Sol Plaatje Local Municipality Value Proposition

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Sol Plaatje Local Municipality Value Proposition

• 15 January 2008

Sol Plaatje - The City that Sparkles
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Content

• About Sol Plaatje Local Municipality
• About Kimberly
• Demographics
• Economic Sectors
• Employment
• Economic Advantages

General Overview

• Availability of Quality Labour Pool
• Attractive Cost Competitiveness
• Good Quality of Life and great Lifestyle
• Superior Infrastructure
• Investment Incentives
• Comprehensive Support Structures

Value Statements

• Contacts

Conclusions
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About Sol Plaatje Local Municipality
Located within Frances Baard District
Municipality of Northern Cape Province, Sol
Plaatje Local Municipalitys economy was built on
the foundation of a thriving diamond industry
dating back to the days of Cecil John Rhodes out
of the disparate diamond workings that sprung
from the discovery of diamonds in the area.
The first diamonds were discovered on the
Bultfontein farm in 1869, followed by Du Toitspan
farm in 1870 and Wesselton in 1892. These
deposits are still being mined today. In 1871
diamonds were also discovered at the future
locations of the De Beers Mine and Kimberley Mine
(the Big Hole).
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About Kimberly
The capital and the only city of the province.
Kimberley is in the centre of South Africa with
two national roads leading to it, theN12 (Cape
Town via the N1 to the south and
Pretoria/Johannesburg to the north) and the N8
going east to west
In 1871, diamond deposits found on a hillock
dubbed Colesberg Kopje on the farm Vooruitzicht,
owned by the De Beers brothers, led to a mad
scramble for fame and fortune and the worlds
largest, hand-dug excavation, the colossal
Kimberley Mine or Big Hole.
Kimberley receives an average of 9.4 hours of
sunshine per day throughout the year and an
annual rainfall of about 450 mm
Today, it is a prosperous, thriving metropolis
with Victorian buildings that complement the more
modern buildings of the CBD. Lacking the furious
pace of South Africas larger urban giants, it is
perhaps the countrys most innovative town. Home
of our first flying school, our first stock
exchange and the first city in the Southern
Hemisphere to install electric street-lighting,
it is mining a brilliant future from a glorious
past.
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Demographics

• The population is 28 of the Northern Cape
  Province
• 54 of the population constituted the African
  cultural groupings
• Children under the age of 19 years account for
  approximately 39.5 of the total Sol Plaatje
  population.
• Those older than 65 years account for
  approximately 5.3 of the total Sol Plaatje
  population.

• The potential labour force (age 20 64) account
  for 55 of the total Sol Plaatje population.
• Setswana is the most spoken language (98),
  followed by Afrikaans (1) and IsiXhosa (1).
• The majority of the people residing in Sol
  Plaatje are South Africans, followed by SADC
  countries and Europe. In terms of foreign
  migration, the African countries contribute
  significantly followed by Europe. There is an
  estimated 2206 foreign migrants staying in the
  area.
• 31.2 of the total population is educated from
  Grades 7-9 (Standard 5-7) basic education.

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Economic Sectors
The Mining sector contributed 9.4 to the GGVA in
2001 and 5.6 to formal employment of the Sol
Plaatje economy. It experienced negative growth
of 4.7 to 7.6 from 1999-2001 that could be
attributed to the closure of mines in the region
and lower yields of quality rough diamonds.
The Utility Sector contributed 2.4 to the GGVA
in 2001 and 1.3 to employment. The Sector
experienced a decline of 4.4 to 5.3 forms 1999
to 2001. The decline in the sector could be
ascribed to the decline in the Manufacturing
sector and the permanent population, when textile
companies were moved to Port Elizabeth.
The Community and Personal Service Sector is the
largest contributor to the local economy in terms
of GGVA contribution (25.8) in 2001. Although
the Community Services Sector was the largest
contributor to the economy it has shown minimal
growth and remained 1.1 from 1999 to 2001.
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Employment

• Other major employment areas are retail
  distribution and services. Tourism is a useful
  contributor to the economy, but it is not large
  enough to be defined as a driver of the economy
  in its own right.
• Employment in the manufacturing sector has
  experienced slow decline between 2000 and 2003
  and as a result, productive sectors of the
  economy are in long-term decline and it does not
  seem that new productive sectors are emerging.
• Sol Plaatje faces a future as a town driven by
  government spending decisions. Apart from the
  reliance on public sector jobs, many households
  rely upon state grants.

With regards to the types of occupation, majority
of the people are working as elementary
occupation (24), professionals (12) includes
technical, and clerks (14).
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Economic Advantages

• Economic Hub of the Northern Cape The area is
  well known as the central point for retail,
  financial, business, medical and education
  services and hosts state of the art facilities.
  The area serves approximately ten more
  surrounding towns in the region.
• Scenic-rural atmosphere The vastness of
  surrounding farms and game farms provide the area
  with a rural atmosphere, which is especially
  favourable to domestic tourists who want to
  escape the fast-tracked living of the cities.
  Also, the semi-arid conditions of the landscapes
  attract international and domestic tourists.
• Available infrastructure and developable sites
  Industrial areas located within the area consist
  of available infrastructure with ample
  developable sites for industrial development.
• Tourism destination Sol Plaatje is seen as the
  diamond capital of the world and is the gateway
  to the diversity of tourist attractions within
  the Northern Cape Region.
• Linkages to global technological development
  tourism The SALT telescope and planned
  radio-wave telescope at Sutherland, to be the
  largest in the world, have a Tourism (stargazing)
  and Technological/educational spin-offs to the
  rest of the region.
• Good infrastructure linkages to other markets
  Sol Plaatje has good transport networks and road,
  rail as well as air transport is used for
  distribution of goods. The city is connected with
  large cities and markets in the North West, Free
  State, and Gauteng.
• Existing support services and linkages Due to
  the fact that the area is the economic and
  service hub of the province, it has a
  well-defined service base and supporting
  industries.
• Availability of affordable labour Due to the
  high unemployment rate, Sol Plaatje consists of a
  large labour pool, which is closely located to
  industrial areas.
• Proximity to Crossborder markets and the rest of
  Africa Sol Plaatje located close to the Northern
  borders of the country and national roads links
  it to countries such as Botswana, Namibia and
  Lesotho. The area also acts as a gateway to the
  rest of Africa.

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Content

• About Sol Plaatje Local Municipality
• About Kimberly
• Demographics
• Economic Sectors
• Employment
• Economic Advantages

General Overview

• Availability of Quality Labour Pool
• Attractive Cost Competitiveness
• Good Quality of Life and great Lifestyle
• Superior Infrastructure
• Investment Incentives
• Comprehensive Support Structures

Value Statements

• Contacts

Conclusions
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Value Statements
Value Proposition
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Value Statements
Value Proposition
12
Labour Supply
Sol Plaatje LM has a regular supply of quality
matriculants with good English skills and
cognitive ability (as measured by high pass rates
in English, Mathematics as Physical Science).
Northern Cape achieved a pass rate of 70,3 in
2007, a decline of 6,5 on the 2006 result. Of
these, 1 208 (11,9) candidates obtained
endorsements - this is an increase on their 2006
endorsement passes. The province has been
performing well consistently over the years with
much better rates compared to most
provinces. Frances Baard Educational District, of
which schools in the Sol Plaatje LM falls under,
is one of the best performers in the province.
Since the province does not have adequate higher
institutions of learning, majority of the
matriculants migrate to other provinces for
further education, however a significant amount
remain in the province hoping for employment
opportunities.
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Labour Supply (cont.)

• The area could also tap into graduates of local
  FET Colleges, tertiary institutions and private
  training colleges.
• The majority of the unemployed youth in the area
  also could be fed into the BPOO sector. Most of
  them have matriculation and are active work
  seekers.

The Institute for Higher Learning is the first
university established in the Northern Cape and
could potentially be a pulling factor for
students from other regions as well as other
African countries. The Institute could also be
the catalyst for the provision of skills and the
expansion of the ICT sector.
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Skills Development
The Northern Cape Urban FET college has developed
a BPOO Training proposal linked to the National
Skills Development Strategy (NSDS) and Provincial
Growth and Development Strategy and ASGI-SA. The
following table indicates the training to be
provided and the resultant National
Qualifications Framework (NQF) Level to be
attained on successful completion of the training.

• The Provincial BPO Steering Committee has thus
  far collected/developed the following
• Talent identification
• Proposal for BPOO training in the Northern Cape
  (The current focus is Sol Plaatje and
  Ga-Segoganyana Local Municipalities)

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Value Statements
Value Proposition
16
Cost of Labour

• According to the latest Salary Survey by Career
  24, average income in Northern Cape for the
  Customer Service/Sales industry is the second
  lowest after Limpopo.
• This sector includes the BPOO.
• For entry level agents the recorded figures could
  much lower, because of
• High unemployment rate amongst youth in the area
• The cost of living in the area is very low
  compared to metropoles.
• As indicated by the survey (Career 24), young
  people are the lowest earners.

Northern Cape, and inherently Sol Plaatje LM, is
one the destinations with the lowest cost of
labour in the country.
c
The salary figures quoted are based on the
respondents monthly income before tax and other
deductions (Source Career 24 Salary Survey
Results 2007)
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Telecommunications Cost
The current telecommunications incentives makes
Sol Plaatje LM one of the most attractive areas
as far as cost is concerned.

• Sol Plaatje LM is one of the identified areas for
  the dtis Project CC22, which seeks to prioritise
  BPOO sector development in designated areas.
• Investors in the area, as a result, could benefit
  from the proposed Telecoms Development Pricing.
• The pricing model is being finalised by the dti,
  DOC and Telkom.
• Investors will also benefit from the the dtis
  GAS incentives, which covers capital and training
  costs. (further information on GAS is available
  from the dtis website)
• These incentives are currently being revised by
  the government to cater for designated areas.

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Other Cost
Capital and Operational costs related to property
should not be a concern for investors since it is
very affordable, and most importantly it is
covered by the current incentives.

• Property in the area is very affordable with
  monthly rentals ranging from R30/m2 to R50/m2.
• Property costs could also be offset by the
  refurbishment incentives available from the IDC,
  in addition to municipal incentives. (the IDC
  website has more information on their BPOO
  sector offering, including the Techno sector.)

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Value Statements
Value Proposition
20
Access to Municipal Services

• Housing
• There is proper housing structures for the
  majority of the residence in the area. Major
  estate agencies are present in the area and offer
  rentals/sale of houses, apartments, cluster
  developments, security villages, land and
  guesthouses.
• Water
• The area has access to clean tapped water.
• Sanitation
• The municipality has efficient sewerage systems
  supporting flushed toilets in the area.
• There is regular refuse removal services, making
  the area one of the cleanest in the country.
• Electrical power
• Eskom is the main supplier of electricity and the
  municipality distributes to the locality.
• Electricity in the area is quiet stable with less
  load shedding compared to most parts of the
  country.

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Accommodation
Road Lodge - Adjacent to the Flamingo Casino and
Entertainment Centre which includes a200-seater
conference centre, this 90-room hotel is ideally
located for travellers doing business or
holidaying in the capital of Northern Cape
province. Boasting a gracious Victorian
facade, the hotel blends in with its bygone day
surroundings and is just minutes away from
everything that Kimberley has to offer.
Southern Suns Garden Court
Kimberley is the perfect option for business and
family holiday accommodation in Kimberley as it
is located minutes away from a host of the city's
tourist attractions. The hotel has 135
rooms/suites with conferencing facilities and
other services.
Protea Hotel Kimberley, a luxury 4-star graded
hotel, built on the edge of the famous Kimberley
Big Hole. The hotel forms the ideal base from
which to enjoy and explore all that historical
Kimberley has to offer including museums, war
routes and the new upgraded Kimberley Big Hole
and Mining Village. With its 94 luxury
rooms, it offers a restaurant and bar as well as
conference facilities seating up to 80 delegates.
In addition to the three major hotels, Kimberly
has an abundance of smaller hotels, guest houses
and BBs such as the Kimberly Club, Victorian
Guest Lodge, Ekhaya Guest House and many more.
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Education Facilities

• Many of the schools located in the SPM have
  residences/hostels where scholars from
  surrounding farms and rural areas can reside
  throughout the school going year.
• One of the largest and most specialized services
  offered by the city of Kimberley is a high
  standard and diversity of educational facilities.
  
• These range from primary, secondary and tertiary
  education facilities.
• It is a well-known perception that Kimberley
  offers some of the best schools and special
  schools in the region.

• The following tertiary institutions have presence
  in the area
• Central University of Technology, Free State
  (Satellite)
• Unisa (Satellite)
• National Institute of Higher Education (Newly
  formed)
• Damelin
• Boston City Campus

23
Health

• Numerous health care facilities and services
  (both public and private) exist within the area.
• There is provincial hospital supported by local
  clinics in the area.
• Kimberley Hospital Complex is currently being
  upgrade to a level two and three Referral
  Hospital.
• The quantity of Specialist surgeons and doctors
  is increasing in the area.

24
Shopping
There is a general good provision of retail
supply in the area. The majority of the existing
retail shopping centres are Medium Sized,
Community Centres, that generally provide
convenience goods, personal services, clothing
and appliances. The anchor stores are normally a
department store and large supermarket with 30-60
line-shops. Most of the larger centres are
located in the central business district, to be
accessible to the general public locally as well
as those travelling from surrounding areas. The
smaller, Local Centres are located close to or in
residential areas on the periphery of the CBD.

• The Diamond Pavilion shopping mall is located in
  the heart of Kimberly and has ample restaurants
  and food stores just like other cities.
• The majority of popular national franchises are
  represented in the area.

25
Lifestyle

• The city of Kimberley offers modern-day
  activities such as soccer, cricket, tennis,
  bowls, squash, golf and a wide range of shopping
  facilities.
• Kimberley has much to offer the visiting tourist.
  
• Excellent museums portraying early life on the
  diamond fields, military history from the
  Anglo-Boer War, mining museums and tours,
  Pioneers of Aviation Museum Art museums.

26
Safety

• The latest national crime statistics (2007 SAPS)
  indicates that Kimberly is improving on the crime
  situation. Most of the crime categories are much
  lower compared to rest of the country.
• The municipality has developed and is
  implementing crime prevention strategy.
• Part of these plan is to eradicate Crime and
  Grime issues within the CBD mainly due to liquor.

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Unique History Culture
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Kimberley tourist highlights

• Guided underground tours of an operational De
  Beers diamond mine - the only one of its kind in
  the world!
• The Big Hole and Open Mine Museum village. The
  Big Hole is still the largest man-made excavation
  in the world!
• Ride on a restored electric tram dating from the
  year 1914. This tram is the only operating tram
  in South Africa and offers a true memory lane
  experience.
• Follow the N12 Anglo-Boer War battlefield route
  from Kimberley and experience the most exciting
  Anglo-Boer War battlefields in South Africa,
  including the famous battlefields of
  Magersfontein and Paardeberg.
• The Kimberley Ghost Trail is a superb guided tour
  of the haunted corners of Kimberley.
• Visit the William Humphreys Art Gallery, South
  Africas only Grade 1 art gallery. This gallery
  houses a formidable collection of South African
  art which includes San (Bushman) rock engravings.
  
• Visit the Schmidtsdrift San settlement and see
  them create their arts and crafts (by appointment
  only).

• Kimberley Archaeological Route. Visit sites of
  ancient San rock, engravings, glacial pavings and
  early history in the company of an expert from
  the McGregor Museum.
• Visit the Alexander McGregor Memorial Museum,
  built in 1907 in memory of a former Mayor of the
  city.
• Rhodes built the Sanatorium in 1897. now the
  Northern Cape Provincial Museum.
• Guided tours of some of the most famous houses in
  South Africa - Dunluce, which belonged to John
  Orr of departmental store fame and Rudd House,
  the opulent house of one of the first De Beers
  directors.
• The Freddie Tait Golf Museum and the Spoornet
  Railway Museum are two unique museums not to be
  missed!
• Kimberley boasts some of South Africas oldest
  original pubs like the Star of the West, the
  Half and the Phoenix for a break to indulge in
  that well deserved quencher and a bite to eat.
• Close to Kimberley are stretches of South
  Africas best indigenous yellow fish fly-fishing
  waters flowing through fantastic unspoilt scenery

29
Value Statements
Value Proposition
30
Airport

• Kimberley Airport lies at the heart of the
  Northern Cape, in a town most famous for the Big
  Hole, a landmark carved into the earth by early
  diamond prospectors.

• The airport, the site of about 10 400 air-traffic
  movements a year, handles about 79 000 passengers
  about three-quarters of whom are business
  travellers.
• Kimberley Airport also dispatches a remarkable
  range of cargo everything from game trophies to
  industrial equipment. Even diamonds pass through
  the airport on the way to destinations in South
  Africa and abroad.

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Transportation

• The area has air and rail links with most major
  South African cities. The airport is eight
  kilometres out of town. Major car hire companies
  have rental kiosks at the airport. A taxi service
  is also available on request.
• The capital citys railway station is in Florence
  Street, close to the city centre. The luxurious
  Blue Train and Rovos Rail travels from Pretoria
  to Cape Town via Johannesburg and Kimberley,
  where passengers can board or disembark.
• The main transportation service locally is
  minibus-taxis. The major passenger flow in the
  morning peak is from Galeshewe to Kimberley.
  About 80 of all the minibus-taxis operate from
  Galeshewe and Roodepan/Homevale to the Kimberley
  CBD.
• Most of the minibus-taxi facilities (ranks) are
  in good conditions, with toilet facilities.

• Bus services is offered by 3 bus companies, two
  operate private contracts one with a mine and
  one with the municipality, and one bus company
  operate subsidised bus services on an Interim
  Contract.
• Top Gear bus company operate 7 bus routes of
  which 6 are being subsidised in terms of the
  Interim Contract and one is not being subsidised
  (Barkley West to Kimberley). They provide 8 buses
  on the Ritchie to Kimberley route which
  represents about 80 of their total capacity.
• The metered taxi industry in the area is limited
  to three operators that own 7 vehicles (six
  sedans and one minibus). The local authority
  provides one parking bay opposite the City Hall
  to the industry. The industry serves a specific
  market that is generally linked to the tourism
  market
• Long-distance operations are basically limited to
  tour groups visiting Kimberley and city to city
  travel between the main centres within South
  Africa. Provision for tourism parking is made at
  the tourism information centre at the offices of
  the Kimberley municipality.

32
Property

• Kimberley offers property and real estate
  investors a large selection of properties ranging
  from large houses to smaller homes, apartments,
  security villages, retirement complexes and guest
  houses.
• Government Property
• Kimberly as the provincial government seat has
  plenty of state property managed by the
  provincial Department of Public Works, majority
  of which are located in the CBD area.
• There is an adequate supply of government
  property in the area that could be used for BPOO
  operations.
• Property seems to be affordable with government
  ranging from R30 R50/m2 depending on the
  conditions of the building.
• Commercial Property
• There is relative abundance of commercial
  property in the municipality, mostly concentrated
  in the CBD of Kimberly.

33
ICT Connectivity

• Telkom has modern infrastructure in Sol Plaatje
  Local Municipality to support busy call centres
  of any size and capacity.
• Kimberly is sitting on the National and
  International fiber routes. Sufficient bandwidth
  is available, anything from analogue lines to
  metro Ethernet links. ISDN (including PRI) and
  DSL are available in the area.
• All Telkom exchanges has redundancy, which is
  available to the client on site, as per request
  from client - from Bronze at 98.5 to Platinum
  Plus at 99.995.

MTN and Vodacom offer mobile broadband services
through EDGE, 3G and HSDPA in the local
municipality, with the best coverage being around
Kimberly. Cellc is also offering EDGE services.
Sentech Iburst are offering their their
wireless broadband products in the area.
Neotel has a node in Kimberly but has not started
operating. The new operator is currently
deploying a nationwide, next-generation telecoms
network which will gradually span more than
10,000 km, and will eventually expand to reach
more than 80 of the country's population
(including smaller cities and towns) later in
2008.
34
Value Statements
Value Proposition
Investment Incentives
35
Municipal Incentives

• Sol Plaatje Municipality
• Has taken the initiative to formulate an
  incentive scheme to attract potential industrial
  investors to industrial sites located within the
  Municipality.
• Kimberly has a draft investment incentives scheme
  and has, as its first priority, decided that
  attractive municipal incentives be developed to
  stimulate local economic development in Sol
  Plaatje.
• The Incentives are a step in the right direction
  for the attraction of proposed investors,
  however, almost totally aimed at small-scale
  operators.
• Has identified a buildings that could be used for
  BPOO operations.

• Frances Baard District offers
• Property Rates Policy which gives preferential
  rates and tax Incentives for investors within the
  BPOO sector.
• Kimberley Urban Development Zone (UDZ) provides
  investors with tax write off for cost of
  improvement and construction of buildings.
• The incentives are for the refurbishment of
  existing buildings, investors are eligible to
  receive a 20 tax deduction in the first year of
  earning income, plus an annual depreciation of
  20 over a four-year period. For new
  developments, this incentive offers a tax
  deduction of 20 in the first year, plus an
  annual depreciation of 5 for the next 16 years.

These municipalities are in the process of
reviewing and updating these incentives,
nevertheless they are prepared to engage any
potential investor on a bilateral basis to
negotiate incentive packages for the BPOO sector
development.
36
IDC Incentives

• IDC offers a wide array of financial instruments,
  including
• Equity, Quasi-equity, Commercial debt, Wholesale
  bridging finance, Share warehousing,
  Guarantees, Export/import finance, Short-term
  trade finance, Wholesale venture capital.
• Assistance is provided for development of new
  projects, expansions or rehabilitation of
  existing projects and also BEE buy-ins into
  existing businesses.
• Development financing schemes targeting the BPOO
  sector are available.
• IDC wants to help the BPO sector in SA to expand

37
Government Incentives

• Investment facilitation in the province is
  facilitated directly by the Department of
  Economic Affairs, Environmental Affairs
  Tourism, it also fulfills the facilitating role
  to assist municipalities in negotiations with
  investors, and negotiations with financial
  institutions for loan funding.
• The province has established a provincial
  steering committee for the BPO sector. The
  committee has identified sites in the province
  where support would be provided in the form of
  training, to companies willing to outsource their
  BPO Services to South Africa including the
  Northern Cape within the next five years.
• The department can also facilitate access to GAS
  incentives available from the dti.

38
Value Statements
Value Proposition
Investment Incentives
39
Active Political Support

• The Northern Cape BPOO Steering Committee
  (consisting of among others the province, Frances
  Baard District and Sol Plaatje Local
  Municipalities) has identified BPOO as a
  Priority Industrial Sector within the ASGI-SA.
• The Municipalities have integrated BPOO sector
  as part of the Services Sector development within
  their Local Economic Development Strategies,
  primarily for
• Economic Diversification
• Employment Creation
• Through the Provincial BPOO Steering Committee
  necessary Plans and Strategies are in place to
  support the development of this sector in the
  area.

40
Content

• About Sol Plaatje Local Municipality
• About Kimberly
• Demographics
• Economic Sectors
• Employment
• Economic Advantages

General Overview

• Availability of Quality Labour Pool
• Attractive Cost Competitiveness
• Good Quality of Life and great Lifestyle
• Superior Infrastructure
• Investment Incentives
• Comprehensive Support Structures

Value Statements

• Contacts

Conclusions
41
Contacts

• Sol Plaatje LM
• Mr. P. Lenyibi (Municipal Mayor) -Tel 053
  830-6101
• Mr. T.F. Mashilo (Municipal Manager) - Tel 053
  830-6101
• Ms. Luanne Genade-FoucheExecutive (Director
  Corporation Services) - BPOO Champion - Tel 27
  (0)53 830-6700, Fax [phone], Cell
  27 (0)79 517 4846
• Provincial Steering Committee
• Mr. Darryl Christians, Tel [phone], Cell
  082 332 2660, email dchristians_at_temp.ncape.gov.za
  
• IDC
• Willie Fourie Head Techno-Industries
  SBUcallcentre_at_idc.co.zaCall centre 0860 693
  888Techno-Industries [phone]
  willief_at_idc.co.za
• Kimberly Business Chamber
• Mr Madoda Vilakazi (President), Mail PO Box 350,
  KIMBERLEY, 8300, Street Bizznizz Centre, 14 Long
  Street, Tel [phone], Fax [phone],
  E-mail sharon_at_nocci.co.za.