Durban - A batch of documents leaked to the Daily News has revealed how eThekwini Municipality gave one of its struggling entities, uShaka Marine World, a head start by allowing it to pay an annual rental fee of R1.
The world-class marine venue was opened in 2003 and since then, it has occasionally received bailouts from the municipality. The last bailout of R160 million was received in May last year after the business was badly hit by the Covid-19 pandemic.
Now, it appears that the municipality had earlier started making plans to ensure that the business was shielded from paying high rental fees, by greenlighting the R1 rental payment.
In 2005, one Sifiso Zulu (it is not clear whether this is the late Prince Sifiso Zulu) ceded control of the land where the marine park is built to the entity, now owned by the municipality.
Part of the agreement was that the lease would be indefinite, meaning that it has no expiry date. However, it was agreed that it could be terminated following mediation processes.
Then came the issue of the annual rent, which was pegged at the said fee.
“This lease shall be for an indefinite period commencing on the date of the execution hereof, and terminable only on six (6) months written notice to that effect by the Lessee provided that notice shall not be given prior to the occurrence of any of the events referred to in clause 17.1 hereunder…
“The rent for the property shall be the sum of One Rand (R1.00) per annum, payable annually, in advance to the Lessor at uShaka Marine World, 1 Bell Street, Durban, or at such other address as the Lessor may in writing from time to time appoint,” reads the lease document, which was signed in early 2005.
Asked about the rental agreement, the spokesperson for eThekwini Municipality, Msawakhe Mayisela, defended it by saying it was allowed by law.
“Ushaka is owned by DURBAN MARINE THEME PARK PTY LTD (Ushaka) as per the attached proof (of) ownership and it shows that the property was registered in their name in 2003. Regarding the R1.00 rental per annum, regulation 13(2) of the Municipal Asset Transfer Regulations does make provision for the rental of a municipal asset to be below market-related rental, so this is well within the law,” Mayisela said.
Early this month, in the Pietermaritzburg High Court, Thoba Portia Poyo-Dlwati nullified a similar lease whereby a private company was paying a rental of R1 per annum. The company later subleased the state property and charged a rental fee of R70 000.
It is not clear how long the uShaka arrangement will remain in place as the current chief executive of the marine park, Ndabo Khoza, said they now owned the land on which they were operating.
“Kindly note that uShaka Marine World is not leasing the land in which it operates. It has full title to this land and it is also part of our assets on the balance sheet,” Khoza said.
“However, we do have a lease agreement with the South African Association for Marine Biological Research who are the operators of Sea World.
“This forms part of the partnership for the services that they provide in operating and managing all the marine-related activities within the park, more specifically Sea World. It is also part of the pre-construction agreement which facilitated the closure of the old Durban Sea World and consequently its relocation to uShaka Marine World.”
Daily News