INGONYAMA TRUST BOARD

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INGONYAMA TRUST BOARDA Schedule 3A Public Entity

in terms of the Public Finance Management Act, 1999

PRESENTATION TO THE PORTFOLIO COMMITTEE ON RURAL DEVELOPMENT AND LAND REFORM

10 MARCH 2010

V475, OLD ASSEMBLY

PARLIAMENT, CAPE TOWN

STRATEGIC PLAN AND BUDGET

2010/2011

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FACTS AND FIGURES

• Land owned by Trust: 2 700 000 hectares.

• Number of titles: 1 491.• Land held in almost all 61

municipal areas.• Population living on Trust land

estimated at 4 558 698.• 241 Traditional councils/Authorities

have jurisdiction on Trust land.• Trust set up by Ingonyama Trust,

1994 (Act No 3 of 1994)

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STRATEGIC PLAN AND BUDGET 2010/2011

• The strategic plan has been prepared in conjunction with the Budget in order to achieve the Board’s vision and mission.

• The strategic plan focuses on issues that need to be resolved over the next five years and has regard to Government priorities such as poverty alleviation, provision of housing and infrastructure and Black Economic Empowerment.

• In particular the implementation of the Communal Land Rights Act and challenges faced by the Board because of changes in other legislation such as the Mineral and Petroleum Resources Development Act have informed the content of this Strategic Plan.

• The strategic issues raised in the Strategic Plan will facilitate achieving the objective of optimal land usage for the material benefit and social well being of the communities living on Ingonyama Trust land.

STRATEGIC PLAN AND BUDGET 2010-2011 contd.

• The Ingonyama Trust legislation has created a unique instrument of land management providing both support to the communities on communal land and an executive agency available to the Minister in the context of “real estate” management. It is indeed very important to understand that the legal mandate of the Trust is not that of a developmental agency as such but that of a land management agency which must ensure that any commercial activity on communal land is developmental in nature. Commercial activities must benefit the local communities and the contracts entered into with the commercial sector (and indeed the official sector) contain provisions which require that benefits flow to the affected local communities. The main efforts of the Ingonyama Trust Board are geared to that end.

• The emphasis for the strategic plan is therefore “land management” and the direct and indirect benefits flowing to communities therefrom.

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OVERVIEW OF BUDGET AND TRUST FUNDING The budget has been aligned to the Strategic Plan for the year 2010/2011. The Ingonyama Trust Boards’ income is obtained from two sources.

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Ingonyama Trust Board

Ingonyama Trust Board Own Fund Income – (Trading activities)

Transfer Payment received from the Department of Rural Development and Land Reform) –VOTED FUNDS.

The total budget requirement for the year 2010-2011 is R60,096,142 which includes voted funds of R 9156,580.

The following slides highlight the major targets.

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TARGET PERSPECTIVE

OUTCOME OUTPUT/ACTIVITY INDICATORS 2010/2011

2011/2012

2012/2013

2013/2014

2014/2015

1.This strategic objective will result in the optimum usage of land for the benefit of communities and other parties including the State and municipalities and will also prepare for the implementation of the Communal Land Rights Act (CLaRA).

Updated Land Tenure Information system.

Number of transactions to be recorded.

500 500 500 500 500

BUDGET R150,000 R100,000 R80,000 R65,000 R60,000

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TARGET PERSPECTIVE

OUTCOME OUTPUT/Activity

INDICATORS 2010/2011

2011/2012

2012/2013

2013/2014

2014/2015

2.This strategic objective will result in the optimum usage of land for the benefit of communities and other parties including the State and municipalities and will also prepare for the implementation of the Communal Land Rights Act (CLaRA), should it be implemented or any other tenure upgrade legislation that might come into being.

Consolidation

of 1500 titles.

Minimum number of titles to be consolidated each year.

50 50 50 50 50

BUDGET R150,000 R150,000 R20,000 nil nil

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OUTPUT/ACTIVITY INDICATORS 2010/2011

2011/2012

2012/2013

2013/2014

2014/2015

3. Facilitate the transfer of former R 293 KwaZulu towns to local authorities.

To facilitate the number of towns to be transferred.

6 3

- - -

BUDGET R 10, 000 R 10 500 R 11 250 R 11 576 R12 155


2011/2012

2012/2013

2013/2014

2014/2015

4. Facilitate the transfer of approx 2300 state domestic properties.

Number of state domestic properties to be identified per year.

300 500 500 500 500

BUDGET NO COST TO ITB

NO COST TO ITB

NO COST TO ITB

NO COST TO ITB

NO COST TO ITB

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2011/2012

2012/2013

2013/2014

2014/2015

5.Allocation of land for housing and infrastructure purposes.

The percentage of applications received per year to be concluded.

80% 80% 80% 80% 80%

BUDGET R50, 000 R52, 500 R55,125 R57,881 R60,775

• In order to support the provincial Department of Human Settlement’s Rural Housing Policy the Board has developed a standard Development Rights Agreement which is entered into with various Local Municipalities.

• This enables housing projects on Trust land to be fast-tracked subject to the consent of relevant Traditional or Community Councils.

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TARGET PERSPECTIVE


2011/2012

2012/2013

2013/2014

2014/2015

6.Tenure upgrades and/or formalisation of settlements.

Service providers to be appointed and land to be identified.

3 Projects 3 Projects 3 Projects 3 Projects 3 Projects

BUDGET R 937 341.00 R 1 000, 000 R 1 000,000 R1 000,000 R 1 000,000

• Some of the former R293 townships have informally expanded onto surrounding Trust land. This has resulted in this land being vulnerable to squatting on the one hand but having potential development value on the other hand.

• The Board proposes to appoint a service provider to identify this land and advise on development potential.• The towns identified for 2010/2011 are:• Umlazi .Vulindlela• KwaMashu .Esikhaweni• Kwamakutha .Folweni• Ezakheni. .Magabheni• Ngwelezane .Manguzi• Madadeni .Mbazwana• Jozini .Ingwavuma• Mbumbulu• The budget figures for post 2010/2011 are for the implementation process and are also to include additional towns

yet to be prioritised.

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2011/2012

2012/2013

2013/2014

2014/2015

7.Ongoing co-operation with DRDLR in preparation for CLaRA.

Development of guidelines for CLaRA implementation.

Ongoing Ongoing Ongoing Ongoing Ongoing


• The Act, if a commencement date has been announced, will reconstitute the Board as the Ingonyama Land Rights Board for KwaZulu-Natal.

• The Board will continue to liaise with the Department of Rural Development and Land Reform in connection with implementation and awaits publication of the draft regulations.

• This will enable the “mapping exercise “ previously commissioned by the Board to be completed and to identify the future role and functions of the Board and the various processes and work-flow which will be necessary to successfully implement CLaRA in the Province.

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2011/2012

2012/2013

2013/2014

2014/2015

8.Monitoring of legislation impacting on land owned by ITB./ review of enabling legislation.

Legislation studied and guidelines developed. preparation and drafting amendments

Legislation studied and guidelines developedpreparation and drafting amendments






• Some 30 pieces of legislation impact on the workings and management of Trust land. These include Communal Land Rights Act, Traditional Leaders Framework Act, Municipal Property Rates Act and the Mineral and Petroleum Resources Act.

• This legislation is continuously monitored and guidelines prepared.

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TARGET PERSPECTIVE

OUTCOME OUTPUT/ACTIVITY INDICATORS 2010/2011

2011/2012

2012/2013

2013/2014

2014/2015

9.Extension of security of tenure, registered leases can be used as security for funding of development and unlock employment and equity opportunities.

To maximize the mining potential on Trust Land for the benefit of communities including BEE/Joint ventures.

Granting of leases (for non mining purposes including conversion of PTO’s into leases).

The minimum percentage of the number of applications received from prospective developers.

75% 75% 75% 75% 75%

BUDGET LEASE INCOME TO BE GENERATED (INCLUDING EXISTING LEASES).

R 5 616180 R 5 896 989 R 6 191 838 R6 501 430 R6 826 502

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2011/2012

2012/2013

2013/2014

2014/2015

10.Granting of leases for mining purposes.

The minimum percentage of the number of mining leases received from prospective operators.

75% 75% 75% 75% 75%

BUDGET Mining/royalty income to be generated including existing leases

R17, 254 285 R18,116,999 R19,022,849 R19 ,973,992 R20,972,691

• The royalty income from 2010 is subject to the Minister of Mineral and Energy Affairs granting permission that royalties will still accrue to the Trust in terms of Schedule 2, section 11 of the Mineral and Petroleum Resources Development Act 28 of 2002.

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TARGET PERSPECTIVEOUTCOME OUTPUT/

ACTIVITY

INDICATORS 2010/

2011

2011/

2012

2012/

2013

2013/

2014

2014/

2015

11.Maximising the financial benefit to communities from income of the Trust.Note : The Board will

continue to seek fresh procedural

and possibly legislative avenues for distributing trust funds in a manner which meets the accountability requirements of the PFMA

Project-related payments which are for the material and social well being of the relevant communities and which meet prescribed accountability standards.

The percentage of applications received from traditional communities to be approved by the Board.

(This is a continuous process, approval may depend on the number of Traditional communities submitting project proposals).

80% 80% 80% 80% 80%

BUDGET Portion of income derived by the trust to be distributed to traditional communities at a 5% growth per annum

R 32,846,751 R 34,489,089 R 36,213,543 R 38,024,220 R 39,925,430

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TARGET PERSPECTIVEOUTCOME OUTPUT/ACTIVITY INDICATOR

S2010/

2011

2011/

2012

2012/

2013

2013/

2014

2014/

2015

12.Subsistence and cash crop benefit to rural communities

Establishment of communal gardens.

Minimum number of sites identified, gardens established and production monitored

5 5 5 5 5

BUDGET R 250 000 R 275 000 R 300 000 R 325 000 R 350 000

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TARGET PERSPECTIVEOUTCOME OUTPUT/

ACTIVITY

INDICATORS 2010/

2011

2011/

2012

2012/

2013

2013/

2014

2014/

2015

13.Job creation and basic land management

Establishment of project teams to assist with soil erosion, alien vegetation removal, cutting of firebreaks and waste removal.

Priority areas identified, teams appointed and trained.

Activities monitored.

3 10 10 10 10

BUDGET R 400 000 R 550 000 R 605 000 R 665 500 R 732 050

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TARGET PERSPECTIVEOUTCOME OUTPUT/ACTIVITY INDICATORS 2010/

2011

2011/

2012

2012/

2013

2013/

2014

2014/

2015

14.Identification and maintenance of immovable assets

Team of site inspectors to be appointed to identify occupation on Trust Land and monitor development

Inspectors appointed and trained.

Inspection targets, assets identified.

10 TC areas 10 TC areas

10 TC areas

10 TC areas

10 TC areas

BUDGET R 1 000 000 R 1 100 000 R 1 210 000 R 1 331 000 R 1 464 000

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TARGET PERSPECTIVEOUTCOME OUTPUT/ACTIVITY INDICATORS 2010/

2011

2011/

2012

2012/

2013

2013/

2014

2014/

2015

15.Identification and maintenance of immovable assets

Team of site inspectors to be appointed to identify oocupation on Land Land and monitor development

Inspectors appointed and trained.

Inspection targets, assets identified.

10 10 10 10 10

BUDGET R 1 000 000 R 1 100 000 R 1 210 000 R 1 331 000 R 1 464 000

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Proposed

INCOME 2010/2011

ITB Own Fund Income 50,916,390.00

PTO - General 2,000.00

PTO - Commercial 9,648.00

Rental Income non- mining 5, 616,180.00

Royalties and Prospecting Income 17,254,285.00

Investment Income 13,551,293.00

Interest on overdue Debtors accounts

From reserves for ITB office accommodation

From reserves for rates provision on ITB land

Other Income / Servitude 50,000.00

Department of Rural Development and Land Reform 9,179,752.00

Transfer Payments – Current 9,156,580.00

Investment Income 23,172.00

TOTAL INCOME 60,096,142.00

12,984.00

4, 420, 000.00

10,000,000.00

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20010/2011

EXPENSES

ITB Own Fund Expenditure carried forward 39,063,390.00

Advertisement and public awareness campaigns 50,000.00

Legal fees 235,000.00

Bank charges 14,298.00

Repairs, grass cutting and cleaning 90,000.00

Provision for doubtful debts 50,000.00

Payment to beneficiary ( 90 % portion ) 32,846,751.00

Capital expenditure including ITB office accommodation 4 ,520,000.00

Staff Training 50,000.00

Tenure upgrade & formalisation of settlements

Cultural events and meetings 120, 000.00

Land Tenure Information system - maintenance 150,000.00

937 341.00

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20010/2011EXPENSES continued from previous slide

ITB Own Fund Expenditure balance brought forward 39,063,390.00

Rates provision 10 000 000.00

Relocation costs 50,000.00

Rates office ITB office accommodation 15,000.00

Electricity and water 40,000.00

Telephone 48, 000.00

Establishment of communal gardens 250,000.00

Identification and maintenance of immovable assets

1,000,000.00

Basic land management

Housing admin expenses 50,000.00

400, 000.00

R50,916,390.00

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60,096,142.00TOTAL EXPENDITURE

70,000.00 Cleaning ,repairs and maintenance

Telephone

External audit Fees

Internal audit fees

104, 580,00 Security expenses

8,000.00 Computer software

50,000.00 Personnel agency fees

20,000.00 Motor vehicle expenses

2,000.00 Crockery & cutlery

24,000.00 Advertising

71,400.00 Stationery and other expenses

54,000.00 Insurance

6,000.00 Internal audit committee members rem

7,300,622.00 Salaries

350,000.00 Travel ,accommodation, meetings

15,000.00 Bank Charges

420,000.00 Board Members remuneration

9,179,752 Departmental Funding ExpenditureD

48,000.00

486,150.00

150 000.00

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SUMMARY AND CONCLUSIONS• The Ingonyama Trust Board sees its role increasingly as real estate and land management

orientated.

• To this extent the Ingonyama Trust seeks to strive as a model in real estate management in the country.

• The strategic plan and budget for 2010/2011 have been prepared in order to achieve the optimum usage of land for the benefit of communities and other parties including the state and municipalities and other parties.

• The benefits flowing to persons living on trust land will include: Income from rents for commercial development. Joint ventures/community participation in developments. Employment opportunities. Skills transfer. Quality of life improved through:

Provision of Housing. Provision of infrastructure and basic services.

The Budget for 20010/2011 totals R 60,096,142.00 and is made up of:

ITB own fund income : R 50,916,390.00 Voted funds : R 9,179,752.00

The End!

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INGONYAMA TRUST BOARD