R160m, that’s the cost of eThekwini’s bail out for uShaka Marine World
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DURBAN - THE eThekwini Municipality has once again come to the rescue of the cashstrapped uShaka Marine World Theme Park as it announced a R160-million bailout as part of efforts to save the entity from total collapse.
Durban mayor Mxolisi Kaunda revealed yesterday that uShaka would receive R160m this financial year, adding that an amount of R6m would be used by the entity to research how it can reinvent itself and attract new visitors.
Kaunda announced the funding of the tourist attraction while tabling his budget for the 2021/22 financial year.
In his speech, Kaunda said he had engaged with the management of the entity and was confident it would be turned around.
“We are confident in the leadership of uShaka. The one thing we have insisted upon is that there should be no job losses at the entity,” he said.
Kaunda said Durban has two flagship entities critical for the city’s tourism industry: the uShaka Marine Theme Park and Inkosi Albert Luthuli International Convention Centre (ICC).
“Before the hard lockdown, the ICC was performing very well with revenue and operating profits exceeding budgets. We are going to continue to support the entity as we are still grappling with the pandemic,” Kaunda said.
“In this regard, we have allocated grant funding of R15m to help the ICC remain a going concern.”
He said on the other hand, uShaka
Marine World was facing serious challenges and needed a lot more assistance.
“UShaka was facing critical challenges prior to Covid-19. It found itself experiencing serious cash flow challenges. The loss of income since the lockdown has further impacted its revenue,” said Kaunda.
He said the entity had developed a turnaround strategy, and that the grant payments in the past two financial years
were made to keep uShaka fully operational.
In a report tabled before the executive committee earlier this year, the city revealed that it was considering drastic action to save the facility, including dissolving the entity and incorporating it within the city. It said the entity was not doing well and was in debt. Recovery of its ballooning debt was doubtful, it said.
At that time, the entity had requested
financial assistance of R66.9m from the municipality. uShaka announced that it had to re-purpose millions in internal funds designated for other functions, and stop paying some of its bills in order to stay afloat.
The municipality, however, declined to offer the full cash injection at that time, saying it was also facing financial difficulties and offered just R15m in financial assistance.
UShaka is one of the biggest marine theme parks in Africa which includes a water park and an aquarium that has 300 species of marine life including sharks, rays, dolphins and turtles and 10 000 sea creatures.
Kaunda said the entity has embarked on cost-cutting measures and was aggressively pursuing revenue-generation opportunities.
“We have set aside R160m in the current financial year, with an amount of R6m allocated to undertake a feasibility study to explore how the theme park can be repositioned to attract more visitors.”
DA councillor Thabani Mthethwa said uShaka was a municipal entity and the municipality had to intervene from time to time.
“What should not happen is for uShaka Marine to survive on handouts from the municipality. They have to come up with a turnaround strategy; it’s not just Covid-19 that put them in such a desperate financial situation. Even before Covid-19, the park was not doing well financially, it was mainly dependent on the municipality, so that is not sustainable.
“Until such time that they come with a reliable strategy, as the DA we would be very reluctant to support any more handouts,” he said.
IFP councillor Prem Iyir party supported the move.
“In order to keep it viable and operational, the IFP supports the recommendations, considering the imminent arrival of the third wave. It makes business sense to lend support to uShaka.”