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Further progress on Forestry Restructuring
25 January 2005

Minister of Water Affairs and Forestry, Ms Buyelwa Sonjica, today signed agreements, which will transfer the management of 140 000 hectares of forest land to new operators. This is part of Government's ongoing restructuring of state owned forests.

One agreement relates to 25 000 hectares in the Hogsback and Stutterheim areas of the Eastern Cape where Amathole Forest Holdings and its BEE partner, Wildbreak Investment Holdings will take over the running of the forests. The other covers forests in the Southern and Western Cape where management of approximately 115 015 hectares of state forest land will be undertaken by BEE company Cape Timber Resources.

In terms of the restructuring agreements, 75% of the new forestry businesses will be sold. Government will retain 25% with 9% reserved for SAFCOL and DWAF staff, 10% for future BEE opportunities with 6% retained by the State for at least 5 years.

These transactions are in line with government's policy of exiting from direct forest management activities while promoting Black Economic Empowerment in the forestry industry. At the same time, land, which is less suitable for forestry, will be converted to other uses or reserved for conservation.

Thus in the Southern and Western Cape, 44 000 hectares of marginal State forest land will be clear felled and handed over for other uses including:

* conservation: 29 000 hectares;
* agriculture: 9 000 hectares;
* community forestry: 6 000 hectares; and
* settlement development: 200 hectares.

The Minister also assigned management responsibility for the Tokai Cecilia State forests in Cape Town to SANParks. This follows Cabinet's decision in 1996 to develop the Cape Peninsula Protected Natural Environment. Tokai and Cecilia forests (1 001 hectares in extent) are located in the Protected Environment area and contain important lowland and mountain fynbos as well as pockets of Afro-montane forest, which need to be maintained. Eventually, the two forests will be incorporated into the Table Mountain National Park (TMNP).

In the interim, Tokai and Cecilia will be managed by MTO in terms of a 20 year lease during which they will gradually clear-fell the area where after it will be released for conservation. MTO will also make a financial contribution to the initial rehabilitation of clear-felled areas.

SAFCOL will also transfer all of its eco-tourism business activities and personnel at Tokai and Cecilia to SANParks. The eco-tourism business includes the picnic site, the guesthouse and the tearoom, the world-renowned arboretum that has been declared a national monument, plus mountain biking and other recreational activities.

The forest land is not sold as part of the packages, but leased to the successful bidders for 70 years with an option to renew for a further 35 years. The new owners will pay substantial lease rentals to the Department, which will be used to compensate any successful land claimants or revert to the State.

These agreements follow two others, which were concluded in 2001 with Singisi Forests in the Eastern Cape and the Siyaqhubeka consortium in KwaZulu-Natal. The major outstanding transaction covering Komatiland in Mpumalanga is currently awaiting the outcome of a Competition Tribunal hearing.

Enquiries: Mr Trevor Balzer
Tel: (012) 336 8744
Fax: (012) 336 7754
Cell: 082 807 3544
E-mail: ycc@dwaf.gov.za

Issued by: Department of Water Affairs and Forestry
25 January 2005