Special Correspondent

Since the inception of the R1,3 billion timber project in the Ugie-Malcear district in late 2005, the Eastern Cape Development Corporation (ECDC) has been deeply involved as the implementation arm of the Provincial Government.

The Steinhoff-PG Bison group initially approached the Provincial Government to assist with the financing and successful implementation of this massive project which is expected to generate 3 000 direct jobs and 10 000 indirect jobs in one of the most impoverished parts of the Eastern Cape.

An evaluation process found that the project was aligned with the Provincial Growth and Development Plan in respect of the manufacturing and tourism development strategy as well as approved projects in the agro-processing and timber clusters.

Another big “plus” was that the project was in line with the Accelerated and Shared Growth Initiative of South Africa (ASGISA) which identifies the timber and forestry industries as a priority for job creation and development in terms of the national programme.

To ensure that the project was aligned to the local municipal Integrated Development Plans and that the socio-economic spin-offs would be maximized, a bottom-up development approach was taken by the ECDC.

At that early stage it was also agreed that the ECDC, as the Government’s development agency, would facilitate the implementation of the infrastructure projects and act as “implementing agent”.

The ECDC then took over the planning, strategic management and oversight of the project – a role that required the organization to think on its feet in the momentum was to be maintained.

As a result of the ECDC’s hands-on approach, much was achieved in relatively short time for a project of this magnitude -

• The record of Decision in terms of environmental legislation was fast tracked.
• Rezoning approvals through the relevant municipalities were dealt with speedily.
• Approval was obtained from the Department of Land Affairs in terms of the sub-division of agricultural land.
• A traffic impact assessment was completed and approved by the Department of Trasnport.
• Service providers were selected for construction of a sewer outfall pipeline to the oxidation ponds and the water connection to the plant.
• Service level agreements were signed between the Province, the ECDC and Steinhoff as well as a separate agreement with ESKOM to provide electrical power at a budgeted cost of R63 million.
• Earthworks were started on the plant site at Ugie.

The R1,3 billion investment will stimulate economic activity across a wide spectrum and is expected to yield sustainable results far into the future.

On the processing side there will be a sawmill, a chipboard factory and a door factory, while the forestry aspect will include a seedling nursery, expansion of the existing plantation and the planting of 12 000 hectares under Eucalyptus.

Flowing form this injection of new activity and investment will be the sprouting of new industries such as transport of timber and timber products, the construction of 75 new houses required initially for senior staff, and many other opportunities such as truckstops, schools, filling stations and workshops, catering and hospitality, retail expansion and tourism.

To this can be added the increased investment in municipal facilities, the injection of an estimated R300 million annually into the economy as salaries and wages, and the generation of many new opportunities for SMMEs and Broad-based Black Economic Empowerment (BBEEE).

Investment in the timber industry is but one of many strategic investments made by the ECDC across the Eastern Cape, helping the region to pull itself out of the doldrums and join the mainstream of economic development and growth in South Africa.