PRINCIPLES
During the Policy Phase of the iSLP the Philippi East industrial area was recognised as the potential "CBD" of the south-east sector of metropolitan Cape Town. The area had been developed as an industrial township in the 1970's, offering the attraction of inexpensive land, rail sidings and close proximity to both the airport and the N2 highway. However, the even closer proximity of the infamous Crossroads squatter camp, which became the focal point of apartheid and "warlord" violence in Cape Town, kept all but a few investors at bay.
Soon after the iSLP was inaugurated the City received funding from the national Department of Transport for the development of the "Wetton-Lansdowne-Philippi Corridor"
(WLPC) - which would extend for 1 kilometre on either side of
Lansdowne Road in the iSLP project area, and would thus include the Philippi Industrial area. A synergy was thus established between the two initiatives, and agreement was reached on an appropriate economic development policy.
It was decided that the iSLP intervention on economic development should focus on (a) investment in major capital projects which would generate economic and job opportunities by a multiplier effect; and (b) the promotion of Philippi East as an attractive investment prospect to the business community.
IMPLEMENTATION
The achievement of the latter objective has been placed within a company-not-for gain that has been created by a wide range of Philippi East stakeholders. The Philippi East Development Initiative (PEDI) was established in 1998 and a very experienced businessman was appointed as CEO a year later. He has been able to play a useful role in the synergy with the Corridor team.
Progress has been slow, hindered both by escalating violence in the sector, notwithstanding the development and substantial reformation of Crossroads and by the slow and convoluted transformation of local government within the new South Africa.
There have been some achievements,
however:
- PEDI is in the process of purchasing a very large industrial "hive" that is strategically located at a crossroads on Lansdowne Road, with a view to enabling its tenants through an empowerment process to eventually acquire it under some kind of communal ownership.
- An operating organisation has been found for the establishment of a wholesale fresh produce market, the capital cost of which will be provided by the City and the Province (the latter using iSLP RDP funds). A Business Plan was being considered in mid-2001.
- A major insurance company has purchased the site of a disused cement factory (opposite the industrial hive) and is in the process of installing infrastructure and then subdividing the land with a view to selling portions off to developers, within a secured
estate.
- Three market places for relatively informal traders are being established by the City.
Wetton-Lansdowne-Philippi
Corridor and iSLP Programmes
The Wetton-Lansdowne-Philippi Corridor has been identified as an important node for future development in Cape Town. The aim is to bring jobs, facilities and services to an area that has suffered years of inequality, poverty and neglect. The Philippi node is an essential part of the Wetton-Lansdowne-Philippi Corridor. There is an urgent need to create employment opportunities in the area and the development of the Philippi node will provide much needed economic and social facilities near the large residential population in the south east. The Philippi node will be far closer to the surrounding iSLP population than Belville, Cape Town and Claremont. Public investment is vital for this venture. The proposed Philippi node is seen as an important means of growing the local economy for iSLP communities, while, at the same time linking those communities to the mainstream economies of Cape Town.
It is clear that the iSLP and the Wetton-Lansdowne-Philippi Corridor Programme support each other. The iSLP provides housing, services and local public facilities. The Wetton-Lansdowne-Philippi Corridor can ensure that the iSLP is integrated into the economy and that there is adequate transport and facilities. There is also a significant overlap between the areas. The corridor areas include about 80% of the iSLP areas which are some of the poorest areas in Cape Town, for instance, Brown's Farm, Vietnam, Miller's Camp and Lower Crossroads. All these areas will directly benefit from the development of the proposed Philippi node.
Fresh Produce Market
The business plan for the proposed Philippi East Fresh Produce Market recommends a multifunctional market based on the sale and processing of agricultural products. The proposed functions are:
- The wholesaling of fresh produce. This would be the primary function of the market, trading initially off 3000m2 of rented floor space and selling directly to retailers, contract clients (e.g hotels and restaurants) and a small quantity to food processors. The wholesalers would source their produce directly and not through agents as in the practice with national markets.
- The on-site retailing of fresh produce. It is proposed that a retailing facility for 30 retailers be provided of about 40m2 of rented floor space per retailer inclusive of lock-up storage. Sales would be to the general public.
- A ripening facility, particularly for bananas, but which could be used for other produce. Initially 6 ripening rooms are proposed, with a recommended increase to 12 rooms at the end of the first phase. These facilities will b provided by the private sector operator and assembled on rented floor space. Sales would be to the other operators on the market and directly to outside retailers.
- A packhouse facility which would sort, grade and pack fresh produce collected primarily from emergent farmers for wholesale and retail purposes. This operation will facilitate emergent and small farmer access to commercial markets, whilst providing job opportunities (as packers) at the market. Equipment will be provided by the operator who will operate from rented facilities at the market.
- A food processing facility which would process both good and damaged produce at the market. This could supply A-grade clients with specially selected and processed goods whilst providing as well for the lowest end of the market. Strict health controls are necessary which will be instituted by the market operating company. Again the equipment would be provided by the operator who would operate from rented premises at the market.
- An organic waste composting venture, which would operate off-site taking the waste from the market, the removal of which would otherwise be a cost to the market operators. Other sources of waste (eg from the Epping Market or garden refuse) will be necessary in order to ensure sufficient supply. It is intended that the compost be sold, amongst others to the emergent farmers so as to produce high value organically grown produce, which is most easily done at the small operational scales characteristic of these farmers. The site recommended is a 50 year storm-water detention facility in close proximity to the site. Preliminary discussions have been held with the relevant Engineers Department, which supports the proposal in principle. Lease agreements with the City will need to be negotiated.
Institutional Arrangements
The Philippi East Trading Centre (Pty) Ltd would be the property holding company, which will let the premises to a market operating company which would undertake all landlord functions.
The operating company will facilitate the establishment of joint venture empowerment opportunities as part equity shareholders in the operating company, as well as in the form of the `value adding' operations, such as the ripening rooms and the packhouse and food processing operations.
Economic Empowerment Opportunities
The Business Plan estimates that Phase 1 (2002 to 2006) could generate 150 new direct job opportunities. The majority of these will be taken up by members of the local communities. These, together with those arising from Phases 2 and 3 could result in a total of approximately 470 new jobs. Included in these would be a number of entrepreneurial opportunities.
Secondary job opportunities have not be assessed, but these would arise in a variety of areas.
Equity in the operating company will be provided by the market operator (contracted through the approval of the Business plan to provide this service for the first five years of its operation) plus joint venture empowerment partners. It is envisaged that the empowerment partners will acquire the appointed operator's equity as soon as possible after the first five year term. The operating company will be directly responsible for the wholesale and retail activities. Small enterprise ventures could be established to undertake maintenance work on behalf of the operating company.
The property company would receive royalties from the operating company based on the value of the property company's capital investment. The operating company will derive its income from rentals and a turn-over levy on all operators.
Fedsure Properties
Development at Philippi East
In 1998 Fedsure Properties (formerly Norwich Properties) acquired a 40 ha site at the corner of Lansdowne and new Eisleben Roads, Philippi
East. Various development options, including a retail centre, civic precinct, residential and industrial developments were considered.
In January 1999 Council identified the site, together with the City owned Stock Road Site, as key to the development of the Philippi Focus Area, one of four focus areas identified in the five year business plan of the Wetton-Lansdowne-Philippi Corridor.
In August 1999 Fedsure proposed a private/public partnership in which the City contributed R9 million (excluding VAT), spread over three years, towards the provision of public infrastructure. The proposal was approved by Council.
Fedsure, as owners, are co-ordinators and facilitators of the development. A justice centre has been established on the site and negotiations are underway with SAP Services for the development of a safety and security centre. A total amount of R 3 385 000 has been transferred from the City to Fedsure.
The first phase of the servicing of the site, comprising roads, stormwater, sewer, water and electrical reticulation commenced during May 2000 and was completed at the end of the year.
A service station has been approved and an open air amphitheatre has been handed over. Fedsure are negotiating for the sale and development of a building for a retail centre, whilst negotiations are at advanced stages for other commercial and wholesale uses. A residential component is being investigated on the southern portion of the site.
The next R3 million tranche (2001/2002 budget) will be transferred once capital investment of R15 million has been secure by Fedsure.
Public Space and Markets Programme
A Public Space, Markets and Landscaping Programme has been initiated by the Planning and Economic Directorate of the City of Cape Town, Cape Town Administration. This programme focuses on implementing integrated public space, local economic development and environmental improvement projects. A total of 10 Public Space and Markets Projects has been undertaken for implementation in the 2000/2001 capital budget year. The objectives of these projects are to:
- improve the environmental quality of strategic sites in marginalised areas of the City.
- create opportunities for small business/informal traders through the creation of public markets at strategic locations.
- improve investor confidence and opportunities for tourism.
- consolidate and make more viable the significant investment that local, provincial and national government have made in the development of community facilities, transport interchanges and economic development.
- increase the livability and opportunities within these local areas through the development of quality urban spaces which is in line with the Unicity's "Dignified Public Space Development Programme".
The programme is also not limited to the provision of physical infrastructure. Training Programmes including business skills training and support for traders and small business has been linked to most projects. Consultants have been appointed to implement a business training programme targeting informal traders. Hard skills training, such as the training of 30 community members in mosaic work and ceramics as demonstrated in one of the completed projects, is also an integral part of the programme.
Three of the 10 projects undertaken in the financial year 2000/2001 fall within the iSLP area. The three projects are: City owned Topcor site, Crossroads Town Centre and Ingulube Drive Public Space and Markets project.
OPERATION
There are no "operations" yet to report upon.
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