presentation to parliament portfolio committee may...

Presentation to Parliament Presentation to Parliament Portfolio CommitteePortfolio Committee

May 2011May 2011

1

IntroductionIntroduction

• South Africa has approx 550 and 48 terrestrial and costal protected areas and 232 conservation areas.

• Collectively, terrestrial protected areas exceed 7,9 million ha (7.5% of the country), while the costal/marine protected areas comprise over 426,000 ha,

• Nearly 4 million ha (50.6% of 3.4% of SA surface) of these (protected areas) are under SANParks management.

• SANParks mandate is to Conserve; Protect; Control; and Manage the National Park system and the associated cultural heritage.

2

Location of National ParksLocation of National Parks

3

SANParks BoardSANParks Board

In terms of the National Environmental Management: Protected Areas Act 57 of 2003 Act, as amended by the National Environmental Management Protected Areas amendment Act 31 of 2004, the SANParks Board is appointed as the accounting authority.

The following Board Members serve on the current Board:

•Mr Kuseni Dlamini •Prof Gerald Swan •Ms Bongi Kunene•Ms Sizeka Rensburg•Dr Gert Dry •Prof Graham Kerley•Mr Marius Diemont•Mr Fundisile Mketeni•Dr David Mabunda•Mr Themba Mabilane2x vacancies 4

Park Operations

Corporate Support Functions

Mission Why we Exist

Corporate Values Guiding Principles

Vision Word Picture of the Future

Strategy / Value Proposition Differentiating Activities

Value creation & delivery to Government,Customers and Stakeholders

Foundation

ConservationConservation

TourismTourism(a Conservation (a Conservation

Strategy)Strategy)

Constituency Constituency buildingbuilding

5

SANParks Business ArchitectureSANParks Business Architecture

Lear

ning

&

Gro

wth

Inte

rnal

Pro

cess

Stak

ehol

ders

/ C

usto

mer

s

Man

date

Promoting Customer Focused Responsible

Tourism

Proactively Engage and Inform all Stakeholders

Fina

ncia

l

Growing Revenue

Improving Corporate Governance

Long-term Financial Sustainability

Efficient Resource Management

Build a Learning Organisation Underpinned by SANParks Values

Delivery of Conservation Mandate by Excelling in the Management of a National Park System

SANParks CORPORATE STRATEGY MAP

Improving the State of the Conservation Estate

Promoting Research and Development

Promoting Effective Budget Management

Promoting Effective Management of Human Capital

Enhancing Organisational Reputation

Growing Community Support and Providing

Access and Benefit Sharing

Facilitating Socio- Economic Development

Operational ExcellenceConservation Asset

Management People Centered Innovation

SANParks Strategy MapSANParks Strategy Map

6

ConservationConservation

Objective Achievements 2010/11 Targets 2015/16 Challenges

Improving the state of Conservation Estate

% progress against implementation of Listed Species Management Programme = 95%

95%

• Damage causing animals.

• Rising rhino poaching incidents.

• Inadequate funding for energy efficiency and “greening” initiatives.

% progress againstimplementation of CulturalHeritage ImprovementProgramme = 90%

95%

% progress againstimplementation of ClimateChange Response Programme = 80%

90%

7

TourismTourism


Promoting Customer focused Responsible TourismGrowing Revenue

Accommodation Occupancy = 69.2% 74.5% • Recent recession

and economic down turn.

• Slow global economic growth.

• Natural disasters in the Far East and unrests in the Arabic countries.

• Rising fuel price.• Low tourism

occupancy.• Ageing

infrastructure.

Total Number of Visitors = 4,512,478(0.5% increase from last year)

5,065,000

Total Domestic Black Visitors = 397,618

(2.1% decline from last year)490,000

Customer Satisfaction Index = 76.9% 85%

Job Created through PPP = 1,814

414 (cumulative)

8

Operations: Parks & KrugerOperations: Parks & Kruger


Growing Community Support and Providing Access and Benefits Sharing

Participants in Environmental Education Programme = 156,168

140,000per annum

• Availability of funds to pursue more in initiatives.

• Collaboration with relevant government departments.

Number of Free Access Entrants = 14,123

18,000per annum

Sustainability Resources Use Projects = 12

15 per annum


Number of revised park management plans = 0

21(Cumulative)

• Budgetary and human resources constrains.

Total area added to National Parks:Coastline = 0 haTerrestrial = 0 ha

Coastline = 570,000 haTerrestrial = 10,149 ha

(Cumulative)

• Inadequate funding.• Role clarity with

MPA.9

Operations: Parks & KrugerOperations: Parks & Kruger



Number of revised park management plans = 0

21(Cumulative)

• Budgetary and human resources constrains.

Total area added to National Parks:Coastline = 0 haTerrestrial = 4,372 ha (100% Succulent Karoo)

Coastline = 570,000 haTerrestrial = 10,149 ha

(Cumulative)

• Inadequate funding.• Role clarity with

MPA.

% of Acceptable AnimalPopulation Decline due toPoaching :Rhino = 1.46% (146 per annum)Elephant = 0.0%

Rhino = 1.46% (385 per annum)Elephant = 0.0%

• Rising rhino poaching incidents.

Facilitating Socio- EconomicDevelopment

Number of Community- based Socio-Economic initiatives implemented = 8

12 per annum

• Budgetary constrains.

• Collaboration with neighboring communities.

10

FinanceFinance


Promoting Effective Budget Management

Income Variance = 0.7%(R933,7 million vs Budget of R927,2)

Break Even• Slow global

economic growth.• Low tourism

occupancy.Expenditure Variance = 0.0% (R944,1 million vs budget of R944,6 million)

Break Even

Growing Revenue

Gross Ops Revenue = 17.6%

(R769,3 million vs budget of R764,3)

14.6%

• Slow global economic growth.

• Low tourism occupancy (incl PPP).

Alternative Revenue = R36,6 million

R200 million (cumulative incl

Fundraising)

• Donor dependency.• Availability of high

valued species.

11

EPWP projectsEPWP projects



Total Area Rehabilitated of Alien& Invasive Species:

New = 37,000 ha per annumFollow-ups =138,500 ha per annum

New = 237,645 haFollow-ups =609,130 ha (Cumulative)

Facilitating Socio- Economic Development

Person-days onTemporary Jobs Created throughEPWP = 626,016

1,834,804(Cumulative)

• Budgetary constrains.

• Sustainability of the jobs created.

• Business continuity and sustainability of SMMEs.

Temporary Jobs Created through EPWP = 4,796

12,350(Cumulative)

Number of SMMEs Supported though EPWP = 250 (R60 million spent)

1,083 (R278,9 million to be spent) - Cumulatively

12

Human Resources Human Resources


Promoting Effective Management of Human Capital

Number New Employment: Permanent = 3,591Temporary = 780

Permanent = 385Temporary = 50(Cumulative)

• Budgetary constrains.• Recruiting candidates

meeting EE criteria.

% of Employees fromDesignated EE Groups:

Women as % of Management = 32%People with Disabilities = 0.6 %

Women as % of Management = 50%People with Disabilities = 5 %

Disabling Injury Frequency Rate (DIFR) Index =1.34 0.75

13

Corporate SupportCorporate Support


Enhancing OrganisationalReputation

Media Reputation Rating = 61% 76%

• Poaching.• Ageing infrastructure.• Perception management.

Number on Online Stakeholder = 36,000 46,500 per annum

• Access and availability of technology to stakeholders.

Promoting Research andDevelopment

% of new research projectsrelevant to SANParks key issues = 73% per annum

80 per annum • Inadequate conservation junior scientists.

Improving Corporate Governance

AG Audit Report outcome = Unqualified Report

Unqualified Report

• Alignment of the new National Treasure framework with PFMA.

14

Public Private Partnership Projects Public Private Partnership Projects Name of the PPP Output of the PPP

Current Value of Agreement (per

annum)

Date when the Agreement Expires

Tinga Private Game Lodge – KNP

- Revenue generation- Diversification of tourism offering- Infrastructure upgrade R41 million- BEE and job creation, 89 permanent jobs

R 2,049,000 31 March 2024

Jock Safari Lodge – KNP


R 1,529,000 30 September 2021

Lukimbi Safari Lodge – KNP


R 689,000 30 September 2022

Imbali Safari Lodge - KNP


R 1,479,000 31 October 2022

Rhino Walking Safaris – KNP


R 682,000 30 September 2023

Singita Lebombo – KNP


R 13,571,000 30 September 2023

Shishangeni Lodge – KNP


R 2,031,000 31 January 2025

15



annum)


16



annum)


Roundhouse Restaurant - TMNP

-Improved efficiencies- Quality Service Delivery- Revenue generation- Infrastructure upgrades- BEE and job creation, 48 permanent jobs

R 57,000 31 August 2030

Quay 4 Restaurant – GRNP

-Improved efficiencies- Quality Service Delivery- Revenue generation- BEE and job creation, 12 permanent jobs

R 400,000 28 February 2025

KNP Retail – Tigers Eye


R 16,639,000

31 December 2011Tender process for the appointment of an operator to be concluded prior to termination

KNP Restaurants – Compass


R 4,842,000 31 March 2022

Geelbek Restaurant – WCNP


R 119,000 28 February 2018

Addo Shop & Restaurant – Tigers Eye


R 2,021,000

31 December 2011Tender process for the appointment of an operator to be concluded prior to termination 17



annum)


Tsitsikamma Shop & Restaurant – Tigers Eye


R 1,238,000

31 December 2011 Tender process for the appointment of an operator to be concluded prior to termination

Mountain Zebra Shop & Restaurant – Tigers Eye


R 148,000


Augrabies Shop & Restaurant – Tigers Eye


R 366,000


Kgalagadi Shop & Restaurant – EJ Viljoen


R 687,000


Karoo Shop & Restaurant – Jan Viljoen


R 206,000


Duinepos Chalets _ WCNP

Improved efficiencies- Quality Service Delivery- Revenue generation- Infrastructure upgrades- BEE and job creation, 6 permanent jobs

R 52,000 23 February 2014

18



annum)


Listers Tea Room - TMNP

Improved efficiencies- Quality Service Delivery- Revenue generation- Infrastructure upgrades; BEE and job creation, 4 permanent jobs

R 60,000 30 June 2015

Rhodes Memorial Tea Garden – Groote Schuur Estate -TMNP

Improved efficiencies- Quality Service Delivery- Revenue generation- Infrastructure upgrades; BEE and job creation, 7 permanent jobs

R 240,000 30 September 2015

Tsitsikamma Adventures-Tourism promotion- Revenue generation- BEE and job creation, 10 permanent jobs

R 96,000 28 February 2012

Cape Point Lease/TMACC – TMNP

- Revenue generation- Tourism promotion- Infrastructure upgrades- BEE and job creation, 303 permanent jobs

R 14,617,000

25 November 2025Tender process for the appointment of an operator to be concluded prior to termination

Fuel Supply and operation of fuel service stations

- Revenue generation- Loss minimisation through enhanced control- Tourism promotion- Infrastructure upgrades- BEE and job creation, 50 permanent jobs

R 1,800,000 1 July 2021

Operation of the Skukuza Airport

- Revenue generation- Tourism promotion- Infrastructure upgrade- BEE and job creation, 10 permanent jobs

Not yet known Not yet known

Mapungubwe Shop & Restaurant- Quality Service Delivery- Revenue generation- BEE and job creation, 7 permanent jobs

R 60,000Anticipated to commence operation in June 2011 for 5 year period

19

SANParks is in the process of developing two safari lodges (hotels) in the Kruger National Park:The Malelane Safari Lodge, a Public Private Partnership (PPP) awarded to Malelane Safari Resort Investments and to be managed by Radisson Blu, is a 119-room lodge in the south of the Kruger National Park in close proximity of the Malelane Gate. The total footprint of the development site is 13,496m² with an additional 2,149m² allocated to a Park and Ride facility at the Malelane Gate. The project is well underway with 100% of the funding approved for the development. The Environmental Impact Assessment (EIA) is in process with the Scoping Report submitted to the Department of Environmental Affairs (DEA).The Skukuza Conference Lodge is a 125-room development planned to provide for accommodation and services that meet the expectations of the MICE (Meetings, Incentives, Conferences & Events) market. The proposed conference lodge is located within the existing Skukuza Rest Camp next to the conference centre with the intention of extending itself to the conference delegates. The initial design of the lodge has been completed and SANParks is in the process of appointing the EIA consultants for the development.

The Safari Lodges were subjected to immense negative publicity based on the false and slanderous allegations perpetuated by a former employee of SANParks. However, the SANParks Board re-affirmed its commitment to the building of the two new safari lodges in the Kruger National Park saying that this is a necessary innovation to diversify the market of the park, general enjoyment and access to the parks for all sectors of our society. Hotels have been part of national parks and other types of protected areas around the world and in South Africa. There is no empirical or scientific evidence that suggests that hotel developments have negative impacts on biodiversity or ecosystems. The objections that are currently floating in the public discourse are based on artificial conjecture, personal opinion, preference, the conservative purist ideology and a historical dislike of hotels by old school conservationists of the late 19th and 20th Centuries. The outcries against hotel developments are best summarized as emotional and spurious. The proposed hotel style accommodation facilities are part of the Commercialization Strategy and justified by the need to diversify the product range offered. The target market is the South African business sector (for conferences), a section of the middle class (all races) that prefers a full service (without bringing the whole grocery shop to the park or cook for oneself). Families with children prefer to have some form of modern conveniences to keep their children happy. The target market will be South Africans and therefore the pricing of the hotels will accommodate both the local and overseas markets. The new developments will in total create between 600-700 jobs from conceptualization, construction and operational stages. These jobs are vital in the Lowveld region where unemployment runs up to 70% of the regional population. The proposed hotel developments enjoy the support of 181 communities living around the KNP (estimated at 3 million people), 7 District Municipalities in the region, Traditional Authorities, the South African Tourism Business Council (representing the entire tourism industry), The Lowveld Chamber of Business and Tourism, Organized Labour and many sections of the silent majority living in townships, rural areas and the informal settlements of our country.The SANParks Board announced the confirmation of the appointment of Professor Willem van Riet as the Project Coordinator for both the Malelane Lodge and Skukuza Conference Lodge

Safari Lodges: SANParksSafari Lodges: SANParks

20

Radisson Blu Safari Resort, Kruger Park

The proposed development is located at the confluence of the Timfenheni Tributary and Crocodile River, 10km from Malelane Gate, in the southern Kruger National Park, Mpumalanga Province, South Africa.

Qualification: The commencement of construction of the development is subject to receipt of a positive Record of Decision from the Department of Environmental Affairs on the Environmental Impact Assessment. 21

Position in southern Kruger National Park

Position in relation to Malelane Gate

22

Timfenheni Tributary

Crocodile River

S114 Road

Development Site Layout

23

Main Lodge Complex Setting

24

Front View of Main Lodge Complex

25

Main Lodge Complex Entrance

26

Main Lodge Complex View

27

Front View of Family Suite Block

28

Rear View of Room Block

29

View from Room

30

Design PhilosophyThe design approach follows the idea of minimal visual, ecological and environmental impact wherever viable.

Visual Impact• Minimizing the outline and impact of the structures.• Natural materials use d to reduce both the internal and external aesthetic impact.• External lighting to be minimized.• The electrical powerline will be routed underground.

Ecological Impact• A small footprint with minimal manicured indigenous gardens and landscape design features.• The use of indigenous and endemic plants close to the buildings.• The positioning, alignment and design of the fence-line as a critical management structure.• A ‘search and rescue’ exercise of vegetation will be conducted and these trees and plants will be replanted on the site.• Sensitive ecological zones will be protected from construction and operational disturbance and then preserved.• The steel roof sheeting, as opposed to thatch, will significantly decrease the probability of unwanted fires and enhance safety.• Under-ground powerlines will eliminate this the safety risk for animals, birds and humans.

Environmental Impact• Electric cars will be used where possible to reduce both air and noise pollution, and the use of fossil fuels.• A grey water networking solution will be utilized wherever possible. • Rainwater harvesting solutions will be utilized wherever possible.• A waste management and recycling solution will be used to suit the park’s expectations.• The main laundry service will be kept outside the park.• The significant use of glass windows in the structures promote natural light and warmth, thereby reducing the need for

electricity.• Viable and affordable green solutions are being sought for every mechanical, electrical, plumbing (MEP) and architectural

specification.• Partnerships with international companies are being investigated for possible sponsorship and pilot projects for their green

technologies.• Policy to procure and manufacture as close to the site as possible.

31

2010/112010/11-- Financial PerformanceFinancial Performance

32

5 Year Budget 5 Year Budget -- IncomeIncome2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

A001 - Conservation Fees (202,260,657) (212,373,690) (222,992,374) (236,371,917) (250,554,232)

A005 - Concession Fees (62,792,317) (65,931,933) (69,228,529) (71,997,671) (74,877,577)A010 - Retail Gross Profit (16,399,134) (17,219,091) (18,080,045) (17,372,393) (15,062,495)

A010 - Sales - Trading (146,181,834) (153,490,926) (161,165,472) (167,612,091) (174,316,574)A020 - Cost of Sales - Trading 129,782,700 136,271,835 143,085,427 150,239,698 159,254,080 Gross Profit % 11.22% 11.22% 11.22% 10.36% 8.64%

B010 - Tourism income (468,823,761) (492,264,949) (516,878,197) (547,890,888) (580,764,342)

B010 - Accommodation (393,550,609) (413,228,139) (433,889,546) (459,922,919) (487,518,294)

B011 - Entrance Fees (1,107,087) (1,162,441) (1,220,563) (1,293,797) (1,371,425)

B012 - Trail Fees (27,709,935) (29,095,432) (30,550,203) (32,383,216) (34,326,208)

B013 - Traversing Rights - - - - -

B014 - Drive Fees (31,764,200) (33,352,410) (35,020,031) (37,121,232) (39,348,506)

B015 - Sundry Tourism Income (8,241,637) (8,653,719) (9,086,405) (9,631,589) (10,209,484)B016 - Cancellations &

Forfeitures (6,450,293) (6,772,808) (7,111,448) (7,538,135) (7,990,423)

C010 - Other income (26,615,165) (27,945,923) (29,343,219) (30,516,948) (33,568,643)

D010 - Grant: Conservation - DEA (118,747,368) (124,846,491) (131,931,579) (134,780,737) (137,686,878)

D020 - Grant: Roads - DEA (10,526,316) (10,526,316) (10,526,316) (10,526,316) (10,526,316)

D030 - Grant: Forestry (19,778,684) (20,174,258) (20,577,743) (20,989,298) (21,409,084)Total Income (925,943,402) (971,282,650) (1,019,558,003) (1,070,446,167) (1,124,449,566)

33

5 Year Budget 5 Year Budget -- ExpenditureExpenditure2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

Total Expenditure 944,939,514 997,588,658 1,047,468,091 1,101,586,456 1,158,567,018

M010 - Human resource costs 540,216,876 572,629,889 601,261,383 631,324,452 662,890,675

M020 - Maintenance costs 65,366,791 68,635,131 72,066,887 77,832,238 84,058,817

M030 - Depreciation 37,827,312 39,718,678 41,704,611 43,372,796 45,107,708

M040 - Operating Costs 301,528,535 316,604,962 332,435,210 349,056,970 366,509,819 NOI before Interest 18,996,112 26,306,008 27,910,089 31,140,289 34,117,453

M050 - Interest Received (15,704,160) (15,500,000) (15,000,000) (15,000,000) (15,000,000)

M055 - Finance Costs 2,630,185 2,100,000 1,800,000 1,500,000 1,200,000 Net Operating Income 5,922,137 12,906,008 14,710,089 17,640,289 20,317,453

P020 - Grant: Land Acquisition (6,243,860) (13,478,947) (14,300,877) (14,586,895) (14,878,633)P030 - Sales Fauna & Flora - LDV (12,000,000) (15,000,000) (15,000,000) (15,000,000) (15,000,000)

P060 - Donation - - -Net Income (12,321,723) (15,572,939) (14,590,788) (11,946,605) (9,561,180)Less Land Acquisition/Assets 12,321,723 15,572,939 14,590,788 11,946,605 9,561,180 Net (Surplus)/Deficit - - - - -

34

5 Year Budget 5 Year Budget -- NotesNotes2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

Note 1The grant values exclude the output tax payable on the grants received.

Per Alloc Letter Per Alloc Letter Per Alloc Letter Own Forecast Own Forecast

- Operational 106,102,000 111,804,000 118,357,000 120,724,140 123,138,623 - Parks expansion 7,118,000 15,366,000 16,303,000 16,629,060 16,961,641 - Roads 12,000,000 12,000,000 12,000,000 12,240,000 12,484,800 - Qwa Qwa 5,387,000 5,694,000 6,041,000 6,161,820 6,285,056 - Kids in Parks 1,764,000 1,852,000 1,933,000 1,971,660 2,011,093 - Marine and Protected Areas 17,119,000 17,975,000 19,071,000 19,452,420 19,841,468 - Knysna Unfunded Land 5,000,000 5,000,000 5,000,000 5,100,000 5,202,000 Total allocation 154,490,000 169,691,000 178,705,000 182,279,100 185,924,682 Value added tax 18,972,456 20,839,246 21,946,228 22,385,153 22,832,856 Available for projects 135,517,544 148,851,754 156,758,772 159,893,947 163,091,826 Special Project Allocations

Infrastructure 60,000,000 63,000,000 66,843,000 68,179,860 69,543,457 Combating Wildlife Crime 2,000,000 8,000,000 8,000,000 8,000,000 8,000,000

Total allocation 62,000,000 71,000,000 74,843,000 76,179,860 77,543,457 Value added tax 7,614,035 8,719,298 9,191,246 9,355,421 9,522,881 Available for Special Projects 54,385,965 62,280,702 65,651,754 66,824,439 68,020,576 This will be disclosed in the AFS in accordance with the accounting statement on grant assets.Total as per allocation letter 216,490,000 240,691,000 253,548,000

35

Jobs Baseline – 31/3/11

Category Jobs 31/3/11 New Jobs (5 yrs)Permanent (SANParks)

3 589 310

Temp / Contract (SANParks)

767 50

Concessions (PPP)

1 814 167

EPWP 4 015 3 088paOutsourced 220Total 10 405

Thank You

37

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