Durban - Consultants tasked with advising the eThekwini Municipality on the future viability of uShaka Marine Theme Park have found that the best option for the municipality is to invest R1 billion in the entity to make it profitable.
Councillors were briefed by the consultants yesterday on the options available to ensure the future of the embattled entity. The entity has been struggling financially for the past few years and has received a bailout to the tune of millions of rand from the city.
Two of the options, both of which required a R1bn investment amount, required the city to invest in infrastructure that would create a resort-like experience for visitors.
The third option was for the city to just be the manager of the property with no say in how the entity is run.
No decision has been taken yet as the report will be discussed by the city’s committees, which will make recommendations before a final decision is taken by the council.
In July this year, the consultants briefed exco members on the state of the entity and what could be done to take it forward.
Yesterday, they further detailed the challenges faced by the entity, including its high fixed costs while the nature of the business is seasonal.
Deputy mayor Philani Mavundla, remarking on the presentation, said: “On the first option of the council injecting a billion rand, you (consultants) have already said it is the most ideal one. If we don’t have a billion rand, then what?
“Let’s say we go and ‘rob’ a bank to get the billion rand, what is really going to make a return on that investment?”
ANC councillor Nkosenhle Madlala said that despite the challenges faced by the entity, the city should be proud of building such a facility.
“We should be very proud of this achievement. We are one of the very few municipalities in the country that have achieved this.”
He added that once the entity was thriving it would set the city apart.
DA councillor Andre Beegte said in the first option the city would spend R1 billion for retail, expansion of facilities and a hotel and the second option, which would also cost R1bn, would not have the retail aspect but would focus more on the leisure aspect. He said in the third option, the city would need to get an external investor to develop the entity.
Ndabo Khoza, uShaka CEO, said the entity had to take drastic steps, pointing out that the current business model was flawed in that costs exceeded the revenue.
“What these tourists want is a Sun City by the sea. We are targeting families, the hotel would be a 2 or at most 3-star hotel that would be affordable.
“There is no catering, so the people would be coming to us (uShaka food court) for food, the children would wake up in the morning and go to the slides,” he said.
He revealed that there was slight improvement in the finances and the entity was now able to pay some of its utility bills to the municipality.
Board members of uShaka said it was important for the entity to be able to stand on its own.