1. INTRODUCTION
The Senqu Local Municipal (the municipality) seeks proposals from private developers to initiate a state-of –the art tourism related facility at the Holo-Hlahatsi Dam project site. The land and any refurbishments and improvements on the Holo Hlahatsi Dam belong to Magwiji Land Claimants and as such the main objective of this request for proposal is to improve the economic profile of the area and the community thereof. The land is currently owned by the Magwiji community in the form of a Communal Property Association (CPA). The Municipality is part of the Co-Management of the project. The municipality anticipates awarding one or more concessions to private developers and operators to rehabilitate and expand tourist facilities and to manage these facilities for specified period. However it should be borne in mind by the prospective developer or operator that the CPA shall have equity in the management and operations of the projects as detailed in the Settlement Agreement to be made available to interested bidders.
2. EXISTING FACILITIES AND SURROUNDINGS
The Holo-Hlahatsi Tourism project consists of two boats, the dam, Conference facilities, braai areas, four chalets, four complete rondavels and two which are not complete .The evaluation document are available. The facilities is located near the border Eastern Cape and Free State and Lesotho and situated near to the Orange River. The Holo-Hlahatsi Tourism project is adjacent to Tiffendell, the only ski resort in South Africa. The Maloti Route also runs adjacent to the location of the Holo Hlahatsi Dam. The Senqu area is well known for its bio-diversity, fly-fishing, pristine environment, hiking trails and other tourism attractions. Therefore linkages and to already existing tourism activities in the area is a possibility and the aim is to enhance these.
3. DEVELOPMENT CONCEPT
Senqu Local Municipality seeks to develop Holo Hlahatsi Tourism project has the potential to be an international competitive tourist destination centre. More information on this is contained in the business plan which was commissioned by the Local Municipality in collaboration with the Department of Environmental Affairs and Tourism. The settlement agreement documents on the ownership and management of the land. The value of the facilities already in existence at the dam are valued at R4 000 000-00 (four million rand). The CPA will have an amount estimated at R5 000 000-00 (five million rand) as grant funding towards meeting the objectives of the proposed tourism project. Thus the contribution of the CPA towards the equity of the project will be R9 000 000-00 (nine million rand).
4. DESIGN FRAMEWORK, WORKS AND IMPLEMENTATION PLAN
Proposals should include a conceptual design/framework, including architectural drawings for the whole development zone, detailed cost estimated for construction of the development concept and project management, schedule& implementation plan(which may be broken into concrete phases) for initiation and completion of renovations, improvements and any new facilities to be constructed. Bidders are also expected to include detailed specification of the proposed works which may include, without being limited to renovation of existing buildings and facilities, construction of new buildings and facilities, improvement of basic infrastructure, such as road, lighting and telecommunications. (Site visits can be arranged for interested bidders).
5. CONTRACTING PARTIES
The Municipal will enter into concession agreement with company or consortium of companies (hereinafter referred to as the Concessionaire), which will operate the Holo Hlahatsi Tourism project for a period and under terms and conditions to be negotiated between the parties. The Concession will be required to establish a legal corporate entity in South Africa, which entity will enter into a contract with the CPA and Municipality for operation of Holo-Hlahatsi Tourism project.
6. OPERATION OF SERVICE
The Concessionaire will be required to operate the facility 365 days a year. Operation hours for specific activities at said Dam, and other recreational sites and catering outlets should be specified by bidders.
7. PERSONNEL AND TRAINING
Preservation and growth in employment, and development of technical and management skills are among the most important objectives of this project .There are no staff members at project at this moment. Bidders are required to include staffing, training and management development plan as part of their proposal, which should include detailed information as to how they will be performed. Local employees will be prepared and management of Holo –Hlahatsi Tourism project at the expiry the Concession.
8. ENVIRONMENTAL IMPACT AND MANAGEMENT
Bidder must present, as part of their bid an environmental impact assessment for the proposed works. Bids must also include an environmental management plan to ensure the conservation of the unique natural resources around which the Holo Hlahatsi dam project is based.
9. PURPOSE AND EXTENT OF CONTRACT
The Municipality will contract with the Concessionaire to rehabilitate, renovate expand and improve the Tourism facilities comprising the Holo Hlahatsi Tourism project. The business Plan will serve as guide, but not a binding specification, for works to be carried out by the Concessionaire. Creative and innovative proposals are welcome.
10. FINANCING PLAN
Bidder will be required to present a financing plan, detailing the total funding requirement and breakdown between debt and equity funding. There should no dependence on government guarantees ,financial commitment or support. Details on equity and shareholder loans should include the source of funds, amounts of that each shareholder is prepared to commit and timing of such contribution .Details on debt funding should include type of debt, amount currency, maturity and grace period for interest and /or principal, repayment. Schedule of events of default and security requirement should be detailed. Providers of both debt and equity should indicate when they could achieve financial close .The financing plan should also include a capital expenditure plan and financial projections
11. CAPITAL EXPENDITURE PLAN
- Estimates and breakdown of capital expenditure, include working capital requirement ;
- Proof of available of financing ,which may include letter of intent from financial institution and proof of available of own capital;
12. FINANCIAL PROJECTIONS
- Pro forma P&L statements, balance sheet, cash flow statements. DCF analysis;
- All assumption clearly stated and substantiated, including pricing. occupancy rate seasonal variation, spending on different services and activities;
- Propose formula for sharing revenues with the CPA (this can be a percentage of gross revenues, a fixed monthly fee, of combination of the two);
- Propose duration of concession, based on time required to achieve an acceptable return on investment;
- Projections should include provision for corporate income tax, local property taxes and VAT;
- In order to assist the bidder Senqu Municipality commissioned a comprehension valuation of Holo-Hlahatsi project and facility. A valuation report can obtained from the Municipality.
13. ADDITIONAL INFORMATION
Bidder are also required to provide the following information
- Name and registered addresses of directors and any other partner to be included in the proposed business venture
- Corporate structure and details of incorporation
- Article of association, or equivalent overseas documents and latest audited accounts.
- Written power of attorney authorization the signatory and availability of other financial resources
- Current litigation information (if any)
- Availability of critical equipment and resources necessary for the running of the venture
14. BIDDER PROFILE
The bidder will be required to present a detailed profile (including audited financial statements) of each company participating in the consortium. Key evaluation criteria will include:
- Experience on similar projects.
- Experience in South Africa and in other developing countries
- Market presence and marketing ability
- Financial stability
- Prior collaboration among consortium member.
- Participation of local and historical disadvantaged group in the consortium.
15. SET OF TENDER DOCUMENTS
The complete set of documents, comprising of document to be perused in conjunction with this Terms of Reference are available for purchase from Senqu Municipality offices for non-refundable price R250-00. The set of tender document may be obtained from the LED unit, Senqu Local Municipality 19 Murray Street Lady Grey 9755 P.O .Box 18 Lady Grey 9755,
Contact: Mrs. P. Bushula bushulap@senqu.gov.za; Miss N. Methola metholan@senqu.gov.za and Mr L. Makaula.
Tel: (051) 603 0019
Closing date: 12 noon on 30 April 2010.
16. THE SET OF TENDER DOCUMENT SHALL CONSIST OF
- Tender forms
- Settlement Agreement for the Settlement of Magwiji Community Claim.
- Business plan
- Design framework
- Property Valuation report
- Environmental impact Assessment
17. DEADLINE FOR SUBMISSION OF PROPOSALS
Proposal must be submitted to Senqu Local Municipality office no later than 12h00 on 30 April 2010.
the address for submission is the same as above.
Bidders are requested to indicate their intention to submit a bid no later than —————————–.
This indication should include full contact details of the bidder to allow the Municipality to communicate responses to question from bidders and also to arrange site visits for prospective bidders. Indications of interest should be submitted via e-mail to the following email address bushulap@senqu.gov.za and should please verify the receipt of the e-mail.
18. ECONOMIC EMPOWERMENT AND SOCIAL DEVELOPMENT
Investment must be planned and managed to ensure maximum economic impact in the projects area in term of:
- Job creation within the CPA and surrounding Community;
- Skills development and transfer of skills;
- Creation of SMME opportunities as spin-offs on the proposed venture
The Municipal Manager is committed to the State’s policies and objectives on Affirmative Action and economic empowerment of Historical Disadvantaged Individuals and Historical Disadvantaged Groups. Accordingly, bidders will be evaluated in regard to the empowerment profile and their proposed initiatives to foster the empowerment of Historical Disadvantage Individuals and Historically Disadvantaged Groups (especially the historically disadvantaged who comprise all members of the CPA). Emphasis must be placed on investment in Empowerment Initiatives, SMME Development, Skill Development and Social Responsibility Community Projects.
19. OPERATIONS AND MARKETING PLAN
Proposals should incorporate a clear and detailed indication of business operation (operational plan), personnel (at various organisation levels) and skills level. It should clearly indicate the target market; demonstrate a clear understanding of the market position of the Holo Hlahatsi dam project and of subsequent changes in domestic and international tourism market conditions that necessitate a new approach to marketing the resort. The marketing plan will form one of the core elements of the overall proposal. The marketing plan should identify, with substantial precision:
- Tourism market trends as they affect marketability of the Holo Hlahatsi dam project.
- Challenges in establishment a domestic, regional and international tourism destination.
- Detailed identification and understanding of tourism expenditures and preference in specific target markets (e.g “European tourists” is not a target market; “German tourist aged between 50 and 65, with household income in excess of X, who make 1 to 3 foreign trips a year” could be a target market)
- Demonstrate understanding of markets and a plan for positioning Holo Hlahatsi to attract people in target markets;
- Pricing structures and promotion strategies that can attract members of non-homogeneous core target markets (e.g., how to attract and cater for both require bidders to indicate how affordable access can be given to different income groups, with due regard to the needs and aspirations of Historical Disadvantaged Groups.
- Marketing and promotion budgets.
20. TENDER EVALUATION CRITERIA
CRITERION FACTORS WEIGHTING%
Development concept and operations
- Soundness and attractiveness development concept
- Capital investments
- Number of zones to be developed
- Timing for development of the various zones (phases timing of each phase)
- Project implementation plan
- Envisaged impact of tourism development in the region
- Number of directors jobs and SMME opportunities 15 %
Design framework, quality & viability
- Architectural design on the development concept
- Attractiveness and reasonableness
- Capacity & expertise to contract the facilities as detailed in the development concept
- Construction method
- Environmental issues
- Maintenance plan 10%
- Financial plan financial viability
- Capital investment
- Financial model
- Equity and debt ratio
- Proof of funding commitment
- Financial projections and their reasonableness
- Assumptions
- Revenue: formal and fees 25%
Experience, track record and structure of bidding company/ consortium
- Ability to develop the proposed development concept
- Ability to manage and operate the enterprise
- Track record in design and development of similar ventures
- Projects management capability
- Quality of the management team
- Participation in similar project and proof of success of similar ventures that the consortium/company has participated in 15%
Marketing Plan
- Proof of market analysis by the bidder
- Understanding of the needs of the target market
- Access to existing marketing network
- Marketing strategy/ies for various target markets
- Capacity to market the enterprise 5%
Economic empowerment
- Participation of PDIs and Previously disadvantaged groups in the ownership and management structure, in particular members of the CPA
- Equity sharing in the investment package by local community
- Recruitment, development of skills transfer to locals
- Economic benefits in terms of jobs creation, SMME development & support
- Succession plan for management
- Social responsibility in terms of community development 25%
- Concession period
- Length of time projected for return on investment 5%
TOTAL 100%
21. COST OF TENDERING
Each Bidder shall bear all cost associated with the preparations, submission and negotiation of its Tender. No Bidder shall, in any circumstances, have any right to reimbursements of its Tender costs even in the event of Senqu Municipality not awarding any Contract at all.
22. BIDDERS’ RESPONSIBILITIES
Bidders are advised to visit and examine the Site on which the project shall be developed and its surroundings and to obtain all information may be necessary for preparing the Tender and entering into the contract, at their own risk and responsibility and will be deemed to have done so. Such Site visits shall be at the Bidder’s own expense and made in liaison with Senqu LED unit.
Each bidder and its personnel or agent will be granted permission by Senqu Municipality to enter upon the premises and lands for the purpose of such inspection, but only upon the express condition that such Bidder, its personnel or agents, will release and indemnify Senqu local Municipality and their personnel or agents from and against all liability in respect thereof and will be responsible for any personal injury (whether fatal or otherwise), loss of or damage to property and for any other loss, damage, costs and expenses however caused, which but for the grant of such permission would not have arisen.
23. AMENDMENTS
At any time prior to the deadline for submission of bids, Senqu Local Municipality may amend the bid documents by issuing addenda.
Any addendum thus issued shall be part of the bidding document and shall be communicated in writing to all purchasers of the bidding document. Bidders shall promptly acknowledge receipt addendum in writing.
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