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Land reform goes private

Polokwane - An initiative to match land reform beneficiary communities with private investors is trying to revive the ill-fated Mamahlola land claim in Limpopo.

It was one of the major symbolic land transfers in the early 2000s, but subsequently became an emblem of the land reform programme’s failures with the pre-existing farm and timber plantations on the land collapsing owing to underinvestment.

Now the Mamahlola land is one of 40 projects taken on by the Vumelana Advisory Fund, a private sector initiative to create so-called community-public-private partnerships.

Legally, community land claims require a registered communal property association (CPA) that owns the land.

According to Vumelana’s CEO, Peter Setou, the fund has taken on 40 projects representing vast tracts of land restored to communities throughout the country.

Partnerships with investors have been concluded on 12 of these, covering 64 407 hectares of restored land and drawing in about R464 million in investment.

Projects under negotiation cover another 55 044 hectares, according to statistics provided by Setou.

This does not represent all the land the communities own, but the portions packaged as projects.

Vumelana is a legacy project of the Business Trust, a fund created by big business in the 1990s to finance development projects. It wound itself down in 2011 and endowed Vumelana with R117 million.

“When we started out, the hope was that a deal would take less than 12 months, but it often takes two years,” said Setou. “You have to first get the CPA into shape,” said Setou

The community’s CPA needs a proper constitution and a legitimate process for taking resolutions to avoid infighting.

The idea is in essence that the investor enters into a long-term lease, paying the CPA rent. The CPA then also takes an equity stake in the enterprise using the land, while the community’s members get preference for jobs.

Vumelana’s process involves evaluating the land and then packaging it as a commercial proposition that goes out to tender.

A tender for the Mamahlola land was issued this month.

The Mamahlola land has played a significant role in both the forced removals of apartheid and the land restoration project since democracy.

The community fought against their relocation from 1956 to 1958 in what was then regarded as a significant public test for Hendrik Verwoerd’s apartheid policy.

The Mamahlola land claim was awarded 43 years later in 2001 with much ceremony, but it soon became an emblem of the failure of rural land restoration.

By 2003 the Mamahlola land was placed under judicial management.

The government then brokered the Mamahlola’s first partnership with a private partner, a company called SA Farm Management, which did similar deals with other land reform beneficiary communities.

SA Farm Management was liquidated in 2008.

Judicial management was only lifted in 2014, giving the community back control of the land.

The request for proposals from Vumelana, issued this month, described the dire state of the land.

Of the 3 566 hectares owned by the community, 549 hectares used to be irrigated orchards and 600 hectares a timber plantation.

Currently, there are 156 hectares of mango trees that are usable, while reservoirs, pump stations and houses on the property have largely been destroyed.

If both of these operations were restored, the investor could generate revenues of R68 million and profits of R28 million, claims the request for proposals put out by Vumelana this month.

Vumelana projects have had a bias towards tourism with eight completed deals involving setting up game farm lodges or other tourism infrastructure.

Two were agricultural in nature with two more involving forestry projects.

Of the 28 projects under negotiation, 11 involve the previous owners of the restored land as the investors looking to lease back the land and partner with the CPA, said Setou.

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