Business - Sakenuus

• Dam will bring jobs
• BEE 'not a perfect science'
• Help by 'adopting' a vine
• Drilling project discussed

The Minister noted that the success of the project would depend on "the benefit it brings to local people" and the "water security it offers to Cape Town".

With reference to TCTA, the project implementing and funding organisation, she said that she would be following the development of a Sustainable Utilisation Plan "with keen interest" because it would provide a framework for the utilisation of the structures created by the project and provide guarantees for ongoing development on the back of the project following the completion of construction.

She reminded the guests that the Western Cape water supply situation "was precarious".

Rasool called on everyone in the Western Cape to use water wisely, because water was "everybody's business".

"We should not wait for Government to impose water restrictions. Only self-imposed water restrictions will endure.

"It is up to all of us to plant indigenous plants, to water gardens at night, to wash our cars less often, to flush our toilets with less water, to shower more quickly, to cook without undue mess, to store run off water. This conscious commitment must become a way of life.

"The long-term sustainable success of the Home for All depends on each of us doing her or his part; especially in the way we use our most valuable resources.

Whether rich or poor, urban or rural, water is the key to long-term sustainable development for us all in the Western Cape."

The dam with a surface area of 535 hectares and a dam wall of 990m will have a net capacity of 129 36 million cubic metres. The project will increase the yield of the Western Cape Water System by 18%.

Currently provincial dam levels are at 39% and water restrictions are expected by September/October for domestic, agriculture and industry use

BEE is not a perfect science - the country clearly is feeling its way still and we have to take some risks, says SAWIT chairperson Gavin Pieterse, who initiated and orchestrated the arrangements for the KWV BEE transaction on behalf of the Trust.

"The KWV empowerment deal is a well-balanced, broad-based arrangement. There are no 'fat cats' involved here.

"We believe we've fulfilled the key essentials of sound black empowerment - broad-based, but qualified and well-led stakeholders in a deal grounded in commercial reality and sustainability," he said last week.

"Weighing the risks against the prize, we believe we'd have neglected our duty as Ministerial Trustees on SAWIT if we had not taken such an initiative.'

Pieterse, a renowned BEE specialist was instrumental in setting up the Black Economic Empowerment Commission in his then capacity as national deputy president of the Black Management Forum (BMF) and proceeded to become the deputy chair of the Commission whose recommendations formed the cornerstone of Government's current broad based BEE legislation.

"We set ourselves stern parameters from the outset," Pieterse said, "expressly to try to minimize the post-closure tears that have characterized some BEE initiatives".

They are:

* government endorsement, an inclusive, broad-based make-up of the consortia drawn from appropriate community-based groups and skilled individuals

* BEE credentials independently vetted for SAWIT by HSBC and Utho Capital, who also advised on many other aspects of the arrangements, including the appropriate share allocations of the successful parties, based on value add.

* stringent due diligence evaluation of the KWV and realistic future earnings projections by the IDC (including future cash flows dividend yields)

* securing skills transfer, human resource development requirements and affirmative procurement policies at the KWV, with direct SAWIT, Phetogo and IDC representation at board level, for a minimum of 10 years or until loans are repaid

* The ground-breaking principle that after ten years, the BEE consortium should own the equity in KWV unencumbered and ungeared, avoiding the need for recapitalisation which inevitably result in the asset returning to the financiers, thus making a mockery of BEE.

Pieterse said KWV labels should now win significant buy-in from black communities, in effect awakening vast, new and sympathetic consumer bases and participative distribution networks among hitherto indifferent groups who have felt excluded and who have regarded wine products as elitist.

"As the first large Cape wine group to achieve BEE status, the KWV wines and spirits should receive preferential consideration - along with other the emerging black consumers and for government and parastatal supply contracts."

He added: "We shall stay very close to this arrangement, with SAWIT representation on both Phetego and KWV Boards. Although SAWIT stands second in line to the IDC as a funder, we also need to re-cycle and spread these funds further in future.

"They are advanced at various levels of interest, depending on the financial status of the participants. It is a fact of South African economic life that some, specially hitherto community/NGO based organisations, simply have inadequate funds, and if empowerment is to make headway, these groups have to be assisted with soft loans to realize some of their sweat equity of the past. Other groups, more commercially organised, will be required to meet more market-related repayment rates."

The deal, which will require some R120 million in SAWIT funding over the next five years, has been criticised because it allocates a considerable chunk of SAWIT's R370 million resources to a single BEE project.

"However, the in-principle decision reached between the relevant government departments to afford SAWIT custodian status of the  Euro15 million as per the EU/RSA Government Wine and Spirits agreement is the beginning of a well considered recapitalisation strategy on the part of SAWIT.

"SAWIT's funding support for the transaction is thus not at the expense of its original mandate of emerging farmer support and alleviation of numerous social pathologies which plague the wine industry- nor does it affect its grant commitments to technology transfer, research and generic wine promotion.

"In the event, it was a unanimous decision by the ministerial-appointed trustees of SAWIT to proceed; they considered the black empowerment of KWV a sufficiently powerful and emblematic initiative, with repercussions industry-wide," said Pieterse.

"It further ensures longevity of impact of SAWIT project funding, beyond the finite timelines of the KWV funding to SAWIT."

Ministerial-appointed trustees make up the majority of 13 SAWIT trustees; under the terms of a 1997 settlement with the Government, the KWV funds SAWIT and appoints six trustees. The Minister appoints the chair. 

KWV trustee votes, which might have been considered conflicted in this instance, were not required to proceed. SAWIT's dated Trust Deed (drawn up before the BEE legislation) has recently been amended in line with the revised vision, mission and objectives with the support of the Trust's principals, the Minister and the KWV.

TO mark their entry into the world of high quality wine production, New Beginnings, South Africa's first black-owned vineyard, has launched a new label that depicts one of the New Beginnings families standing proudly beside their beautifully manicured vineyard.

They now aspire to their next goal, which is to cultivate the remaining five hectares of their eleven hectare farm by also planting it to the very best vines available in South Africa.

To this end they have obtained limited funding from the Department of Agriculture, which unfortunately is only sufficient to cover the preparation of the soil and the installation of an irrigation system.

In line with their conservative approach to debt, New Beginnings are extremely reluctant to borrow money to fund the acquisition and the further development of new vines.

"We have heard of too many other farming empowerment projects failing because the farmers borrow lots of money from the bank. We do not want to make the same mistake!" says Danny Hurling, the chairman of New Beginnings.

To source additional funding for this venture, New Beginnings last week launched an exciting project called 'Adopt-A-Vine'.

This initiative gives the public a unique opportunity to get personally involved in New Beginnings, sharing in their pride and success whilst at the same time experiencing the romance of winegrowing.

Essentially the 'Adopt-A-Vine' project invites private individuals and corporate entities to 'adopt' one of the vines in the beautiful vineyards of New Beginnings, and in the process become a cherished member of the New Beginnings family.

By purchasing an 'Adopt-A-Vine' package, which includes an excellent 'first release' bottle of New Beginnings wine under their new label, the purchaser becomes eligible to 'adopt' a separately numbered and identifiable vine.

The 'Adopt A Vine' project is about caring and sharing. The package is contained in a beautiful handcrafted wooden box that would make the ideal gift for a loved one or the perfect corporate gift to give to special customers and clients.

By supporting the 'Adopt-A-Vine' project, purchasers will of course also make it possible for New Beginnings to cultivate the remainder of their land and so become co-sponsors of this special project.

This is an exciting phase for New Beginnings enabling them to increase production and hopefully one day to reach further goals, such as the erection of their own cellar and possibly the acquisition of their own bottling plant. They also aim to construct their own houses one day and further their education.

"In the first three years there was no income at all from the vines and some of our members became a bit impatient," says Solly Skippers, one of the co-owners of New Beginnings who has the responsibility to manage their vineyard.

"We have thankfully managed to survive the most difficult years by keeping our debt as low as possible and running a roll on lawn business to generate some cash flow."

"We planted our vineyard in 1998 and are now able to produce wine of good quality."

For details contact Victor Titus on 869-8453 or victor@nelsonscreek.co.za.

A PROJECT to investigate the potential for abstracting groundwater from a deep-lying rock in the Klein Drakenstein Mountains, has been launched and a public meeting to discuss the findings of the draft scoping report will be held in Stellenbosch on Saturday 21 August at 10:00.

The meeting will be held in the WP de Kock lecture theatre of Stellenbosch University's Geology Building in Ryneveld Street.

The long term aim of the five year project is to establish the environmental, technical and financial feasibility of augmenting Cape Town's water supplies with groundwater abstracted from the Table Mountain Group Aquifer.

The project is one of the water supply strategies recommended by the City's Integrated Water Resource Planning and Cape Metropolitan Area Bulk Water Supply Studies undertaken in 1999 and 2001 respectively.

The area being investigated lies between Tulbagh and Kleinmond where the Aquifer occurs between depths of 200m and 1000m .

The project has reached the stage where a number of exploratory boreholes are to be sunk to determine groundwater quantities and quality.

The drilling programme is to be confined to about ten target areas selected through rigorous hydrogeological screening.

Other drilling sites have been identified near the Theewaterskloof Dam, in the Stellenbosch Mountains, near Steenbras Dam and in the Kogelberg Reserve.

One of the concerns expressed by members of the public, is that the drilling would affect the sources of mountain water used for local bottled water plants

However, only surface (above grond) impacts will be considered during this application, as no water will be abstracted.

Should the water yielded be of appropriate quality and quantity, full-scale trial boreholes will be established at the most favourable locations and be monitored for the effects of exploitation.

To register as an affected party, send your contact details to Karen Shippey or Penelope Jones of Ninham Shand Consulting services, fax 424-5588 or enviro@shands.co.za.

For informaton, visit the website www.tmg-aquifer.co.za where the draft scoping report can be viewed. Comments on the report will be received until 3 September.

[ Top ]

[ Top ]

[ Top ]