to RTO meetings, they claim to have no budget for tourism. The representative has to pay R380 from her own pocket. In constrast, Thembisile Hani Local Municipality provides their RTO representative with municipal transport to and from the meetings.
• Tourism in the region is not growing because there is no marketing of the area. A number tourists travel to Esther Mahlangu’s home as she well known but are not aware of other crafts and art projects.
• The Mkhondo Dam and Nature Reserve is used by picnickers, yet there is no development and nothing for art and craft sales.
• Lack of road infrastructure development which in turn impacts on tourism development.
• Budget of the Local Economic Development does not cater for tourism.

 

1. Project Site visits

The Department of Tourism is funding and managing the implementation of tourism infrastructure and skills development projects through its Expanded Public Works programme, namely, the Social Responsibility Implementation Programme (SRI). The SRI funding is exclusively appropriated for EPWP compliant projects. The in the SRI programme are geared towards poverty alleviation and job creation through tourism development as well as kills development. The Committee visited these SRI projects to obtain the latest information about the programme relating to budget and expenditure invested in the projects; lessons learnt and critical success factors; challenges encountered and remedial actions implemented; and sharing of information about the funding process, criteria and requirements.

 

 

1. Mnisi Resort Bushbuckridge

The project involved the establishment of accommodation; landscaping; creating picnic facility; construction of various buildings; infrastructure and lodge accommodation, construction of an entrance gate with guard hut and boom gates; converting existing restaurant and kitchen into laundry and staff accommodation; construction of a new administration block that will have the following amenities (reception area, lounge area, kitchen and dining area, parking and swimming pool). The project also included the completion of the construction and refurbishment of 10 existing rondavels and provision of security fence and water reticulation; construction of 10 braai stands, internal road, and sewer reticulation.

The project was terminated with the previous implementer due to maladministration and the matter is one of those included in the forensic audits sanctioned by the Department. A new implementer has since been appointed and the project is at the planning stage. The project is under planning and implementer has completed the second milestone. The budget invested by the Department to the project is R9 7 845 584 million and the owning agency is currently the Matlhwarheni Trust. The project has created has created 142 temporary job days and 12 permanent jobs.

 

1. Huntington Village Tourism Project (Phase 3)

The project is twin project with another projects called Mahlathi in Limpopo established round the Kruger National Park. The project was applied for by the group of women in the Programme called Women Around the Park and was an initiative of the Mpumalanga Tourism and Parks Agency. At some stage the project was cancelled due to delays in implementation and the group of women who initiated it lost interest. About 177 people were employed during the construction of the project. The project has undergone three phases of implementation, phase was not implemented but phases two and three were implemented. The project entailed establishment of a tourism facility comprising of standard and luxury chalets, administrative block and mini conference room, ablution facility, fencing, paving, access road, bulk infrastructure and parking bays. There were delays in project handover to the Bushbuckridge municipality with the MoU signed in May 2016, a year after the project was completed. The delays were caused by snags that were identified by the municipality technical team and the Department had to fund the completion and correction of those snags before the project could be handed over. The project was funded by the National Department of Tourism for R3.2 million and the Bushbuckridge Municipality is the owning agency.  

 

1. Mangwaza Lodge

The project was initiated by a group called Youth for Youth who applied for funding from the erstwhile Department of Environmental Affairs and Tourism. The initial project site was identified where there is sand pit mining and Chief Nkuna of the village did not allocate a suitable site for the project. The cultural village was meant to represent the three cultures of Mapulane, Mambai/Maswati, and Matsonga/ Matshangani. Phase one of the project was not completely implemented and the Department has approved an additional R19 million for phase two implementation. The land belongs to the South African government but the local tribal authority is claiming the land. The contract with the service provider was terminated three years ago and the project was unattended since then leading to serious vandalism. The land ownership issue remains a stumbling block and the Department has written a letter to the municipality requesting clarity on land ownership. The Department was threatening cancelling the project if the municipality does not provide satisfactory responses. When doing the environmental assessment, the new service provider appointed for phase two has raised concerns with zoning and Environmental Impact Assessment for the current site. The previous service provider did not facilitated any approvals for the project and they illegally constructed the project.

 

1. Pilgrim’s Rest Museum

Pilgrims Rest is situated on the magnificent eastern escarpment region of the Mpumalanga province. The area is richly imbued with diversity of natural, cultural and historic gems. The uniqueness of this historic village is evident in its museums and historic sites. It offers the visitor a fascinating window into the past and captures the spirit of the era and its people in their quest for gold. The history of Pilgrim’ Rest dates back to ancient times when Black miners worked the quartz reefs for gold. However, the historic village, was founded in 1873 when alluvial gold was discovered in the Pilgrims Creek. News of the discovery triggered the first major gold rush in South Africa and by the end of that year there were some 1 500 gold diggers working 4000 claims in and around Pilgrim’s Rest. It is estimated that R2 million worth of gold was mined during the first seven years of mining in the Pilgrim’s Rest valley.  The 1880s saw the end of the diggers era and by 1859 several small mining companies had amalgamated to form the Transvaal Gold Mining Estates. The miners of this company and local villagers shared fluctuating fortunes of mining at Pilgrim’s Rest until 1972 when the last mine ceased to operate. The village has subsequently become a living museum and a national icon which is amongst the important tourist attractions of Mpumalanga.

 

1. Meeting with Pilgrim’s Rest tourism stakeholders

The Committee was informed that Pilgrim’s Rest was declared a national monument in 1986 and is managed by the Department of Public Works. The Committee engaged with shop owners, workers and community members.   A number of pertinent issues and complaints were raised by the community, including:

• Lack of support from government to revive tourism in the area.
• No entertainment facilities in the town which has contributed to a decline in tourism numbers.
• Business in recent years has declined due to reduced number of tourists visiting the area.
• Competition between Pilgrims Rest and other tourist destinations in the area, such as the Kruger National Park and Sabie.
• Vacant shops being put out on tender by the Department of Public Works and attracting people who are not entrepreneurs who have abandoned those shops.
• The high cost of rental to the Department of Public Works which has caused many businesses to be on arrears with rental payments.
• Lack of transformation in the business sector, as there were only three black-owned small businesses in a village that could accommodate 29 businesses.   

The following two phase-approach solutions were suggested:

• Establishment of an independent body that can assess submissions from businesses who wish to enter Pilgrims Rest, and within that have developmental SMME businesses.
• The second approach, would be to engage with large hospitality companies with experience in managing tourism towns, to submit proposals (on development, operational and marketing) for a long-term concession for the area.

The stakeholders in the meeting agreed on the following way forward:

• The Committee was advised that a committee, comprising the Mpumalanga Department of Economic Development and Tourism, the Mpumalanga Tourism and Parks Agency, the Mpumalanga Department of Human Settlement, Ehlanzeni District Municipality, Thaba Chwea Local Municipality and the private sector had been established.
• The multi-stakeholder committee would consider and adopt various plans from stakeholders before being submitted for approval and implementation.
• This multi-stakeholder approach had been adopted and is meant to improve the economic activities, as the town is under the authority of the Mpumalanga Department of Public Works, Roads and Transport (MPDWRT).
• Tourism in town is expected to improve once the economic activities are re-ignited, by ensuring that all business premises are operational.

 

6.4.2     Pilgrim’s Rest Caravan Park

The Pilgrim’s Rest Business Chamber submitted that the Staffie Motor Bike Rally an annual event in Pilgrim’s Rest, using the Caravan Park as their base. This event draws hundreds of visitors to Pilgrims Rest, resulting in economic spin-offs for the whole village. In 2016 the following issues had a large negative impact on the event:

• No water taps for showers and baths in Ablution Block 5 and 7.
• No mirrors in Ablution Blocks.
• Doors in ablution blocks broken or removed.
• All toilets blocked at Ablution Block Number 7.
• The main water supply line to the Caravan Park is broken.

 

The Portfolio Committee assured the stakeholders that their concerns were noted and that the Committee will engage the Portfolio Committee on Public Works and the Department of Public Works on some of these issues. The Committee further calls upon the community of Pilgrims Rest to work with and support each other for the tourism industry to flourish. The challenges at the Caravan Park needed to be addressed by November 2016 as a group of 60 mountain bike enthusiasts want to camp in the Park for 3 days and ride the mountain bike routes in and around Pilgrim’s Rest. This national mountain bike group is part of the marketing of the Pilgrim’s Rest.

 

1. Mpumalanga Visitor Information Centre

The Committee had an opportunity to visit the Nelspruit Visitor Information Centre. The construction of the Centre is approximately 418 sqm in Nelspruit area at the MTPA precinct. This included areas for information, coffee shop, internet cafe, offices, lobby area, trading information centre and displays, booking space, multipurpose space, ablution facilities, internet stations and external works. The National Department of Tourism invested R7.7 million in the project and the owning Agency was supposed to be the Mpumalanga Tourism and Parks Agency, but there is no signed Memorandum of Understanding (MoU) between the Agency / Municipality and the National Department of Tourism. As a result, currently the entire building is under-utilised because it is hidden from the public-eye and is not marketed. The Committee was virtually unable to get any satisfactory responses regarding why the Visitor Information Centre was built where it is standing.          

 

1. Middelburg Visitor’s Information Centre (MVIC)

The Middelburg Visitor’s Information Centre was established in October 1998 and strives to create a positive tourism image and environment that will induce the travellers to spend more time and money in the region, without detrimentally affecting the local culture or ecology.  The National Department of Tourism framework for Visitor Information Centres in South Africa based on, among other things, the audit for VICs, the upgrade, unification and standardisation of tourism information provisioning necessary for the continued growth of the sector and changing the lives of all South Africans. The proposed framework for VICs for South Africa intends to provide the latter and the Middelburg Visitor Information Centre measure was established in line with the envisioned and required standards.  

The visitor’s information office provides an information/ assistance service to tourists in an area and should be viewed as necessary tourism infrastructure that contributes and enhanced travel experience in any destination. They VICs are not income-generating as tourists are not expected to pay for information. Thus, Visitor Information Centre needs to be funded. The objectives of Visitor Information Centres, given the context within which South Africa as a destination has to compete, VICs should be positioned to:

• Provide accurate information on the tourism product offerings that could be consumed by visitors in a destination;
• Support tourism growth by influencing visitor flow throughout the country;
• Provide generic tourism material, a user-friendly e-business platform that provides the necessary tools for information and reservation management and professional tourism services to visitors;
• Assist SMME development by facilitating the sale of their goods and services;
• Assist in promoting the products of SMMEs to the world market; and
• Contribute to the local economic development of the region through the facilitation of higher spend by visitors to the area.

The international research and best practices were considered by the NDTs in their international study, as well as a national survey, and defined the elements for a VIC. The study highlighted the following as main aspects for a VIC:

• A facility to make bookings;
• Information on the availability of accommodation;
• Integrated services and a call centre;
• A database that is maintained; and
• Internet facilities that is available to the public
• Curio shop.

Reports on expenditure against grants received by the Steve Tshwete Local Municipality Council (STLM) are submitted on a regular basis to Treasury. The STLM contributed R220 000 and businesses through the Middelburg Chamber has contributed the shortfall towards the operational cost of the MVIC. In the end, it is in the interest of both parties to ensure the success of this venture. It was highlighted that tourism is an important sector in Nkangala District, with tourists spending in the region of R4.7 billion within the District. The Department of Tourism was requested to assist with upgrading of existing facilities to align to international best practice standards. The NDT funding has ensured that the MVIC meets most of these requirements and are planning to develop further services. The Committee was impressed by what the MVIC has achieved with little budget of less than R1 million. The financial statement shows the Visitor Information Centre’s total expenditure for 2015/16 financial year is R897 000.

 

1. Zithabiseni Resort

The National Department of Tourism initially invested R28.5 million in the project and was followed by additional R15 million for renovation of 80 chalets, kitchen and the dining hall. Construction of new office building, new ablution facilities at the Zithabiseni entrance gate; new reception area, paving of walkways, drilling of boreholes, upgrading of 7 kilometres access road, replacement of kitchen machinery and installation of furniture in chalets and other buildings.

The NDT reported to the Committee that the project created 127 work opportunities and 92,830 training days were achieved. Furthermore, it was indicated that the facility is currently managed by the provincial department, but in the process of transferring to the Mpumalanga Tourism and Parks Agency. There are 119 people permanently employed by the resort. Before the renovation, the Committee was told the occupancy was at 12 percent and has increased to above 30 percent. The project was handed over but the Memorandum of Understanding (MoU) was not signed.

On the project site the Committee found a complete opposite of what was reported to the Committee meeting in Parliament. As a result, the Committee demanded an updated report on Zithabiseni Resort from the Caretaker - General Manager, Mr Edward Thwala by Thursday, 29 September 2016. The full project report had not been received by the time this report was completed.

 

1. Committee observations

The Committee observed a number of planning, institutional, financial and operational issue that require urgent attention by both the National department of Tourism and Mpumalanga province. The details of the issues are as follows:

 

7.1        Institutional arrangements, ownership, and operation of projects

The Committee is concerned that all the SRI projects implemented by the Department in Mpumalanga province have unresolved issues with regard to ownership. The Huntington Village/ Mabharule was initiated by the youth organisation and the Mangwazi project was initiated and funded for the women organisation. Both these beneficiary organisations who initiated the projects are no longer part of projects and this has led to project being vandalised. The Mangwazi Lodge has been hijacked by a private operator who allegedly wrote a letter to the Minister and requested permission to operate the project for his own commercial purposes without the benefit of surrounding communities. The facility was refurbished through private funding and is the facility is operated for commercial purposes. The concern for the Committee is that the public funds have been used to fund a private venture through ambush mechanisms. There is no formal memorandum of agreement setting parameters and deliverables of this commercial transaction. 

Some projects have been handed over to the Mpumalanga Tourism and Parks Authority (MTPA) but there is no role being played by this Agency in maintaining, operating and marketing the facilities.  The facilities are in dire state of disrepair and there are no plans in the pipeline to rectify these issues. It was indicated that there have been problems with handover of the project between the Department and the Bushbuck Ridge Municipality whereby there have been delays and after the handover the municipality has not taken care of the project. When the Committee visited the project, it was not operational as there has not even been a single tourist booked in the facility. The facility’s lawn is overgrown with weed and there was no water.

The Bushbuck Ridge Tourism Association indicated that they have a number of members in the association who could be available to commercially operate the SRI projects. However their expertise were not tapped into by the National Department of Tourism and the provincial government, including the Mpumalanga Tourism and Parks Agency. The Committee observed that the members of the Bushbuck Ridge Tourism Association were passionate about tourism development in the area and the Department, province and Mpumalanga Tourism and Parks Agency could engage them for mentorship and possible operations of some of the community projects.

7.2        Tapping into the wildlife economy and concessions

The Committee is aware of the value of tourism, most precisely of the wildlife watching market segment, and not just the economic value of wildlife itself. The intrinsic value of wildlife and its various contributions to sustainable development and human wellbeing including ecological, genetic, social, economic, scientific, educational, cultural, recreational and aesthetic, are manifold and maybe more or equally important for the communities adjacent to the protected areas. The Committee acknowledges that the United Nations World Tourism Organisation defines the economic value of tourism the result of all economic impacts caused by tourism. These impacts are direct, indirect and induced through the total of tourism expenditures, creation of employment, positive and negative externalities, revenues from taxes and other public charges, foreign exchange earnings and the related multiplier effects. 

An impression is developed that the Department is implementing SRI projects around protected areas without a full understanding of the wildlife tourism economy as there is a disjuncture in the support given to the communities to tap into the wildlife economy. It was learnt with concern that communities pay exorbitant fees to access concessions to conduct tourism operations inside the protected areas operated Mpumalanga Tourism and Parks and SanParks. The Minisi Resort which is adjacent to Manyeleti Game Reserve and Kruger National Park is conducting game drives into the adjacent protected areas but pays hefty fees for their game drive vehicles to access the parks. The expensive fees charged to communities defeat the purposes of developing pro-poor community-based tourism projects. The Committee has observed this elsewhere in the country whereby communities are also charged exorbitant fees for accessing concession to access operate tourism businesses inside Isimangaliso Wetland Park. This appears to be a trend throughout the country whereby communities are charged unaffordable fees to access concessions to operate tourism businesses in protected areas.

 

7.3        Value for money

The Committee was seriously concerned about the implementation and operation of Zithabiseni project. The Department provided a total funding of R43.5 million to refurbish the chalets that were destroyed by the fire. The provincial Department of Economic Development and Tourism is bailing out the project with R21 million on annual basis. The conclusions by the Committee that the funding given to the project is a bail out is based on the profit made by the project in the region of R7milllioin to R8million per annum. This project I therefore surviving on funding provided by the government as it does not generate enough revenue to sustain itself. The staff complement in the business was also observed to be blotted and unnecessary to operate the functional section of the facility. More money is paid to excessive staff who do not add any value to the operations of the business. The Committee therefore concluded that there is no value for money to the government funds used in supporting this business. The ideal business model will be for the provincial government to solicit services of a private operator that can assist the MTPA to run a profitable tourism business.

 

7.4        Appalling state of tourism in Pilgrims Rest

After noting a number of concerns raised by stakeholders in the tourism town of Pilgrims Rest the Committee observed that the concerns are justified. The town is run down and a number of tourism businesses closed. The tourism numbers have declined and the town can barely survive on the current tourism business. The Committee was concerned about the governance of the town which is seen as a major contributing factor to the declining tourism activity in the town. It was discovered that the town does not fall under any municipality but belongs the Department of Public Works which leases business to tourism. The challenges brought by the processes implemented by the Department of Public Works were seen as contributing to high mortality rate of businesses in the town.

7.5        Feasibility studies and choice of project location

Some of the projects visited by the Committee were found in locations which do not make good business sense for the purposes. Some projects were located in secluded locations far removed from the tourism beaten track in the province. It is apparent that there was no proper thought process involved when the choice of location made. This was confirmed by the lack of feasibility studies and marketing plans for these projects. The poor choice of location was also observed in the Mpumalanga Tourist Visitor Information Centre. The information centre is located inside the premises of the Mpumalanga Tourism and Parks agency. There is strict security at the gate and the building is tucked between the buildings of the agency. The Committee was appalled to learn had been not even a single tourist who visited the centre by September 2016. This building is a wasted facility and there is no value for money for the funds used to build the centre.

 

7.6        Planning for new projects

The Committee observed with concern that the service provider appointed by the Department to implement phase two of the Mangwazi Lodge project worth R19 million was choosing a new site instead of finishing the incomplete phase 1 of the project and building new structures on site to improve the project. This is seen as an unnecessary and irrational decision based on any technically sound basis. The Committee is concerned about the proposal by the new implementer to abandon the current site and building a new cultural village in a new site that will still attract the same approval requirements. This is seen as tactic by the implementer to get more money through implementer fees and new site preparations which will mean less money is used for the project and Full-Time Equivalent jobs. The decision will also delay construction as new site investigations will ensue, including Environmental Impact Assessment.

It was also observed the SRI projects in Mpumalanga do not pass the Universal Accessibility (UA) scrutiny. All the projects implemented by the Department are not universally accessible despite the Department having a Responsible Tourism Directorate that promotes compliance with UA requirements in all tourism facilities and attractions. Planning for SRI projects should now ensure compliance with UA before projects are approved.

 

7.7        Middelburg Visitor Information centre as a best practice

The Committee was impressed with the implementation method used by the Steve Tshwete Local Municipality in funding and supporting the Middleburg Visitor Information Centre. In this model, the municipality is funding the operations of the VIC and the Business Chamber in the areas is operating the facility. The municipality is fulfilling its constitutional mandate and does not meddle with the day-to-day business operations of the information centre. This collaboration between the municipality and the private sector is commended and is assisting in providing seamless marketing for the region. The Committee observed that other local municipalities within the Nkangala District municipality commended the Steve Tshwete Local Municipality and indicated they would prefer to use the same strategy to implement their own, funds permitting.

 

7.8        Funding for new projects

The Committee noted the sentiments raised by the Bushbuck Ridge Tourism Association that government must consider funding tourism entrepreneurs directly instead of funding community projects. The LTO indicated that community projects tend to fail whilst entrepreneurs are people who have vested interest in business and will create sustain job opportunities and improve the economy of the area.  The Committee also noted that there is no funding for LTOs and that there is a need for expediting establishment and funding of LTOs.

 

7.9        Poor participation of public representatives in Bushbuck Ridge

The Committee was concerned that there were many projects implemented by the Department in the Bushbuck Ridge Municipality but there were no councillors in all the projects visited. This was a challenge as there were many issues raised with project implementation that need strategic intervention at policy level. The municipal officials indicated that they had extended the invitation to councillors as the office of the Executive Mayor was aware in advance and had to attend to other political work of the municipality. The MMC for tourism had been delegated to be part of the oversight visit but was unfortunately called to an urgent meeting at Public Works offices.

 

1. Committee Recommendations

It is recommended that the Minister of Tourism:

8.1        Ensures that the Department conducts an assessment of the institutional arrangements in all the SRI projects implemented inn Mpumalanga and facilitates establishment of proper ownership structures to avoid vandalism and expedite operations of funded projects.

8.2        No projects publicly funded are hijacked by private owners who use them for their own commercial interests and that where projects have been hijacked, proper memorandum of agreements are put in place to safeguard public funds.

8.3        Engages SanParks, Mpumalanga Tourism and Parks Agency, and other protected areas authorities to structure affordable concessions for communities adjacent to these areas to operate profitable tourism businesses in advancing transformation.

8.4        Engages the MEC for Finance, Economic Development and Tourism in Mpumalanga province to develop a working business model for the projects to ensure value for money.

8.5        Engages the Minister of Public Works about the challenges faced by the tourism businesses in Pilgrims Rest in an effort to find a lasting solution in favour of tourism.

8.6        Ensures that all SRI infrastructure project comply with universal accessibility requirements.

8.7        Ensures that the Department conducts feasibility studies with marketing strategies for every SRI project before it is approved to ensure proper choice of location and sustainability of projects.

8.8        Studies the institutional arrangements and the implementation methodology used by the Steve Tshwete Local Municipality Council to support the Middleburg Tourism Visitor Information Centre and advice other local municipalities to replicate similar methods.

8.9        Explores the pros and cons of funding tourism entrepreneurs instead of community projects and a possibility of establishing a tourism development fund to expedite tourism development in the country.

 

1. Appreciation

The Committee would like to extend the special appreciation to the MEC of Economic Development and Tourism in the Province, the Mpumalanga Tourism and Parks Agency; the Head of Department, the project managers, and all the officials both from the national and provincial departments who provided support throughout the provincial oversight trip. The support given by the staff is highly commendable as they were with the Committee from the inception to the end of the oversight visit to the province.

 

1. Conclusion

The Committee realised that the Mpumalanga province a huge untapped tourism potential on both wildlife watching tourism, heritage and cultural tourism. There are also prospects for developing a thriving adventure tourism with a number of natural picturesque endowments. Work is cut out to ensure proper planning and implementation of planned mega projects to change the face of tourism in the province. If thee planned mega projects are successfully implemented the province will be able to claim its rightful place amongst the sub-destinations of South Africa.

The Committee was however not satisfied with the implementation of the Social Responsibility Implementation projects Mpumalanga projects. Various challenges that require urgent attention were observed. The Committee is also concerned about the apparent lack collaboration between the province and the Department in the implementation of the projects. The Committee acknowledges that most the projects visited are legacy projects implemented by the erstwhile Department of Environmental Affairs and Tourism. However, there seems to be poor coordination between the province and the national department on the interventions meant to remedy the imperfections of the past. The province and the provincial department are urged to work closely together to ensure seamless implementation of tourism programmes.

 

 

Report to be considered.