Durban businessman and councillor Alan Beesley questions the accountability of our city’s municipality and lack of transparency with regards to the Point’s future.
If ever there was a symbol of unrealised opportunity that is symbolic of Durban it would be the Point. Trumpeted in countless newspaper headlines as a catalytic project akin to Cape Town’s waterfront and even the Sydney Harbour Foreshore, Durban’s Point remains an unrealised dream.
It is representative, many would say, of the general malaise in eThekwini. The city has got so much going for it – but for the fact that it is woefully mismanaged and strategically rudderless.
The Point has received huge press, much of it justifiably critical. Twenty years ago when newspapers crowed about the impetus it would offer, the Point’s future seemed bright.
The city, in conjunction with Tongaat Hulett, spearheaded a redevopment plan that brought one of the city’s potential real estate gems to life.
The investment of R750-million into Ushaka Marine World and the orderly precinct plan for the Point in 2003 inspired private investors who poured hundreds of millions or possibly billions into an area with unmatched sea and harbour views.
Back then the mood was vibrant, in stark contrast to today when things seem iffy at best.
On the agenda of the city’s Municipal Public Accounts Committee meeting in November 2022, was an item relating to catalytic projects. It referred to the Point and its inner-city regeneration as a key catalytic project with huge potential for the city. The agenda made reference to a 2017 infrastructural provision: the balance of the project will cover a 10-15-year horizon at between R30-R50-billion worth of private/public sector investment creating 6 750 permanent jobs and 11 000 construction jobs with an annual rates contribution of R200-million.
Of course, this is the usual unverified, ridiculous hyperbole around the Point meant to make eyewatering headlines, but with little substance.
The only likely investment at the Point in the near future is a city plan to upgrade the watermains costing R272-million.
The agenda items referred to foreign direct investment worth R3,5-billion, but without any more specifics, save for the following line: UEM Sunrise to update the city on progress … as part of phase 1. The municipality is still waiting (since 2019) for the official commencement of the foreign direct investment of about R3-billion by the Malaysian partner.
The master developer of the Point waterfront project is the Durban Point Development Company (DPDC) which is a 50/50 joint venture between eThekwini and Roc-Union. The majority shareholder in Roc-Union being UEM Sunrise (UEM) a publicly listed Malaysian company who were meant to inject billions into the project.
It was interesting to read an article that appeared in the Malay Mail in August last year saying that UEM’s wholly owned subsidiary in South Africa planned to disinvest its entire interest of 80,4% held in Roc-Union for R146-million.
The story named Olive Investment Trust as the buyer, which also intended to purchase the remaining 19,6% of Roc-Union held by a local investor.
The story said the rationale for the deal was this: The decision to dispose of its (UEM’s) entire equity in Roc-Union is in line with the company’s turnaround strategic plan as it allows the company to realign its operations geographically and redirect resources to businesses and areas which offer greater potential.
In December the Malaysian edition of the Market’s Edge carried another story quoting a bourse filing relating to UEM. This said the company had aborted its plans to dispose of its Durban stake. UEM and Olive Investment Trust had mutually agreed to discontinue the deal, the story said.
During the year plus I have been in council, the narrative relating to the Point and the promised Malaysian investment has not changed. It seems clear that UEM has lost it appetite for further investments in eThekwini and the Point.
I intend to ask in council what is happening with the DPDC, the joint venture between the city and the Malaysians and their local partners. I can’t recall it ever being discussed. This is an entity 50% owned by the municipality, and yet it doesn’t seem to feature anywhere and nor is it subject to any scrutiny that I am aware of.
I know that some media attempts to find clarity or general transparency about the workings of the DPDC and its development mandate have been completely stonewalled.
This is yet another disgraceful example of unaccountability in government.
Going forward I intend to ask the following questions of the DPDC:
1. Are the Annual Financial Statements made public? And if so, where could they be found? And if not, why not?
2. Is the DPDC being charged standard rates and normal municipal service fees?
3. Who are the current directors of DPDC?
4. What were the terms of conditions of Roc-Union’s Investment in DPDC?
5. Is Roc-Union entitled to sell its stake in DPDC?
In terms of the sale of Roc-Union’s share in DPDC it would also be interesting to know more about the potential purchaser – Olive Investment Trust – and any other potential buyer going forward.
This is a key Durban asset and the people of the city own half of it. We should be kept fully abreast of what is going on and have input. If the local investor sells, what are the terms governing this sale, if at all? It would seem to many that the local investor could make a small fortune for doing very little or nothing at all.
It would also be good to understand the real reason for UEM wanting to exit the deal.
There is an interesting story in the archives of the Sunday Tribune dated June 1999 that might go some way to explaining the genesis of the Point “ownership”. It relates to a spat between Jacob Zuma’s corrupt financial adviser, Schabir Shaik, and Bheka Shezi. The story refers to a court ordering Shezi to pay Shaik, who was later cut out of the deal with the Malaysians.
How a local company came to be central in negotiations with the Malaysians and later shareholders in a deal that involves public land is questionable. (The Malaysians reputedly paid R100-million for their stake of the 55ha Point).
The poor state of affairs in eThekwini (governance, infrastructure, etc) has potentially cost the city billions in investment. Continued opaque dealings in what is essentially a city asset at the Point only add to the mess.
We deserve clarity and finality around the Point development. We deserve transparency on every cent spent by this city and every deal it hatches.
Durban businessman Alan Beesley is a chartered accountant and an ActionSA councillor in eThekwini. He sits on the city’s Municipal Public Accounts Committee.