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Study into the Feasibility of Establishing
A Trading Centre at Paulpietersburg
Consolidated Project Report:
Situational Analysis, Survey Analysis &
Feasibility Model
August 2010
Prepared for:
Report prepared by:
Study of the Feasibility of Establishing an Informal Trading Centre at Paulpietersburg
Consolidated Report - August 2010
- prepared by Graham Muller Associates
Page 2 of 86
Table of Contents
1. Situational Analysis ................................................................................... 4
Introduction ...................................................................................................................... 4
Project alignment with the eDumbe Local Municipal IDP ................................................ 5
Macro & Micro Orientation .............................................................................................. 6
The Site ........................................................................................................................... 10
Market Area Demarcation .............................................................................................. 12
Target Market for SMMEs............................................................................................... 12
Demographic Analysis ..................................................................................................... 16
Contextual Assessment of Retail Markets in Paulpietersburg ....................................... 18
SMME Business Potential of the Site .............................................................................. 19
Research into Unfulfilled Trading Needs within the Community ................................... 23
Constraints to SMME Business Development and Informal Trading ............................. 25
Additional Issues Identified in the SMME Survey ........................................................... 27
2. Survey Analysis ....................................................................................... 30
Introduction .................................................................................................................... 30
Survey Area and Sample Size .......................................................................................... 30
Breakdown of Earnings of Traders .................................................................................. 33
Vision, development concept and role envisaged for the site based on its strengths
and identified opportunities ........................................................................................... 34
Alignment and Coordination of the Relationship between the First Economy and
the Second Economy in Paulpietersburg and the Impact of the Existing Shopping
Infrastructure on Current and Potential SMME’s and Informal Traders ........................ 36
Study of the Feasibility of Establishing an Informal Trading Centre at Paulpietersburg
Consolidated Report - August 2010
- prepared by Graham Muller Associates
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Registration and Skills Training for Informal Traders ..................................................... 37
Linkages between the Site and Other Roleplayers based on Interfaces With and
Integration with the Surrounding Community ............................................................... 40
Guidelines for physical design and landscaping strategies for the site(s) that will
enhance amenity and security ........................................................................................ 45
3. Feasibility Model .................................................................................... 47
The Case for an Informal Trading Centre at Paulpietersburg ......................................... 47
Informal Trading Centre Development ........................................................................... 51
Existing informal trading inPaulpietersburg and Dumbe Township ............................... 52
The Vision, Development Concept and Role Envisaged for the Paulpietersburg Site
Based on its Strengths and Identified Opportunities ..................................................... 55
Linkages between the Site and other Roleplayers ......................................................... 56
Development of an Institutional Matrix for the Proposed Informal Trading Centre ..... 57
Infrastructure for Off-Site and On-Site Services and Including Access and Service
Provision and Management ............................................................................................ 62
Project Implementation and time frames ...................................................................... 68
Financial Model ............................................................................................................... 70
Risk Identification, Assessment and Mitigation .............................................................. 71
Project Feasibility and Way Forward .............................................................................. 77
Bibliography .................................................................................................. 80
Appendix A ................................................................................................... 81
Appendix B ................................................................................................... 82
Study of the Feasibility of Establishing an Informal Trading Centre at Paulpietersburg
Consolidated Report - August 2010
- prepared by Graham Muller Associates
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1. Situational Analysis
Introduction
Paulpietersburg is an established town that predominantly supports the agricultural sector
of eDumbe Municipality and beyond. The retail facilities located in the town itself in
addition to serving the residents of the town and the commercial farmers in the surrounding
district, also provide retail services to the poorer communities in the adjacent Dumbe
township, to inhabitants of Bilanyoni (a lower-income settlement located approximately
14kms from Paulpietersburg) and the people who reside in the deep rural areas in the east
of the municipality such as Klipspruit, Blinkwater and Schaapkraal. Where the formal retail
markets fail with respect to employment provision, competitive pricing and convenience,
informal trading has provided local community members both with a means to earn income
and also to provide the lower-income segment of the market with goods and services in
ways that are cheaper and/or more convenient than when delivered through the formal
sector.
The establishment of a new shopping mall between the ‘old town’ of Paulpietersburg and
Dumbetownship 2kms away will create a potential new hub of activities involving both retail
and public transport (should a taxi rank be established there). In recognition of the
importance of the informal sector in Paulpietersburg and eDumbe Municipality in general,
the KwaZulu-Natal Department of Economic Development and Tourism has commissioned
this feasibility study to best understand the needs and thresholds of the informal sector in
and around Paulpietersburg, with particular emphasis on the proposed location of the new
shopping mall.
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Consolidated Report - August 2010
- prepared by Graham Muller Associates
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Project alignment with the eDumbe Local Municipal IDP
The eDumbe Municipality Integrated Development Plan (IDP) articulates a number of
development imperatives. This excerpt from the municipal vision expresses the ambition to
promote sustainable economic development and service provision for communities:
“*Part of eDumbe Municipality’s vision is to be+ economically viable and to provide
services to its communities in a sustainable manner”
Source Final Three Year IDP (2009/2010 Review)
In addition to this, eDumbe Municipality’s mission statement clearly advocates and
promotes the rejuvenation of the urban economy through urban renewal programmes, the
support of economic corridors and the facilitation of rural economic development through
promotion of small, micro and medium enterprise (SMME) development and growth.
Local economic development (LED) is highlighted as one of eDumbe Municipality’s five key
performance areas. The IDP outlines a number of key challenges faced in eDumbe
Municipality, notably:
The municipality’s location in an extremely poor part of KwaZulu-Natal;
That the municipality’s significant and large rural population is largely dependent on
the town of Paulpietersburg for access to services and facilities;
That despite the presence of formal retail facilities in Paulpietersburg, there is a
substantial leakage of spending caused by local residents travelling to the towns of
Piet Retief and Vryheid for the purchase of various goods and services. The proposed
mall will provide enhanced retail facilities sufficient to retain a larger portion of that
spending in eDumbe Municipality, and more specifically, in Paulpietersburg;
That 53% of the population of the municipality are women (the majority of existing
traders are also women)
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Consolidated Report - August 2010
- prepared by Graham Muller Associates
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That the majority of community members use public transport (primarily minibus
taxis) to access retail facilities.
In light of these significant challenges, it is pertinent to note that both the proposed mall
itself and the inclusion of informal trade and SMME facilities in the planning of the proposed
mall will help to address these. The entrenchment of Paulpietersburg as a centre for formal
and informal activities will be enhanced and improved by construction of the mall.
One of the identified economic development strategies of eDumbe Municipality is to
promote sustainable socio-economic development. This feasibility study is aimed at
supporting this strategy.
The proposed mall together with this assessment of the feasibility of associated informal
trade and SMME facilities indicate a strong alignment with the municipality’s goals of local
economic development, sustainable urban renewal, corridor development and support of
SMME’s.
Macro & Micro Orientation
Paulpietersburg is located in eDumbe Municipality in northern KwaZulu-Natal, about 50kms
from Vryheid and in the foothills of the Dumbe Mountain. The town is located on the
Rainbow Route that leads from Mpumalanga to the coast through Piet Retief,
Paulpietersburg, Vryheid, Melmoth, and Eshowe.
eDumbe Municipality currently has a population of 90,726 people of which 11,229 are
employed in the formal and informal sectors. The majority of the employed workers belong
to the large agricultural sector, social and personal services sector and general government
services sectors. The area has a number of tourist attractions, mainly the nine hot and cold
mineral water pools at Natal Spa just outside town, Fort Clergy in Luneburg, the village of
Study of the Feasibility of Establishing an Informal Trading Centre at Paulpietersburg
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Luneburg (which is the original settlement of German Lutheran missionaries) and Ithala
Game Reserve, which is close by and easily accessible.
The output generated per sector in the eDumbe Municipal area is illustrated in Figure 1.1,
overleaf.The majority of the output per sector is attributed to the manufacturing,
agriculture, transport and mining sectors. Manufacturing is the highest contributor to gross
domestic product (GDP) in the area, with a contribution of about R 710 million.
Figure 1.1: eDumbe Municipality GDP output by sector for year 2008 (R millions)
Source: Quantec Standardised Regional Database, 2009
0 200 400 600 800
Electricity, gas and water
Finance, insurance, real estate and business services
Community, social and personal services
Construction
General government
Wholesale and retail trade, catering and accommodation
Mining and quarrying
Transport, storage and communication
Agriculture, forestry and fishing
Manufacturing
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Data on employment per sector indicates that the majority of the employed belong to the
agricultural sector followed by the community, social and personal services sector. The
agricultural sector employs about 1,700 people, which accounts for 10% of the total
population in eDumbe Municipality and 20% of the formal employment total working
population.
There are 11,229 people employed in eDumbe Municipality of whom 8,550 are employed in
the formal sector and 2,679 are employed in the informal sector.
Figure 1.2: eDumbe Municipality formal employment per sector for year 2007
Source: Quantec Standardised Regional Database, 2009
0 500 1000 1500 2000
Electricity and water
Transport, storage and communication
Mining and quarrying
Construction
Finance, insurance, real estate and business services
Wholesale and retail trade, catering and accommodation
Manufacturing
General government services
Community, social and personal services
Agriculture, forestry and fishing
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Most of the employed workers in the formal sector are either semi or unskilled labourers.
Highly skilled workers number only about 800 people, which is a very small portion of the
total number of employed persons in the municipality. See Figure 1.3, below.
Figure 1.3: eDumbe Municipality employment by skill level for year 2007
Source: Quantec Standardised Regional Database, 2009
0 2000 4000 6000 8000 10000 12000
Formal and informal employment
Total Informal employment
Total Formal employment
Total Formal Highly skilled employment
Total Formal Skilled employment
Total Formal Semi- and unskilled employment
Study of the Feasibility of Establishing an Informal Trading Centre at Paulpietersburg
Consolidated Report - August 2010
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The Site
Extent and location
The site identified for the shopping mall development lies approximately half way between
the town of Paulpietersburg and Dumbe township, a distance of only 2kms. Furthermore, it
is located on the western side of the connecting road, at the end of a T-junction intersection
between the R33 provincial road and the D1880 district road that leads eastward to
Bilanyoni, Klipspruit, Blinkwater andSchaapkraal (see map below). The geo-co-ordinates for
the site are 27°24'51.76"S and 30°49'26.79"E.
Site Location Map
DUMBE
PAULPIETERSBURG
THE SITE
TO BILANYONI, KLIPSPRUIT, BLINKWATER AND SCHAAPKRAAL
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Consolidated Report - August 2010
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Photographs of site
The site itself is undeveloped except for Mondi forestry activities (see below) comprising a
timber plantation. This will be cleared for the shopping centre development.
Site viewed from the east:
Site viewed from the west:
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Consolidated Report - August 2010
- prepared by Graham Muller Associates
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Market Area Demarcation
The nature of the road network and of the spread of household locations in eDumbe
Municipality means that the entire local municipality should be considered a potential
market for retail at the proposed site. There is only one tarred road from the rural
settlements to the east (the D 1880 district road) where the bulk of the population of
eDumbe Municipality reside, which connects to the main provincial road (R33) through
Paulpietersburg at a T-junction near to Dumbe Township. This is the location of the
proposed centre.
Target Market for SMMEs
Map 1.1 shows a grid representation of the eDumbe Municipality. Each grid is a 2.5km
square within which the number of households in that particular area is indicated.
According to the grid, the total number of households in eDumbe Municipality is 14,986.
Since the entire municipality is considered as potential market for retail, the total number of
households is a sum of all households in each grid. There are a larger number of
households close to major towns within the municipality, for example, 1,614 households in
Dumbetownship, 458 households in Paulpietersburg, 1,449 households in Bilanyoni and
Klipspruit and 1,382 households in Blinkwater and Schaapkraal.
The primary catchment area has been identified as the area in and around the eDumbe and
Paulpietersburg town centres which has a total of 2,289 households. Households in the
primary catchment area will have the greatest impact on the proposed shopping mall
development as they are located in and around the shopping centre site and close to the
proposed location of the informal trading centre. The secondary catchment area is the
larger area surrounding the primary catchment area with a total of 10,795 households.
Households outside the primary and secondary catchment areas are likely to spend
disposable income outside the demarcated area and thus will not have a discernable impact
on the proposed shopping mall development.
The informal trading area will be located between the shopping centre and the taxi rank and
will thus attract the same target market as the existing informal trading area in
Study of the Feasibility of Establishing an Informal Trading Centre at Paulpietersburg
Consolidated Report - August 2010
- prepared by Graham Muller Associates
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Paulpietersburg. This would include commuters travelling to their homes or to work, long
distance commuters and people looking for specific services offered by other informal
traders such as customers of hair salons, traditional medicine sellers and clothing vendors.
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Figure 1.4: Demographics of primary, secondary and outer catchment areas for year 2009
Source: Quantec Standardised Regional Database, 2009
2289
10795
3933
12204
57553
20969
1511
7125
2596
Primary catchment area Secondary catchment area Outer catchment area
Households Population Employed
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Map 1.1: Grid of number of households within eDumbe Municipality
Source: Eskom Household data
Note: The purple sectors indicate the primary catchment area and the green sectors indicate the secondary catchment area.
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Demographic Analysis
The demographic data for eDumbe Municipality is summarised in the table below. This data
will provide input for a demand analysis based on an assessment of the lifestyle and
spending patterns of households and their respective members within the catchment area
for the proposed shopping mall development.
Table 1.1: Demographic Analysis of eDumbe Municipality for year 2009
The total current estimated population for the
eDumbe Municipality market area: 90,726
The total number of households within the total
catchment area: 17,017 households
Growth rate in the number of households: 3,1 % per annum
The average number of persons per household: 5.33 persons
The weighted average gross annual income for the
catchment area: R 872,029,846
% of the population within the catchment areas
that are employed: 12.38%
Estimated annual household income of households
in catchment area: R 51,245 per household
All data is calculated using the Quantec Standardised Regional database and the number of
households surveyed by Eskom for the catchment area, as defined above.Demographic data
for each catchment area is outlined in the table overleaf. Households in the primary
catchment area are likely to experience the greatest benefit from the establishment of the
new shopping centre development and associated informal trading facilities.
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- prepared by Graham Muller Associates
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Table 1.2: Demographic analysis of catchment areas for year 2009
Catchment area Households Population % of population Gross income Employed
Primary 2,289 12,204 13.45% R 117,298,955 1,511
Secondary 10,795 57,553 63.44% R 553,185,766 7,125
Outer 3,933 20,969 23.11% R 201,545,125 2,596
Total 17,017 90,726 100% R 872,029,846 11,232
Source: Quantec Standardised Regional Database, 2009
Figure 1.5, below, provides an overview of household income in eDumbe Municipality. The
majority of the households in the municipality earn between R9,600 and R38,400 Randsper
annum, while 4,550 households earn less than R9600 Rands per annum, of which R795
households report no income at all. Only 15% (2,378) of the households earn more than
R38,400Rands per annum.
Figure 1.5: Household income in the eDumbe Municipality for year 2007
Source: Quantec Standardised Regional Database 2007
795
1403
2351
40563834
1356
590409
23
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Contextual Assessment of Retail Markets in Paulpietersburg
This section provides an overview of goods and services provided by informal traders. Most
traders currently sell fruits and vegetables with a small proportion selling clothes, shoes,
maize meal, cigarettes, mobile telephone airtime, snack crisps, sweets, cooked food,
medicine and herbs and ice cream.
Fruits and vegetables are either grown by the traders or bought in wholesale. The rest of the
traders sell a variety of products and services which are also sourced on a wholesale basis.
The turnover of most traders is less than a R100 a day, while a minority (26%) earn more
than a R100 a day.
Due to the convenience for traders and customers, most informal traders are located at the
main taxi rank in the centre of town in Paulpietersburg. The taxi rank is the busiest area of
town with the greatest level of footfall. Traders have a constant stream of people either
taking taxis or walking through the rank to go to the nearby Spar Supermarket and other
retail outlets. Most traders expressed the view that this was the best location for their stalls
as there is a lack of similarly busy areas in other parts of town. 44% of the traders choose to
be situated near a taxi rank as it is the busiest area in town.
Informal traders mainly sell fruits and vegetables, other food stuff and other goods. Two
separate stalls offered hair services especially for men. Customers from all over eDumbe
Municipality buy goods from the informal traders. Most customers are from Bilanyone,
Klipspruit, Blinkwater, Schaapkraal, Dumbe Township and Paulpietersburg, while a few
customers from Badeni, Mangusuthu, Johannesburg and Puzani also buy from the traders.
A few traders expressed a preference to be situated outside a supermarket, in central town
and near pension points, while a minority would prefer to be located outside a bank.
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The taxi rank currently only has 10 stalls for informal traders; however, more than a 100
traders sell their wares in and around the rank by constructing make-shift stalls.
Infrastructure provision within the informal trade area is extremely poor and the area is
neither properly cleaned nor is there access to water, electricity or sanitation. Demand for
informal trading has resulted in a large number of traders setting up on the pavement,
alongside queue areas and outside formal shops.
SMME Business Potential of the Site
In this section, the total market size for the various retail categories is calculated. The
demand analysis serves to analyse the total demand for goods and services in a region and
thus give potential investors an idea of the total market available to them by product in the
region.
There are 17,017 households in the market area. Below is a table outlining the final
consumption expenditure by households in the local municipality per year from 1995 to
2007. The average spend has been steadily increasing over the years.
Table 1.3 overleaf shows the amount of money available to be spent, on average, by
households on consumer goods within the Paulpietersburg area, assuming that the
households within the Paulpietersburg area share the same pattern of spending as the rest
of the district.
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Table 1.3: Final Consumption by households per year
Final Consumption expenditure by
households per year - Rands
1995 R 18,690
1996 R 20,555
1997 R 22,086
1998 R 22,929
1999 R 24,085
2000 R 26,259
2001 R 27,918
2002 R 31,094
2003 R 33,362
2004 R 36,593
2005 R 40,646
2006 R 45,287
2007 R 51,245
Source: Quantec Standardised Regional Database (current prices), 2009
Table 1.4: Total spending on Durable goods per household per annum for year 2007
Durable goods : Total Spend pa - Rands R 5,396
Furniture, household appliances, etc R 1,475
Personal transport equipment R 2,805
Recreational and entertainment goods R 604
Other durable goods R 512
Source: Quantec Standardised Regional Database (current prices), 2009
Total spending on durable goods per annum per household was R 5,396. More than half of
this spending was on personal transport equipment and a substantial portion was spent on
furniture and household appliances. Recreational and entertainment goods and other
durable goods only accounted for 20% (R 604) of the total spending on durable goods.
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Table 1.5: Total spending on Semi - Durable goods per household per annum for year 2007
Semi-Durable goods: Total Spend pa - Rands R 6,342
Clothing and footwear R 3,807
Household textiles, furnishings, glassware, etc R 1,085
Motor car tyres, parts and accessories R 942
Recreational and entertainment goods R 376
Miscellaneous goods R 132
Source: Quantec Standardised Regional Database (current prices), 2009
The above table outlines the total spending on semi-durable goods per household in the
area. Households spent 12% of their total income on semi-durable goods. Households spent
about 60% (R 3,807) of this income on clothing and footwear, 17% (R 1,085) on household
textiles, furnishings, glassware, etc., 15% (R 942) on motor car tyres, parts and accessories
and the remaining of their income on recreational goods and miscellaneous goods.
Spending on non-durable goods accounted for the largest portion of household incomes
(41%) with a large amount of income spent on food, beverage and tobacco products. This
large amount would typically be spent either in small spaza shops or the larger retail outlets
such as the Spar Supermarket, which is located close to the taxi rank in Paulpietersburg.
Table 1.6: Total spending on Non Durable goods per household per annum for year 2007
Non Durable goods : Total Spend per annum - Rands R 20,973
Food, beverages and tobacco R 13,627
Household fuel and power R 2,249
Household consumer goods R 2,140
Medical and pharmaceutical products R 508
Petroleum products R 2,056
Recreational and entertainment goods R 392
Source: Quantec Standardised Regional Database (current prices), 2009
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Table 1.7: Total spending on services per household per annum for year 2007
Services : Total Spend per annum - Rands R 18,533
Rent R 3,423
Household services, including domestic servants R 1,191
Medical services R 2,980
Transport and communication services R 4,323
Recreational, entertainment and educational services R 2,538
Miscellaneous services R 4,078
Source: Quantec Standardised Regional Database (current prices), 2009
A large proportion of total income spent by the average household in the catchment area is
attributed to spend on services (36%). Transport and miscellaneous services account for the
largest proportion spent on services, while household services such as domestic servants
accounts for a small proportion.
An overall review of the total amount spent by households per goods and service category is
listed below:
Table 1.8: Market Demand Analysis for year 2007
Market Demand analysis Rands per
household
No. of
Households
Potential Market Spend
per annum- Rands
Durable Goods R 5,396 17,017 R 91,825,368
Semi - Durable goods R 6,342 17,017 R 107,926,518
Non Durable goods R 20,973 17,017 R 356,894,011
Services R 18,533 17,017 R 315,383,949
Source: Quantec Standardised Regional Database (current prices), 2009
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The above table indicates that there exists a large potential market spend in the area. The
informal sector currently employs about 100 people. The new shopping centre is located
some distance away from the existing informal sector market and this will result in reduced
spend at informal trading stalls, risking causing about 100 people to lose their means of
livelihood. In order to maximise the benefit of the new shopping centre, it will be important
to provide for informal and formal trade areas in close proximity at the new development
site thus maximising synergy between both sectors. Most of the current income in the area
is spent in the formal trade centres and there exists very little integration between the
informal and formal sectors. The new development provides the opportunity to address this
deficiency. Also there are minimal facilities in the Paulpietersburg central business district
for the accommodation of SMME businesses such as mobile phone shops, tailors, second
hand clothing retailers, hairdressers, music and video retailers, appliance repair shops, hair
and beauty product outlets, carpenters and cooked food outlets. This is a serious deficiency
and needs to be addressed in the new development.
Research into Unfulfilled Trading Needs within the Community
A new shopping centre in the proposed site would be an obvious location for a new taxi
rank – long haul / short haul changeover would be perfectly placed (this is a critical
consideration and buy-in from the taxi owners is essential). The proposed shopping centre
site would provide the perfect place for a large, properly-serviced informal trading market
and SMME centre which supports both the fruit and vegetable sellers and provides a
platform for other entrepreneurs to expand their operations.
Due to the lack of electricity, limited access to water and lack of effective shelters, informal
traders have very few options in terms of tradable goods and services. If given the above
resources, traders would be able to provide services such as hot meals, tailoring and other
electricity dependant services that are currently missing at the informal trading centre.
Study of the Feasibility of Establishing an Informal Trading Centre at Paulpietersburg
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Our initial assessment would suggest that the following services would operate successfully
if located strategically between the taxi rank and the shopping complex at the development
site:
Mobile phone centres,
Small fresh produce outlets,
Hairdressers,
Cooked food vendors,
Meat vendors,
Tailors,
Clothes and shoes stalls,
Hair and beauty products for women (cosmetics, perfume, hair weaves),
Films and Music (DVDs, CDs), and
Toys.
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Constraints to SMME Business Development and Informal
Trading
In the project team’s survey of small businesses (SMMEs) it was found that these
entrepreneurs are often faced with greater challenges than larger businesses. These
challenges include access to markets, access to financing, skills and managerial expertise,
technology and adequate business infrastructure. These constraints are particularly
experienced in rural areas especially by women who struggle to support their families by
carrying out SMME activities and informal trade at small trading centres.
SMMEs struggle to succeed in small rural towns due to a lack of resources such as training
for management, skills workshops, access to technology and a major constraint is the lack of
finance to expand, set up or even just sustain a business. Most informal traders make less
than R200 a day and after factoring in costs such as stock and transport, traders are left with
no surplus funds to re-invest in their businesses. SMMEs and informal traders also lack
appropriate, relevant and important information and advice that assist them to operate a
successful and sustainable business. Without necessary funding, SMMEs are unable to
market their products aggressively thus hindering their success in introducing their products
to new markets. A major constraint to development of SMMEs is the lack of infrastructure
such as clean water, sanitation and electricity. This limits the number of services one can
provide resulting in over 20 traders selling homogenous products and offering similar
services.
Constraints faced by SMMEs include:
Transport infrastructure needs to be improved or developed
Lack of electricity
Upgrade of sewerage system is required
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Need for skilled workers
Limited funding and financial problems
Poor marketing
Easy availability of cheap imports (clothing and textiles)
Instability of petrol prices
Price increases due to economic conditions (inflation, interest rates, petrol prices)
Constraints faced by informal traders include:
Poor infrastructure such as transport, storage facilities, water, electricity, sanitation
and security
Lack of proper facilities to operate from
Lack of skills in order to diversify services offered
Lack of schooling sometimes resulting in illiteracy
Lack of finances or access to funding
High competition amongst traders as all trading similar or same products
Absenteeism as majority of the traders collect pension and other grants thus have to
remain closed during payout days
Rising prices
Low incomes
Insufficient funds to invest or expand in business
Lack of alternative trading facilities which offer better opportunities
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Additional Issues Identified in the SMME Survey
1. The status, needs and problems faced by SMME and informal sectors of the
economy in the study area
Currently there is a fairly significant informal economy in the study area and some
SMME activity, however these sectors do not fully achieve the potential of alleviating
poverty. Very little informal trading and SMME activity exists apart from that linked
to the taxi rank in the Paulpietersburg central business district (CBD).
Dumbetownship has copy shops, second hand clothing dealers and phone services.
By providing informal trading areas and SMME shops alongside a large retailer a
larger base of informal traders can be encouraged and will become more sustainable
and successful.
2. The vision, development concept and role envisaged for the site based on its
strengths and identified opportunities
Critical to the success of the a new shopping centre at theT-junction intersection
between the R33 provincial road and the D 1880 district road that leads eastward to
Bilanyoni, Klipspruit, Blinkwater and Schaapkraalis the need to attract a number of
compatible retailers who will draw customers to shop there in substantial and
sustainable numbers as an alternative to shopping at the Paulpietersburg central
business district, Piet Retief or Vryheid. The survey and interview feedback suggests
a supermarket similar to a large Spar such as exists in the Paulpietersburg central
business district is required. Spar’s existing presence in the municipality means that
this retailer has the distribution infrastructure in place to supply goods at the low
prices required to attract buyers. Clothing stores would be needed as well as a
building supplies store.
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The project team interviewed the manager of the Spar in the Paulpietersburg central
business district and his view is that Spar would take up space at the proposed new
shopping centre and would in all likelihood downgrade the existing Spar
supermarket in the Paulpietersburg central business districtto a smaller convenience
store.
The footfall this would create at the new site would support extensive SMME and
informal trade development. SMMEs interviewed raised the issue of the availability
of fuel service and banking facilities at the new site. These elements should be
considered crucial to a successful shopping centre mix as they will be vital attractions
drawing taxis and customers to the area. Taxi operators and businesses in the
nearby industrial area would also benefit from a fuel service station development.
3. Linkages between the site and other role players based on interfaces with and
integration with surrounding community
As the proposed shopping centre development is within easy walking distance of
Dumbetownship and the industrial area development at the proposed site will
reduce consumer spending on transport for shopping trips thereby increasing
spending power elsewhere in the local economy. The proposed site for the
shopping centre development is well positioned in that it is close to a variety of
roads that run through the area making general accessibility good.
4. Infrastructure for off-site and on-site services and including access and service
provision and management.
The assessment of the infrastructure required for proposed development is largely
positive. Phase 3 Electricity power cables run through the site and this is a
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bigadvantage. The area is serviced by the municipal water supply. Road access is
excellent due to its location alongside the tarred R33 provincial road, which is in
excellent condition. Other services such as refuse and sewerage will also be provided
by the municipality.
5. Guidelines for physical design and landscaping strategies for the site that will
enhance amenity and security
The site slopes away to the west from an initial section level with the R33 provincial
road and this will provide some challenges in site preparation. This may also cause
some drainage challenges, but nothing that is insurmountable. The site will need to
accommodate around 100 informal traders and 10 SMME shops as well as a taxi rank
for up to 20 taxis in addition to the formal shopping centre development.
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2. Survey Analysis
Introduction
In order to investigate and understand the nature of informal trade and SMMEs in
Paulpietersburg, Graham Muller Associates (GMA) undertook a series of surveys at the local
taxi rank and its surrounds where traders sold their wares and also in Dumbe township
where a fewer number of informal traders and SMMEs plied their trade. The main survey
was conducted on the 11th of November 2009 and consisted of a 2 page questionnaire used
to determine:
The types of goods sold,
Daily turnover,
Choice of location,
Improvements required, and
Other issues / suggestions.
The objective of the surveys is to understand the needs and thresholds of the informal
sector and SMME sector in and around Paulpietersburg.
Survey Area and Sample Size
Informal traders belong to a community of 17,017 households. The survey was conducted
primarily in and around the taxi rank in the central business district of Paulpietersburg
where most informal traders are located.
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Additionally informal traders and SMMEs near the clinic in Dumbe Township and in other
areas of Dumbetownship were surveyed. Facilities such as concrete tables for up to 10
traders currently exist both at the taxi rank in the central business district of Paulpietersburg
and near the clinic in Dumbe township (where there are also lock up facilities for SMMEs),
however the majority of the traders set up on individually supplied tables, crates or boxes
along the pavements in the area. Informal trade is the only source of income for around
100 traders in and around Paulpietersburg and provides a convenient and affordable option
for many residents who choose to shop at the informal trading stalls. Interviews were
conducted with a range of people, most of who were over the age of 18. Most interviews
were conducted with the help of a Zulu interpreter. A total of 133 traders were
interviewed in and around Paulpietersburg (List of traders provided in Appendix B).
Not surprisingly the project team found that the informal traders wish to be located in an
area that is conveniently located and busy and that will prove profitable to their business.
Table 2.1: Breakdown of products sold
Products Percentage traders selling the good
Fruit and vegetables 66%
Chips 14%
Other 13%
Telephone and airtime 8%
Clothes 7%
Cigarettes 5%
Sweets 5%
Cooked food 4%
Shoes 4%
Malt 3%
Hair services 3%
Maize Meal 3%
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Products Percentage traders selling the good
Medicine and herbs 3%
Ice cream 2%
More than half of the traders sell fruit and vegetables (66%) while a small portion of traders
sell other items such as mobile telephone airtime, cooked food, malt, maize meal and
clothes. A breakdown of the products sold is shown in Table 2.1, below. 89% of the traders
expressed a desire to additional products in addition to those they are currently selling.
47% of all products sold at the informal traders market comprise fruit and vegetables, while
snack crisps, telephone airtime and clothes comprise 10%, 6% and 5% of sales turnover
respectively.
Figure 2.1: Products sold
47%
10%
9%
6%
5%
4%
4%
3%
3%
2%2%
2%
2%1%
Fruit and vegetables
Chips
Other
Telephone and airtime
Clothes
Cigarettes
Sweets
Cooked food
Shoes
Malt
Hair services
Maize Meal
Medicine and herbs
Ice cream
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Breakdown of Earnings of Traders
More than half the traders made a daily turnover of under R100 while 26% indicated a
turnover of over R100. Many traders indicated that turnover varied according to the time of
the month with many customers spending more money towards the end of the month or
after pension payments, while the rest of the month saw little trade take place.
Table 2.2: Breakdown of daily turnover earned by traders
Daily turnover bracket (in Rands) Percentage of traders earning
within the respective bracket
0 – 50 28%
51 – 100 41%
101 – 150 14%
151 – 200 3%
200 + 9%
Figure 2.2: Traders earning within the following brackets
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0 – 50 51 – 100 101 – 150 151 – 200 200 +
Daily turnover (R)
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Assessment of the study results concludes that a thriving informal trade exists in the centre
of Paulpietersburg with more than a 100 traders active within and surrounding the central
taxi rank in Paulpietersburg. The taxi rank has designated stands for 10 traders. Demand for
informal trading area has seen trading activities spill over onto the surrounding pavements,
queue areas and outside formal shops in the vicinity. Infrastructure provision within the
informal trade area is extremely poor. The area is not properly cleaned, there is little access
to water, no access to electricity and there are no effective shelters to cater for inclement
weather conditions.
While conducting surveys, it was apparent that traders are unhappy with the conditions of
facilities but traded at the taxi rank as there was no other viable option for selling their
goods. Lack of shelter, chairs, tables and storage means that traders transport their goods,
chairs, umbrellas, etc. every morning using public transport and back again at the end of the
day. Most traders felt that the taxi rank was not busy enough and would prefer to be in a
location where there are a lot more people and proper facilities.
Vision, development concept and role envisaged for the site
based on its strengths and identified opportunities
A new shopping centre in the proposed site would be an obvious location for a new taxi
rank – long haul / short haul changeover would be perfectly placed (this is a critical
consideration and buy-in from the taxi owners is essential). The proposed shopping centre
site would provide the perfect place for a large, properly-serviced informal trading market
and SMME centre which supports both the fruit and vegetable sellers and provides a
platform for other entrepreneurs to expand their operations.
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Due to the lack of electricity, limited access to water and lack of effective shelters, informal
traders have very few options in terms of tradable goods and services. If given the above
resources, traders would be able to provide services such as hot meals, tailoring and other
electricity dependant services that are currently missing at the informal trading centre.
Our initial assessment would suggest that the following services would operate successfully
if located strategically between the taxi rank and the shopping complex at the development
site:
Appliance repairers
Mobile phone centres,
Small fresh produce outlets,
Hairdressers,
Cooked food vendors,
Meat vendors,
Clothes and shoes stalls,
Sellers of hair and beauty products for women (cosmetics, perfume, hair weaves),
Films and Music (DVDs, CDs), and
Toys.
It is the recommendation of the project team that an informal trading area with 100 stalls
and 10 formal shops should be planned at the proposed development site to account for
existing informal trade in Paulpietersburg that is likely to move to the new site. See
Feasibility model for further discussions of this.
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Alignment and Coordination of the Relationship between the
First Economy and the Second Economy in Paulpietersburg and
the Impact of the Existing Shopping Infrastructure on Current
and Potential SMME’s and Informal Traders
Informal traders are heavily reliant on the footfall of shoppers resulting from the proximity
of the taxi rank and of people who also work in Paulpietersburg shopping in
Paulpietersburg. A new shopping centre in the proposed site would be an obvious location
for a new taxi rank – long haul / short haul changeover would be perfectly placed (this is a
critical consideration and buy-in from the taxi owners is essential).
The proposed shopping centre site would provide the perfect place for a large, properly-
serviced informal trading market and SMME centre which supports both the existing
informal traders and provides a platform for other SMME entrepreneurs to expand their
operations should they find the opportunity. The existing shopping infrastructure at
Paulpietersburg is inadequate to meet the needs of the large population of eDumbe and
currently people shop outside the municipality (at Piet Retief or Vryheid) for many of their
needs. The proposed shopping centre will have more than 20 000 square metres of
shopping space and will cater much more adequately for the needs of the population of
eDumbe Municipality. This would include:
Super Spar - currently Paulpietersburg has a small Spar
Banks – it was observed during the survey phase that banking options are extremely
limited in Paulpietersburg and a hindrance to both formal and informal trade growth
A building supplies outlet
Fast food outlets
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Clothing stores
Furniture stores
Cellular phone outlets
These shops would provide Paulpietersburg with the critical mass attraction to bring a large
number of shoppers to the mall and by placing the taxi rank and informal trade area
alongside the mall it would allow informal traders access to a much larger potential market.
Registration and Skills Training for Informal Traders
Registration of all informal traders and the sustained paymentof rentalsis pertinent. This
action gives permission to operate, and provides access to servicesand support. Simplifying
existing registration procedures and moving towards theone-stop centre concept can
reduce costs. Data on registration can be kept in a centralised inter-departmental
information system, which will link where traders are,the sectors they work in, with
registration, rent-paying status, environmental healthand the enforcement function.
Economic growth in the informal trading sector will need to be facilitated through:
Linking the development and growth of trading areas to commercial zones in order
to create viable hubs of business activity that mutually benefit formal and informal
businesses.
Providing a range of facilities, capacity building and business support services that
cater for the different levels of traders, from the weekly Saturday trader and small
survivalist trader to larger traders.
Ensuring that the buildings and property owned by the municipality are used for
themaximum social and economic development of the community within which
theyare located.
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Targeting highly accessible and visible locations for the promotion of
touristrelatedtrading in order to derive benefit for informal traders from the
tourismpotential.
Currently no partnerships exist to promote skills training for informal traders; however such
partnerships are key for the sustainability of informal traders and SMMEs in
Paulpietersburg. In most cases, SMMEs and informal traders are unable to expand or
succeed mainly due to a lack of skills and proper business knowledge. Proprietors lack
formal training on how to run a business effectively and efficiently. The best approach to
tackle these issues would be to set up local partnerships with businesses and training
institutions who are willing to fund programmes and teach the basic skills to traders who
will qualify even with no formal experience. Such partnerships currently exist in Alexandra
and the city of Cape Town, where traders receive NQF certificates accredited by the relevant
SETA in which they operate e.g. Food and Beverage SETA.
Generic business services can assist less sophisticated businesses to run more efficiently and
to mature (i.e. grow in size, revenue and sophistication). These mayinclude:
Business literacy skills and training development;
Provision of advice, information and business counselling;
Provision of management or appropriate technical training, including financial
management;
Provision of marketing and market development services.
External sources can provide sector support and play a number of creative roles in providing
for example:
Economically trained sector specialists for those sectors where large numbers of
traders operate or where growth prospects are more positive.
Training in general business skills
Health education with regard to the handling of food for sale.
Legal advice about small business development
Subsidisation of selected training providers
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Co-operation with formal business.
Facilitation of access to financial services.
Informal traders and SMMEs are a large contributor to the economic wellbeing in the
municipality and it is necessary to sustain small businesses and traders for further
development in the municipality. Registration and skills training can be supported by the
local municipality while informal traders pay a nominal monthly fee of R10 per stall. This
amount is based on discussions with the Informal Traders Association who agreed that they
would continue paying the R10 fee currently charged to them.
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Linkages between the Site and Other Roleplayers based on
Interfaces With and Integration with the Surrounding
Community
Customers at the informal trading stalls in the Paulpietersburg central business district
typically travel from Bilonyone, Klipspruit, Blinkwater and Schaapkraalas well as from
eDumbetownship and from within Paulpietersburg itself. Instances of shoppers from far
afield as Johannesburg and Puzani were also noted by the surveyors. The majority of
shoppers come from Bilanyone, Klipspruit, Blinkwater, Schaapkraal, Dumbe and from within
Paulpietersburg.
Table 2.3: Areas where customers live
Area % of traders supplying to customers from
respective region
Bilonyone,Klipspruit, Blinkwater, Schaapkraal 83%
Dumbe 70%
Paulpietersburg 48%
Badeni 10%
Mangusuthu 4%
Johannesburg 2%
Puzani 1%
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Figure 2.3: Areas where customers live
34% of the traders chose their current location due to its proximity to the taxi rank. (This
may be severely understated as many of the responses which were ‘Lots of customers’
could be based on the presence of the taxi rank).
Table 2.4: Reason for choosing current location
Reason for choosing current location No. of traders choosing location
Taxi rank 43
Customer base 5
No other options 9
Lots of customers 44
Local Customer support 4
Convenience 9
Supermarket 14
83%
70%
48%
10%
4%2% 1%
Bilonyone eDumbe PPB Badeni Mangusuthu Johannesburg Puzani
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Figure 2.4: Reason for choosing current location
18% of the traders compete with local supermarkets and 82% of the traders compete with
other traders. Most traders sell identical goods and so prices tend to be the same.
Customers rather choose to buy from traders they have a personal relationship with.
79% of the traders expressed a desire to relocate to a different location, 43% of which
wanted to move to the proposed new development at the new site near Dumbetownship as
they believe that new taxi rank will be busier than the current taxi rank due to its proposed
central location between eDumbe and Paulpietersburg town and at the
intersectionbetween the R33 provincial road and the D1880 district road that leads
eastward to Bilanyoni, Klipspruit, Blinkwater and Schaapkraal.
34%
4%
7%
34%
3%
7%
11%
Taxi rank
Customer base
No other options
Lots of customers
Local Customer support
Convenience
Supermarket
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Figure 2.5: Major competitors
Table 2.5: Factors upon which sales depend
Factor Percentage of traders whose business depends on respective factor
Taxi Rank 88%
Supermarket 79%
Town 77%
Pension Point 52%
Bank 46%
88% of traders prefer to be located near a taxi rank, 79% near a supermarket while 52%
prefer a pension point which occurs monthly.
Supermarket18%
Other traders82%
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Figure 2.6: Factors upon which sales depend on
88%
79%77%
52%
46%
Taxi Rank Supermarket Town Pension Point Bank
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Guidelines for physical design and landscaping strategies for
the site(s) that will enhance amenity and security
Facilities at the taxi rank are minimal and most traders improvise using crates or boxes as
tables to set up their goods. There are currently about 10 concrete trade tables, but there
are no storage facilities. Traders have no chairs, shelter, sanitation and cleaning services.
Lack of electricity limits the goods that traders can sell as they are unable to operate fridges
or machines.
Table 2.6: Breakdown of traders’ desire for better facilities
Facility
% of traders who desire the respective facility
Shelter 84%
Tables 69%
Chairs 68%
Storage 41%
Electricity 41%
Water 25%
Toilets 25%
More space 22%
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Figure 2.7: Percentage of traders who desire the following facilities
Only 8% of traders had been offered other facilities at another location but chose to sell their goods at the taxi rank due to the foot traffic.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Shelter
Tables
Chairs
Storage
Electricity
Water
Toilets
More space
Other
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3. Feasibility Model
The Case for an Informal Trading Centre at Paulpietersburg
The assessment by the study team of informal trade in the Paulpietersburg area is discussed
in detail in two previous reports (the Situational Analysis Report and Survey Results Report)
reveals the size and growth potential of the retail sector and of and the informal trading
sub-sector in eDumbe Local Municipality. This analysis was applied to the specific site to
test the case for the development of an informal trading centre and taxi rank adjacent to a
proposed planned large formal retail shopping centre ay the T-junction of the R33 provincial
road to Piet Retief and the D1880 district road east to Bilanyoni, Klipspruit, Blinkwater and
Schaapkraal.
The conclusion of the situational analysis and survey analysis is that a large population
(nearly 100,000 persons) will shop for a significant proportion of their regular monthly
purchases at a retail shopping centre at the proposed site. Planning of this development is
underway and whilst there is still some uncertainty over the tenant-mix and size of the
centre, there is little doubt regarding the potential success of the proposed development.
The survey of informal traders and SMMEs by the study team revealed the reasons why
traders presently locate at the taxi rank in the Paulpietersburg central business district. This
is because this area enjoys a high footfall of commuters and travellers either boarding or
disembarking from taxis or changing taxis. The location of the taxi rank close to established
formal retail outlets and sources of employment and the changeover of passengers between
long haul and short haul taxis was key to this. 34% of the traders chose their current
location due to its proximity to the taxi rank. (This may be severely understated as many of
the responses – 34% which were ‘Lots of customers’ could be based on the presence of the
taxi rank).
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The new retail centre at the proposed site is also predicted to attract a large number of
people, commuters and taxis. It is also likely that, provided appropriate facilities are
provided, long haul taxis will use the centre as a terminus, as it is located close to Dumbe
township approximately half way between the town of Paulpietersburg and to the entrance
to Dumbe township, a distance of only 2kms. 79% of the traders expressed a desire to
relocate to a different location, 43% of which wanted to move to the proposed new
development at the new site near Dumbe township as they believe that new taxi rank will
be busier than the current taxi rank due to its proposed central location between eDumbe
and Paulpietersburg town and at the intersection between the R33 provincial road and the
D1880 district road that leads eastward to Bilanyoni, Klipspruit, Blinkwater and Schaapkraal.
Furthermore, it is located on the western side of the connecting road, at a T-junction
intersection between the R33 provincial road and the D1880 district road that leads
eastward towards Bilanyoni, a cluster of rural settlements with limited retail and social
facilities, but that is home to 2,831 households in Bilanyoni, Klipspruit, Blinkwater and
Schaapkraal. The geo-co-ordinates for the site are 27°24'51.76"S and 30°49'26.79"E.
It is the recommendation of the project team that an informal trading area with 100 stalls
and 10 formal shops should be planned at the proposed development site to account for
existing informal trade in Paulpietersburg that is likely to move to the new site. 100 stalls
would be able to accommodate the traders who are willing to move to this new location
currently trading at the taxi rank as well as new traders looking to set up in the area. Traders
may also be attracted to the new location as most traders interviewed expressed a desire
for better facilities with proper shelter, chairs, tables, storage, water and electricity. 10
formal shops will provide an opportunity to traders willing to expand their business as they
are currently limited to trade in small stalls.
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A key question is what will the effect of this new centre be on the more than 150 informal
economy traders currently operating in Paulpietersburg and Dumbetownship?
In the case of the informal traders operating in the Paulpietersburg town centre, there is
some concern that the development of a shopping centre will crowd out (or eliminate) an
already established informal economy. Current experience in and around the taxi rank in
the town centre suggests this fear is unwarranted. The more likely case in this situation is
that the development of a new shopping centre will draw informal economic activity to
locations near to it.
The sustainability of informal trade does, however, depend on the specific situation in
Paulpietersburg. For example, if informal traders are selling products that are not available
at the shopping centre, crowding out is not likely to occur. However, if the formal retailer is
able to offer more convenient hours or credit services, this could draw consumer spending
away from the informal sector (Altman, 2008: 10).
In South Africa, employment in the informal sector appears to have grown by 1.1 million
jobs between 1997 and 2005 (Altman, 2008: 14). However, this could be a result of the
improvements in data collecting and statistics, as well as an increase in global integration,
which has stimulated a growth in informal employment (Valodia, 2006: 7).
What is also unclear is whether the growth in the informal sector is from growth in the
wider economy (positive growth in the formal sector correlated with positive growth in the
informal sector), or a survival strategy as the number of unemployed people rises (a collapse
of the formal economy, or a highly regulated environment induce firms to operate in the
informal sector, both of which lead to falling employment in the formal sector).
Valodia (2006: 7) argues that informal employment in South Africa “tends not to be
voluntary” (in other words, it is not as a result of regulations and high tax rates), but rather
is a survival strategy for the unemployed. According to Valodia (2006: 7) “growth in the
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formal sector will (then) lead to higher levels of labour migration from the informal sector to
the formal sector”.
It is unclear whether this will be the case in Paulpietersburg, as the outcome depends on the
specific reasons why people in Paulpietersburg are engaged in informal economic activity.
However, whether the informal sector in Paulpietersburg has developed due to an increase
in formal economic activity or a decrease in informal economic activity, it can be expected
that the proposed shopping centre will attract informal trading activity to the site of the
centre. Indeed, even in more developed economies, the growth of formal economic activity
never completely supplants informal economic activity (Altman, 2008: 9).
The evidence in South Africa and in Paulpietersburg specifically, is that most informal
traders are survivalists, and so the new development should support growth in the informal
sector so as to bring about a net increase in employment based on informal trading
activities in the area surrounding the new development once the new shopping centre is
open for trade.
The development of the shopping centre should be seen as an opportunity to encourage
growth in the informal sector and support the local economic development objectives of
both eDumbe Local Municipality and the KwaZulu-Natal Department of Economic
Development and Tourism.
The role of the developer of the trading centre is one of a private profit seeking enterprise
and not one whose interest lies in supporting informal traders. However the developer does
recognize that their development will attract some form of informal sector activity to the
surrounding areas.
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Informal Trading Centre Development
There is both a desire from the existing informal sector traders for better facilities and a
desire by municipal and provincial government to encourage informal traders and facilitate
their success. This suggests that an informal trading should be built in the vicinity of the
proposed shopping centre site.
Municipality approves shopping centre
DEDT sees opportunity for informal trade and appoints
GMA as service provider
GMA project team conducts research and suggests way
forward
GMA project team provides plan to include in an overall
centre and precinct plan
GMA project team interacts withkey relevant stakeholders
eDumbe Local Municipality
Informal Traders
Taxi Operators
DEDT
Shopping centre approval agreed in principle with the
private sector developer
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Existing informal trading inPaulpietersburg and Dumbe
Township
The taxi rank in Paulpietersburg central business district (CBD) is the base for most traders
who mostly set up crude stalls using tables, crates and boxes. Other traders in the area
locate outside the nearby hospital and at a school.
In Dumbetownship our site visit revealed very little informal trading activity. Although
facilities for informal trading are better in Dumbetownship than in Paulpietersburg CBD,
they are not very well utilised, with many stalls and SMME shops lying unoccupied. The
pictures below give an overview of the situation.
The taxi rank in the Paulpietersburg central business district
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Unoccupied and closed up SMME shops at Dumbe Township taxi rank
One of the few SMME shops occupied in Dumbetownship (selling hot fried chips with
accompaniments)
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Partly occupied informal trading stalls in Dumbetownship
The reasons cited for lack of take-up of existing SMME and informal trading infrastructure in Dumbetownship is insufficient footfall at the
locations where these facilities have been constructed. This serves to emphasise the critical need to ensure that a high volume of
potential shoppers will be attracted to move through the proposed development site before the planned developments is initiated.
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The Vision, Development Concept and Role Envisaged for the
Paulpietersburg Site Based on its Strengths and Identified
Opportunities
A critical aspect of the proposed informal trading centre development is that it will be
located alongside a planned large formal retail shopping centre attraction. This centre, well
situated within walking distance of Dumbe township, and close to central Paulpietersburg
and the neighbouring industrial precinct. It is thus perfectly located to attract a large
number of customers. Additionally it is located at the T-junction of the R33 provincial road
between Paulpietersburg and Piet Retief and the D1880 district road to Bilanyone,
Klipspruit, Blinkwater and Schaapkraal and is close to (within easy walking distance of) the
majority of the population of eDumbe Local Municipality, that comprises 1,614 households.
The site is also within walking distance of the hospital at Dumbe, a major employer, and
Paulpietersburg Industrial Area where further significant employment occurs with attendant
spending power. The proposed new shopping centre will be the closest major retail facility
to Dumbetownship, the Paulpietersburg Industrial Area, as well as to Bilanyone, Klipspruit,
Blinkwater and Schaapkraal. This junction is a natural meeting point and obvious location
for the proposed development. The junction will draw traffic to a well located taxi rank
with good facilities and associated informal trading activities can be expected to develop
naturally at the site if planning permission is granted and appropriate facilities provided.
The vision for the development is therefore to develop a trading area between a taxi rank
and closely integrated with a major formal private sector funded shopping centre. Such a
taxi rank would, in any case, be required for the formal private sector funded shopping
centre itself.
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Such a facility can be expected to encourage and enhance opportunities for informal trading
and local economic development through attracting a large footfall of consumers to the
area, whilst providing facilities that enhance the ability of informal traders to operate
successfully and increase and expand their businesses will further guarantee the success of
such ventures.
As was determined in the survey undertaken by the study team of the informal and SMME
sector, the traders themselves have requested facilities such as sheltered stalls, water,
electricity and lock up storage bins in a convenient trading area adjacent to a taxi rank are
and on the pedestrian route between the taxi rank and the main shopping centre.
Linkages between the Site and other Roleplayers
As mentioned above, the interface with the taxi rank and the trading centre will be the key
element in the success of the proposed informal trading area. The location of the proposed
development at the T-junction between the R33 provincial road and the D1880 district road
to Bilayoni, Klipspruit, Blinkwater and Schaapkraal gives the site a clear advantage over
other alternative sites. The site is within walking distance of Dumbetownship, the hospital
and the industrial area of Paulpietersburg, all major sources of spending power in the
municipality.
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Development of an Institutional Matrix for the Proposed
Informal Trading Centre
Key institutional players that will be called upon to support this development include:
Local and District Municipalities
The primary role of local government (with government support) will be to establish an
environment conducive to attracting local informal and SMME investment at the proposed
informal trading centre.
This can be achieved through:
The efficient processing of development applications submitted in terms of the 2008
KZN Planning and Development Act;
Contributing funding towards the development of public spaces and public use
areas;
Upgrading the urban environment and specifically transport infrastructure (roads,
pavements, taxi ranks etc);
Encouraging and supporting the development of residential areas around Dumbe
township and specifically promoting the development of middle income housing;
and
Facilitating other forms of development in the Paulpietersburg area, including
private and public sector investment.
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The eDumbe Local Municipality can draw on the skills and resources of the Zululand District
Municipality of which eDumbe Local Municipality forms a part.
Assessment of Capacity:The eDumbe Local Municipality has been actively involved in the
feasibility assessment process and key staff members of the municipality have
demonstrated the capacity and the willingness to participate in making this development a
success. Engineering staff of the District Municipality are available to assist with more
specific issues relating to engineering services; and
A Development Planning Shared Service has been established in the Zululand District
Municipality, based in Ulundi aimed at supporting local municipalities that belong to the
Zululand District during the introduction of the 2008 KZN Planning and Development Act.
The KwaZulu-Natal Department of Economic Development & Tourism
The Department of Economic Development, together with the eDumbe Municipality,
initiated the project and have to date provided a facilitation role, both in terms of making
available funding and human resources. In discussions with the Department to date
indications have been that in terms of the provincial trading centre programme “deserving”
developments may qualify for further support from the Department.
Assessment of capacity: The Department of Economic Development has managed and
participated in the feasibility assessment process to date and has illustrated a strong
capacity to deal with projects of this nature. Projects focussing on implementation are also
being managed by the department, which is also a potential source of funding for projects
of this nature with a significant bias towards local economic empowerment.
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Existing Paulpietersburg and Dumbe Township Informal Traders and SMMEs
Existing business owners in the Paulpietersburg and Dumbe Townshipareas stand to benefit
both directly and indirectly from the establishment of a trading centre at the proposed site.
If not appropriately managed the trading centre could, however, impact negatively on
existing businesses and care should be taken to avoid this. It is therefore important that
local businesses are involved in and understand the process towards the establishment of
the trading centre at the proposed site.
Local business owners should also be encouraged to:
Take up space in the proposed development; and
Negotiate arrangements for benefitting from bulk buying.
Assessment of Capacity:Existing informal traders have been closely consulted during the
planning process, primarily, as this was their wish, through the Paulpietersburg Informal
Traders’ Association. Representatives from the traders’ association have participated fully
in the process having jointly identified three representatives for attending the project
steering committee meetings.
Funding Institutions (Provincial Government)
Due to the non-commercial nature of this project there are very few funding agencies
available to provide capital funding and for developments of this nature. The most
promising source of funding is the KwaZulu-Natal Department of Economic Development
and Tourism in partnership with the eDumbe Municipality, itself.
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As the municipality is the current land owner and informal trading centres are not
traditionally regarded as private sector investments, we recommend that the land on which
the informal trading centre and adjacent taxi rank are developed remain under the
ownership and control of eDumbe Local Municipality.
The institutional matrix on the following page summarises the key issues, responsibilities
and funding responsibilities implicit in such an institutional arrangement. Although capital
funding of the informal trading centre and taxi rank is the responsibility of the eDumbe
Local Municipality, it is envisaged that the funding will, in reality be provided by the
KwaZulu-Natal Department of Economic Development and Tourism or some alternative
source of development capital funding.
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INSTITUTIONAL MATRIX
Issue Responsibility Funder*
Capital Funding eDumbe Local Municipality KwaZulu-Natal Dept. of Economic
Development and Tourism or alternate
Safety and security
eDumbe Local Municipality will pay for security for the
centre and taxi rank eDumbe Local Municipality
Health and waste management
eDumbe Local Municipality will collect all waste and pay
for municipal cleaners or a sub-contractor to clean at
the site
eDumbe Local Municipality
Maintenance of facilities
Trading centre management will maintain the facilities
and will access the funds account held by eDumbe Local
Municipality for this purpose
eDumbe Local Municipality
The synergy and coordination
between the community and on-
going operational activities
A trading centre management committee consisting of
the taxi owners’ association, informal traders’
association, Property Solutions shopping centre
management and KZN DEDT and municipal officials will
liaise over issues relating to the community
eDumbe Local Municipality
Environmental management
eDumbe Local Municipality is responsible for monitoring
the environmental health and integrity of the site eDumbe Local Municipality
Relationships with relevant organs of
state
eDumbe Local Municipality is responsible for liaison with
relevant organs of state eDumbe Local Municipality
*to help offset the costs of the funding responsibilities of eDumbe Local Municipality, it is envisaged the levies at an affordable cost will be
paid by the informal traders and the taxi association for use of the trading facilities and taxi rank. This is based on discussions with the
Informal Traders Association where they agreed to continue paying an affordable R10 monthly rental fee.
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Infrastructure for Off-Site and On-Site Services and Including
Access and Service Provision and Management
SCOPE OF PROJECT
1. Taxi rank for 20 taxis including access roads.
Area of taxi rank is 200 m² covered area with road under, pedestrian area in
the centre for safe loading.
2. 100 Stalls each 2 m x 1 m wide
3. 44 m² Office block with toilets
4. 10 Shops each 4 m x 3 m wide
5. Paving on both sides of stalls and shops
6. Water taps at every 20 m with gulley
7. Landscaping as necessary
8. External lighting etc
ESTIMATE
The estimate has been based on the above areas and has been prepared on the
superficial area and rough quantities method.
ASSUMED PROGRAMME
For the purpose of planning the project and calculating escalation, the following
programme has been assumed :-
Date of this Budget Estimate No. 1 9 April 2010
Out to Tender Week 6
Tender Return Week 7
Tender Report Week 8
Tender Approval Week 10
Building operations commencement Week 12
Building operations completion Week 33
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ESCALATION
Escalation assumptions have been made as follows :-
Escalation before tender :
From estimate 19th April 2010 to tender date 11th June 2010
Escalation during construction :
From building contract date (CPAP - Haylett)
From building tender date 11th June 2010 @ 0.28% per month including a 0.7 (factor) for
cash flow until completion
VALUE ADDED TAX
Value Added Tax at 14% has been included.
SPECIFICATIONS
1. The specification assumed for the Informal Trading Stalls is of a concrete and
face brickwork structure with metal roof over
2. The electrical will be for supply to all stalls, shops and street lighting
3. Area around stalls and shops to be paved with brick paving
4. Office and toilets to be hard wearing finish
5.
Shops to be of brickwork with faced walls externally and plaster and painted
internally
6. Standpipes are to be supplied every 20 m with gulley under
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EXCLUSIONS
1. Any furniture and loose fittings
2. Unforeseen foundation problems
3. Any individual shop fittings
4. Any cooking equipment and other trading specific equipment
5. The taxi rank will cost an additional R619 000 not included in the
costing below as it would need to be built whether the informal trading
facilities are built or not.
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SUMMARY
1 100 INFORMAL TRADERS' STALLS
R2,038,000.00
2 OFFICE BLOCK AND TOILETS
R308,000.00
3 10 SHOPS
R480,000.00
4 EXTERNAL WORKS
R202,000.00
5 SOIL DRAINAGE
R25,000.00
6 STORMWATER DRAINAGE
R 75,000.00
7 SITE LIGHTING
R60,000.00
8 LANDSCAPING
R100,000.00
9 ELECTRICAL CONNECTION AND SUPPLY
R50,000.00
ESTIMATED BUILDING COST (excl VAT)
R3,338,000.00
ESCALATION
Before tender
R97,000.00
During construction
R58,000.00
R155,000.00
R3,493,000.00
10 VAT @ 14%
R489,000.00
ESTIMATED BUILDING COST (incl VAT)
R3,982,000.00
ESTIMATED PROFESSIONAL FEES
Total Professional Fees
Architect R297,000.00
Quantity Surveyor R222,000.00
Electrical Engineer R31,000.00
Structural Engineer R134,000.00
Safety Consultant R16,000.00
R700,000.00
Disbursements
R150,000.00
Plans Approval
R50,000.00
R900,000.00
VAT @ 14%
R126,000.00
ESTIMATED FEES
R1,026,000.00
TOTAL PROJECT COST
R5,008,000.00
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100 INFORMAL TRADERS' STALLS
DOUBLE STALL
1.
Foundations
R7,300.00
2.
Ground Floor Construction
R600.00
3.
Counter Slab
R2,800.00
4.
External Walls
R5,500.00
5.
Roof
R6,100.00
6.
Door
R1,500.00
7.
Floor finishes
R100.00
8.
Internal Wall Finishes
R600.00
9.
Slab Finishes
R700.00
10.
Electrical Installation
R2,200.00
R27,400.00
x 50
TOTAL VALUE FOR 50 DOUBLE STALLS
R1,370,000.00
11.
Plumbing Installation
R28,700.00
12.
Fire Protection
R43,700.00
13.
Soil Drainage
R43,500.00
14.
External Paving
R155,600.00
15.
Bin Washing Area
R5,300.00
R1,646,800.00
16.
Preliminaries
R205,900.00
R1,852,700.00
17.
Contingency 10%
R185,300.00
R2,038,000.00
18.
ESCALATION
R95,100.00
Before tender
R59,400.00
During construction
R35,700.00
R2,133,100.00
19.
VAT @ 14%
R298,600.00
ESTIMATED COST
R2,431,700.00
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Operational costs, per annum, below are estimated as follows:
An informal trading centre management fee for handling monthly meetings, such as
the cost of snacks, and other minor expenses.
The LED Officer for eDumbe currently oversees the informal trading area at the taxi
rank in Paulpietersburg and it was decided that appointment of a new manager will
not be necessary as the LED officer will manage the centre thus no management fee
is attached.
Cleaning staff to clean up on a full time basis, this will be handed by the Informal
Traders Association as agreed in with the representatives of the association in the
steering committee meetings. Although individual stall holders will be responsible
for cleaning their stalls, litter and other rubbish will need to be collected and bins
emptied. Furthermore toilets will need to be cleaned.
Two security personnel will be employed to guard the centre at night. These costs
will be on a per shift basis.
Maintenance of the gardens surrounding the informal trading centre will be minimal,
and a small budget is allowed for monthly gardening duties
Maintenance and servicing of the building, to avoid depreciation
The electricity bill
The cost of insurance on the building and other facilities
Other costs to cover ad hoc extraneous expenditure that do not fit into the above
categories
Project Implementation and time frames
The implementation of the project can only take place once construction of the shopping
mall is underway. The success of the shopping centre and trading area are intrinsically linked
thus both will need to be operational simultaneously. It is expected that the trading centre
Study of the Feasibility of Establishing an Informal Trading Centre at Paulpietersburg
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will become operational three months after construction begins. Informal Traders would be
likely to move into the site once the shopping centre is operational.
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Financial Model
Table 3.1: Cash flow for Paulpietersburg Informal Trading Centre
Cash flow for Paulpietersburg Informal Trading area
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Rental Returns from 10 Shops R 24,000 R 25,200 R 26,460 R 27,783 R 29,172 R 30,631 R 32,162 R 33,770 R 35,459 R 37,232
Informal Sector Fees R 12,000 R 12,960 R 13,997 R 15,117 R 16,326 R 17,632 R 19,042 R 20,566 R 22,211 R 23,988
Taxi Operators Usage Rental R 12,000 R 12,600 R 13,230 R 13,892 R 14,586 R 15,315 R 16,081 R 16,885 R 17,729 R 18,616
Total Rental Income R 48,000 R 50,760 R 53,687 R 56,791 R 60,084 R 63,578 R 67,286 R 71,222 R 75,400 R 79,836
Operational Costs
Centre Management R 5,400 R 5,670 R 5,954 R 6,251 R 6,564 R 6,892 R 7,237 R 7,598 R 7,978 R 8,377
Security R 36,600 R 38,430 R 40,352 R 42,369 R 44,488 R 46,712 R 49,048 R 51,500 R 54,075 R 56,779
Gardens R 2,400 R 2,520 R 2,646 R 2,778 R 2,917 R 3,063 R 3,216 R 3,377 R 3,546 R 3,723
Service and Building Maintenance R 21,000 R 22,050 R 23,153 R 24,310 R 25,526 R 26,802 R 28,142 R 29,549 R 31,027 R 32,578
Electricity R 22,000 R 23,100 R 24,255 R 25,468 R 26,741 R 28,078 R 29,482 R 30,956 R 32,504 R 34,129
Insurance R 4,800 R 5,040 R 5,292 R 5,557 R 5,834 R 6,126 R 6,432 R 6,754 R 7,092 R 7,446
Other R 23,230 R 24,392 R 25,611 R 26,892 R 28,236 R 29,648 R 31,130 R 32,687 R 34,321 R 36,037
Total Operational Costs R 115,430 R 121,202 R 127,262 R 133,625 R 140,306 R 147,321 R 154,687 R 162,422 R 170,543 R 179,070
Net Income/loss -R 67,430 -R 70,442 -R 73,575 -R 76,834 -R 80,222 -R 83,743 -R 87,401 -R 91,200 -R 95,143 -R 99,234
The trading centre will require ongoing financial support from the eDumbe Local Municipalityof between R160,000 and R250,000 per annum
over the first ten years of operation.
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Risk Identification, Assessment and Mitigation
The clear identification of potential risks to the trading centre development proceeding
smoothly allows for contingency planning to be undertaken. This section focus on
identifying major risks to the successful completion and operation of the informal trading
centre development at the proposed site at the T-junction of the of the R33 provincial road
to Piet Retief and the D1880 district road west to Bilanyoni, Klipspruit, Blinkwater and
Schaapkraal.
In matrix on the following pages the project team:
Describes potential risks;
Identifies approaches to the mitigation of the risk or alternative approaches to be
considered;
Rates the likelihood of the risk impacting on the development; and
Rates the potential impact should the potential risk be realised.
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Risk Description Mitigation / Alternatives Risk Rating
Likelihood Impact
External Risks or threats
Upgrading of major
access roads
The upgrading of the R33 to provide a
dedicated turning lane for south bound
traffic using the R33 to easily access the
proposed development site.
Widening the road to provide an extra turning
lane will allow easy flow of traffic if funding
for a full upgrade the upgrade is not available.
Low Major
Risks relating to the development of the node
Inability to maintain an
adequate level of local
government service
provision to the
proposed development
site.
The feasibility of the development is
dependent on the highest possible
number of shoppers being attracted to
the proposed development site. The
taxi rank proposed for the site is a
potentially important magnet attracting
additional footfall.
In the absence of development of the taxi
rank being funded and developed by the
private sector developer of the proposed
formal shopping centre development, steps
must be taken by the municipality and
provincial government to develop this critical
infrastructure at the proposed site.
High Major, if
adequate
footfall is to
be attracted
to the site.
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Risk Description Mitigation / Alternatives Risk Rating
Likelihood Impact
Risks relating to the development of the node (continued)
Lack of coordinated
development at the
proposed site.
Ad hoc development of facilities and
infrastructure at the site has an adverse
medium to long term impact on the
functioning of the development as. This
will impact negatively on investment as
a whole.
A development plan for the proposed
development site must be prepared by the
municipality to ensure that planning of the
three key components, the formal shopping
centre, the informal trading centre and the
taxi rank are successfully co-ordinated.
High Major
Rural incomes decline
reducing the
disposable income
A range of factors may impact on
income levels in rural levels declining
further, including increasing
unemployment levels, difficulties in
accessing pension payments and other
social grants, and drought.
The municipal LED plan should include the
planned development of the entire catchment
area and corresponding LED plans need to be
developed to support sustained and
continuing growth in disposable incomes in
the area.
Possible Major
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Risk Description Mitigation / Alternatives Risk Rating
Likelihood Impact
Risks relating to the trading centre development
Infrastructure cannot
be provided to the
development
Water, sanitation, solid waste removal,
storm water and electricity is essential
for the effective operation of the trading
centre
Development of a storm water channel will be
required.
A dedicated operator will need to collect
waste materials generated on site and arrange
for their disposal at a municipal landfill.
An Eskom electricity servitude traverses the
site and either an application to relocate the
power line is proposed or architects will be
required to plan such that there is no
encroachment of Eskom’s servitude.
Low Major
Physical constraints to
site development
There is currently a commercial
plantation on the site.
No buildings may be built within the
provincial road reserve.
It will be necessary to negotiate timeous
harvesting of the timber on the site in order to
avoid delays in the development process.
Low Low
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Risk Description Mitigation / Alternatives Risk Rating
Likelihood Impact
Operational risks
Taxi operators do not
presently utilize the
site as a rank
If taxi operators choose not to base a
rank at the centre it would make it
difficult to attract customers.
Building attractive facilities to encourage taxi
operators to set up a rank such as toilets,
showers, rest rooms and offices.
Low Major
High cost of accessing
specialist management
The proposed trading centre could be
managed by inadequately trained and
skilled management team.
This risk can be avoided by negotiating an
initial five to ten year contract with an
established property management company
to provide the necessary resources to ensure
successful management. A commitment to
train local resources to take over the
responsibility will allow a transfer of skills to
the residents of Paulpietersburg.
Low Major
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Risk Description Mitigation / Alternatives Risk Rating
Likelihood Impact
Financial risks
Inability to secure
funding
Securing the required funding for the
proposed project
Securing grant funding for a project such as
this with a primarily social agenda is of
paramount importance.
High Project
derailed
Tenants cannot be
attracted to
development
Tenants that can attract the public and
that can regularly pay rent are essential
for the long-term success of the project.
Should the right mix of goods and
services not be offered at the centre, the
residents will continue to travel to the
Paulpietersburg central business district
to purchase goods and services.
The trading centre should be marketed and
qualifying in formal trader and SMME tenants
should be confirmed before the development
takes place. This allows for proper planning of
space within the centre. It would be beneficial
to partner with a developer that has a good
understanding of tenanting issues in informal
trading.
Low High
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Project Feasibility and Way Forward
Project Feasibility
In summary, it needs to be emphasised that the opportunity to develop a well planned
informal trading centre adjacent to and integrated with a taxi rank and with a formal private
sector shopping centre development exists at the proposed site at the T-junction of the R33
provincial road to Piet Retief and the D1880 district road west to Bilanyoni, Klipspruit,
Blinkwater and Schaapkraal.
This had been adequately demonstrated in the accompanying situational analysis report and
survey analysis report. The purpose of this feasibility assessment report (Phase 4 of the
project plan) is therefore aimed at establishing what must be done to ensure that the
development of an informal trading centre at the proposed site is feasible.
In short, the assessment has illustrated that:
The site identified is suitable for the development envisaged (well-located,
infrastructure can be provided, obstacles to development can be addressed);
Development an the proposed site as a whole must be carefully coordinated by local
government;
An institutional structure must be established that will act as the co-ordinating
management entity for the entire site;
An operational model that is practical is proposed for the informal trading centre
and taxi rank; and
The financial feasibility of the current proposals is found to be sustainable, provided
the following conditions are met:
1. Confirmation that the private sector funded and developed shopping
centre planned for the same site is definitely going to be built must be
obtained
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2. Commitment of the private sector developers to full co-operation in the
joint planning and management of the formal sector shopping centre, the
informal trading centre and the taxi rank must be secured
3. The R33 provincial road must be widened and adequate and safe access
to the site must be constructed
4. The eDumbe Municipality must secure funding for contruction of a taxi
rank for at least 20 taxis on the site
5. The eDumbe Municipality must commit to ongoing operational funding of
the taxi rank and informal trading centre on the site
6. Formal commitment of the Paulpietersburg Infomal Traders’ Association
and of the Paupietersburg taxi industry to the project must be secured
It is recommended that the establishment of the informal trading centre be undertaken if
theses conditions can be met.
The Way Forward
The following key activities must be facilitated in order to ensure that the development of
the proposed informal trading centre adjacent to and integrated with a taxi rank and with a
formal private sector shopping centre development proceeds:
Securing the land: Arrangements for permission to develop on the site must be
secured from the landowners, eDumbe Municipality;
Identifying and securing funders: Public or donor sector financial support for the
development must be secured (this will be dependent on the finalisation of the
private sector shopping centre plan and the financial feasibility based thereon);
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The design of the facility: Once the availability of funding has been confirmed the
more detailed planning of the informal trading centre and taxi rank should proceed
in close consultation with the private sector shopping centre development company;
Development application: Once a design has been agreed with all stakeholders and
the land has been secured a development application must be prepared and
submitted to the eDumbe Municipality;
Tenant identification: Potential tenants must be identified, and fair and transparent
selection process must be engaged in.
Study of the Feasibility of Establishing an Informal Trading Centre at Paulpietersburg
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Bibliography
1. Dr. Altman, Miriam, 2008. Formal – Informal Economy Linkages. Human Sciences
Research Council (HSRC).
2. Cairns, Rob, 2006. Nkandla Local Municipality: Review of the Local Economic
Development Strategy. Part of the Uthungulu Package of LED Strategies funded by
Gijima KZN.
3. Department of Energy, undated. Integrated Energy Centre (IeC): Concept Paper
Summary.
4. Inhloso, 2008. Nodal Framework Plans for Identified Nodes: Status Quo and
Concept Nodal Layouts.
5. Nkandla Municipality, 2008. Nkandla Municipality IDP Review 2008/9.
6. Nkandla Municipality, 2009. Nkandla Municipality Integrated Development Plan.
7. Valodia, Imraan, 2006. Formal/Informal linkages in South Africa: Some
considerations. School of Development Studies, University of KwaZulu Natal and
Human Sciences Research Council (HSRC).
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Appendix A
Questionnaire
What is your name? …………………………………………………………….……………………………………………………..…………..…….……
Do you belong to the Traders’ Association? ………………………………………..……………………………………..…………..…….……
What do you sell? ……………………………………………………………………………………………………………………….…………..…….……
Is there anything else you would like to sell? YES / NO
If so what?…………………………………………………………………………………………………………………………………..……… …..…….…
If so, why are you not selling this? ………………………………………….…………………………………………………..…………..…….…
Who are your customers? …………………………………………………………………………………………………………..………..…….……
Where do your customers mostly come from? ………………………………………………………………………………………..…….… 1. Dumbe? 2. Paulpietersburg? 3. Rural Areas (such as Emakholweni)?
Who are your competition? ………………………………………………………………………………………………………………..…..…….…
Why do you choose to sell at this place (namely, ………………………………………………………………………..…..…….………..)?
…………………………………………………………………………………………………………………………………………………………….…..…….…
Would you like your business to be located somewhere else? YES / NO
If so, where? ………………………………………………………………………………………………………………………………….………..…….……
Why would you prefer this other place? ………………………………………………………………….……………………………..…….……
Is it important for your business to be located near to: ……………………………..…….……………………(specify any other)
1. The taxi rank? YES / NO Why?
…………………………………………………………………………………………………….……………………………………………..…….…
2. The Spar supermarket? YES / NO Why?
……………………………………………………………………………………………………….…………………………………………..……...
3. The centre of Paulpietersburg? YES / NO Why?
……………………………………………………………………………………………..…….……………….………………………………………
4. The banks? YES / NO Why?
…..…….…………………………………………………………………………………………………………………………………….……………
5. The place where pensions are paid? YES / NO Why?
……………………………………………………………………………………………………………………………….…………………..……….
Would you like better facilities? YES / NO
If so, what facilities? ……………………………………………………………………………………………….………..…….……………
If so, where? …………………………………………………………………………………………………………..………..…….……………
Have you ever been offered facilities in a different location? YES / NO
If so, where and why did you not move to the other location? …………………………………………..…….………………………
What is your usual daily turnover (in rands)……………………………………………………………………… …..…….……………………
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Appendix B
Below is the comprehensive list of traders interviewed in Paulpietersburg.
Name of Trader Trading
Ana Manana Fruits, vegetables and malt
AneleNtuli Hair services, telephone services and airtime
Anna Masuku Fruits and Vegetables
Bankekile Kunene Vegetables
Beatrice Nkosi Clothes and shoes
Beatrix Msibi Vegetables
BelinahMkhwazi Fruits and vegetables
BhekisiphoMthethwa Shoes and other
BonganiSibiya Shoes, hair services and other
BongiweHlengiwe Vegetables
BuhleMsane Fruits and vegetables
BusanganiXapa Clothes
BusisiweMaseko Clothes
BusisiweMkhabela Fruits and vegetables
BusisweMasego Vegetables and maize meal
CatrinaNdlovu Fruits and vegetables
ChrisandaHlathshwayo Fruits and Vegetables
ChrisantaHlatshwayo Fruits and vegetables
Debby Mbokazi Cooked food
DlabusiSkhosana Vegetables
DuduziMadi Vegetables, sweets and chips
DuduzileDlangolo Clothes
EgnesNkwanyana Other
Elizabeth Cilo Fruits, vegetables and sweets
Elsie Kunene Fruits and Vegetables
EmaMasuku Fruits and chips
Eunice Hadebe Vegetables
Eunice Vundla Fruits and Vegetables
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Name of Trader Trading
FikileMadonsela Medicine
Flora Mbatha Fruits, vegetables and chips
FlorahFikile Fruits and vegetables
FlorenaSikhakhane Fruits, vegetables and maize meal
Florence Maseko Fruits and Vegetables
Gabi Xaba Vegetables
GcinekileMthethwa Clothes
Gloria Buthelezi Fruits and vegetables
Grace Masonda Vegetables
GurtrudeMkonza Vegetables
HlengiweZwane Vegetables
Ivy Ngwena Vegetables
JaromeMthembu Clothes and other
JohanneNhlengethwa Fruits and Vegetables
JoiceMdlalosi Chips and other
Joseph Shongwe Other
Joyce Ngwenya Fruits and Vegetables
Julialie Kunene Fruits, vegetables and malt
KhoseZikala Vegetables
Kumalo Beans and chips
Lethi Kunene Fruits and vegetables
LinahGule Fruits and vegetables
LindiweDlongolo Clothes
LiniduShelembe Fruits, vegetables and chips
LiphietNkosi Fruits and Vegetables
Lucky Ngenya Sweets, telephone services and airtime
MabefuBhekiswayo Cigarettes, cooked food and maize meal
MandlaNgwenya Fruits and vegetables
MandlaNkosi Cigarettes, chips and telephone services
Margret Zwane Fruits and Vegetables
Marian Majola Fruits and Vegetables
Martha Dlodlo Fruits and Vegetables
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Name of Trader Trading
MatopiMasuke Cooked food and chips
Mavis Mayisela Vegetables, cigarettes, sweets and telephone services
Mavis Ndludlu Shoes
Mavis Zwane Cooked food
MbongeniNgenya Fruits, vegetables, cigarettes, sweets and other
MbongeniShoyisa Other
MduduziShoyisa Other
MelikaBophela Clothes
MfanafuthiZisongo Other
MphileNdaba Vegetables
MzoMlambo Fruit, cooked food and chips
NokhanyeNgembe Fruits, vegetables, cigarettes, sweets and telephone services
NokhuthulaShabalala Fruits and Vegetables
Nomusa Buthelezi Fruits, vegetables and chips
NomusaNkumalo Fruits, vegetables and chips
NomusaZwane Fruits and vegetables
NomvulaMaseko Fruits and vegetables
Nomvula Zulu Fruits and Vegetables
NtombifuthiMthethwa Fruits and Vegetables
Ntombikayise Kunene Fruits and vegetables
NtombikayiseMthethwa Vegetables
PhelileNkosi Fruits and Vegetables
Philagone, Dlamini Medicine
PhilanganiXulu Fruits and vegetables
PhollyKhumalo Fruits and vegetables
PhumzileMsane Fruits and vegetables
PhuzileXaba Fruits and Vegetables
PhylisZwane Fruits and Vegetables
Pretty Lukhele Incense, steel wool and pot scrapers
Regina Mtshahi Fruits and Vegetables
Rita Khoza Fruits and Vegetables
Roster Linidiwe Telephone services
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Name of Trader Trading
Sam Nkosi Telephone services
SamariXaba Fruit and other
Samaria Bophela Fruits, vegetables and malt
Samaria Hlatshwayo Vegetables and ice cream
SamukelisiweMbatha Fruits and Vegetables
Sandile Nkosi Hair services
Saulina Kunene Fruits and Vegetables
SbongileSibeko Ice cream
SelinahNkosi Fruits and vegetables
ShilaZwana Fruits, vegetables and chips
SibongileKhanyile Fruits and vegetables
SibongileMhlombu Fruits and Vegetables
Sibongile Ndebele Fruits
SibongileSibiya Fruits and vegetables
SibongileXulu Fruit and chips
Sibongile Zulu Fruits, vegetables and chips
Siboniso Zungu Telephone services
SifisoSibiya Clothes and telephone services
SilungileMbatha Fruits and Vegetables
Simon Sibiya Vegetables
SmangeleMaseko Fruits and Vegetables
SmangeleMothaa Fruits and Vegetables
SonosiniDlamini Medicine and herbs
SphiweKhanyile Vegetables
ThabisoMbatha Shoes and hair services
ThandaziHlomuka Fruits, vegetables, cigarettes, malt and edible soil
ThandiNdaba Fruits and Vegetables
ThandiXhakaza Fruits and vegetables
ThembeniDlongolo Clothes
ThembiShabangu Fruits, vegetables and chips
ThembisileNtshangosi Fruits and vegetables
ThokoZwane Vegetables and other
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Name of Trader Trading
ThompiNgwenya Ice cream
ThulaniNdwandwe Telephone services and airtime
TryphinahNkwanyana Fruits, vegetables and malt
Veronica Mkhonza Vegetables
Victoria Madonsela Fruits, vegetables and chips
Victoria Mkhwanazi Fruits and cooked food
WinnieHlatshwayo Fruits and Vegetables
Zanele Zulu Fruits, vegetables and chips
ZodwaVundla Fruits, cigarettes, sweets, chips and other
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