Five-star boutique hotel is part of a development which is expected to create about 12,000 jobs.

A R1-billion country estate development is set to transform and breathe new life into the sleepy town of Somerset East in the Karoo.

The development will take place on 2500ha of land at the foot of the Boschberg Mountain, behind Somerset East. About 10000 temporary and 2000 permanent jobs will be created during the different phases of the development.

About 450 plots will be sold and developed and the rest will be zoned as a nature reserve. The project is the brainchild of the Blue Crane Development Agency and the Eastern Cape Development Corporation.

BCDA tourism manager Chris Wilken said: "Our idea is to create residential, social and commercial space for people to relocate to Somerset East.

"The development will feature a five-star boutique hotel with between 40 and 60 beds, a wellness centre, 18-hole golf course, country club, commercial node, residential property and a retirement village."

Of the hotel Wilken said: "We will go out on a concession, and ask hotel groups to bid to develop and operate it. And the wellness centre will have a spa, massage and beauty facilities."

The country club, he said, would have tennis and bowling facilities.

The residential node will be divided into sections, with the first one featuring 120 ecological developments with no gardens, no high walls or swimming pools. "It will all be natural - green is the in-thing these days," Wilken said.

The second section will have 217 normal residences. The development is being marketed by Pam Golding properties, he said, adding that the retirement village would have 78 plots.

"The area has more than 360 bird species, and more than 200 different trees and shrub species. We really want the area to be the activity centre for the Eastern Cape with mountain-biking, hiking, gliding, horse-riding, sky-diving and water sport," Wilken said.

He said the agency would call for proposals for the commercial node, and prospective developers would submit plans on what light commercial industries they think would be viable in the area.

He said the agency would like to start construction next year, but was waiting for the record of decision (ROD) from the department of environmental affairs.