Task team to rescue tea estates

The Eastern Cape government has appointed a task team to rescue the embattled Magwa and Majola tea estates, in which millions of rands have been invested.

Rural development and agrarian reform MEC Mlibo Qoboshiyane announced the intervention yesterday.

The task team will be led by Eastern Cape Rural Development Agency (ECRDA) CEO Thozi Gwanya. He will be joined by officials from Qoboshiyane’s department, provincial treasury, the Eastern Cape Development Corporation (ECDC), department of economic development and environmental affairs (DEDEA), Magwa, Majola and the national Department of Rural Development and Land Reform.

The intervention follows an outcry over the provincial department of rural development and agrarian reform’s (DRDAR) request for a further R66-million to rescue the estates. Over the past 10 years the state has sunk more than R300-million into Magwa alone.

DRDAR spokesman Mvusiwekhaya Sicwetsha said a project steering committee (PSC) had been set up and would oversee the action plan aimed at hauling the estates out of their hole.

Sicwetsha said ECRDA was developing business plans for an integrated and commercially sustainable model for the remainder of the area. “Capital injection of more than R80-million for both Magwa and Majola is being sourced through various engagements. There is a dormant dairy, hatchery, fallow agriculture land, forest opportunities and tourism potential.”

He said ECRDA was working towards conducting a due diligence for Magwa and Majola.

“A meeting with the tea broker has been held to discuss various business transactions and review the service level agreements with the broker and a comprehensive report to be submitted to the MEC will soon be drafted.”

A letter was submitted by ECRDA to the ECDC interim CEO with a detailed motivation to place Magwa under business rescue. Sicwetsha said there would be an in-depth investigation of the legal aspects of a business rescue.

Magwa is owned wholly by the Eastern Cape government through the ECDC but it is now being transferred to the provincial department to be a subsidiary under ECRDA.

Amounts sunk into the estates over the years include:

lFrom 2003 to 2007, through ECDC, more than R80-million as transfers;

lIn 2008, the Department of Agriculture injected R20-million through Uvimba Bank;

lIn 2009-10, the agriculture department set aside R30-million for them;

lIn 2011-12 the provincial government pumped R42-million into Magwa;

lIn 2012, R60-million to Magwa; and

lIn 2012-13 the ECRDA budgeted R50-million for Magwa, Majola, Kangela citrus farms and the Agrarian Research Development Agency.

ECDC spokeswoman Nopasika Mxunyelwa said all matters relating to Magwa were being handled at a provincial level through the PSC.

“ will arrive at a determination on the future of the tea estate and suggested remedial actions,” she said. — mphumziz@dispatch.co.za