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Structural Arrangements
In South
Africa, the North West Parks and Tourism Board (NWPTB) has
been a lead agency successfully facilitating the development
of private tourism facilities in major provincial reserves.
The Madikwe Game Reserve (MGR) - one of the NWPTB's flagship
projects - is one of the first examples in South Africa of
the dominant new approach to commercial development in publicly
owned protected areas described in section
two, the ecotourism context.
One of
the key recent innovations of the NWPTB - negotiated within
the framework of the Madikwe Initiative - is an agreement
to grant long-term concessions to local rural residents for
the development of tourism businesses in the MGR.The community
of Lekgophung hold 100% of the shares in a development company
(Devco) via a legal entity known as the Balete Ba Lekgophung
(BBL) Development Trust. The Trust was established through
an intensive institution-building programme funded by the
Madikwe Initiative and implemented by the Centre for Community
Law and Development (CCLD) of Potchefstroom University
The Devco
has entered into a 45-year lease agreement with the NWPTB
for the development and operation of a facility at a prime
site in the MGR. The Devco has in turn appointed a private
sector partner to maintain and operate the lodge for an initial
ten-year period. During the early stages of the project, the
operating company is expected to establish the product as
a brand in the market and achieve prescribed social goals,
such as the employment and training of local staff as well
as the use of local entrepreneurs for the procurement of a
range of goods and services. These goals are contractually
entrenched in the operating agreement between the Devco and
the private partner. They therefore form part of a clear rights
framework, which the community could enforce should the operator
fail to discharge its empowerment obligations.
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| Funding
In the
Lekgophung case, the NWPTB maintained an insistence on commercial
rates for the land but allowed the community to bid for the
concession via a limited 'call for proposals' from 'neighboring
communities'. In this way, the community won a long-term lease
to a prime tourism site in the MGR. With support from the
Madikwe Initiative, it used these rights as a bargaining platform
from which to secure an advantageous set of arrangements with
a private operating partner. But it could not use land rentals
(or other resource fees) to capitalize its equity in the community-owned
company (which is to undertake the development of the lodge).
Under these circumstances, the community's share in the lodge
development company is financed by a mixture of loan and grant
capital, which ensures an early flow of revenue to the community(1).
The business
model piloted at Lekgophung thus establishes a partnership
that gives possession of a productive commercial asset to
members of a disadvantaged rural community in an environment
of public ownership where classic CBNRM options are not available.
It uses a relatively small donor grant (R2 million) to leverage
a bundle of public (R3.8 million) and private (R2.5 million)
investment that delivers a 100% share in the lodge-owning
company to the community.
(1) Given
the lodge industry's relatively high risk profile (related
primarily to deferred cash flows), the project does not seek
to capitalise the community's equity with market-related loans.
The capital subsidies (made up of a mix of grants and discounted
loans), while not removing all community risk, do mitigate
the need to fund the community's equity out of the cash flows
of the business, thereby releasing an early income stream
to the community.
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