26 July 2004
CARAVAN PARKS – FINANCIAL VIABILITY
According to the Mossel Bay Municipality the town’s caravan parks have been run at a loss over the past few years and they accordingly have to be demolished to make way for a development, which will contribute to, rather than take from the town’s coffers. As I will refer to below, the possibility that the people of Mossel Bay will benefit from the proposed development, is by no means a certainty and promises to that effect should be considered with much circumspection.
It is not denied that it appears from the financial statements of the camping grounds, that those facilities have collectively been run at a loss. It would have been surprising if this was not the case, considering the fact that the Council has in the past years showed no political will whatsoever to make a success out of these facilities. Most of the camping grounds are open for only a few weeks in the year, even though there is ample demand amongst camping enthusiasts during the rest of the year, especially the Easter school holidays. The way in which the general condition of the camping grounds have been allowed to deteriorate in recent years is further proof of the fact that the Council made no attempt to attract campers to Mossel Bay, on the contrary the impression is created that the Council want to discourage people to visit their camping grounds. I know of many people who are willing to pay more for their camping holidays in Mossel Bay if that would mean that the facilities will be maintained properly. Many of those people are considering, however, to spend their holidays elsewhere, where they feel welcome and where they are allowed to camp in pleasant conditions. This seems, as ironic as it may sound in the light of the Council’s alleged campaign to lure more tourists to Mossel Bay, exactly what it aims to achieve.
The Council argues that there are not sufficient funds to maintain the camping grounds as they are run at a loss. If one takes the time to peruse the Council’s financial statements, it becomes clear, however, that according to the figures contained therein, only one of the three camping grounds, Dias Chalet and Caravan Park, showed a loss over the last four financial years. Whereas Dias showed a loss of R2 746 049 in the period 1999 – 2003
(1999/2000: -R537 482;
2000/2001: -R985 939;
2001/2002: -R800 133;
2002/2003: -R422 494);
the other resorts achieved a profit of R1 648 299 in the same period. The obvious question that arises from the above figures is why the other resorts, inter alia De Bakke/Santos, which showed a R1 442 018 profit in the abovementioned period, must be demolished just because one resort apparently fails to succeed..
We could unfortunately not obtain details about how the expenses for the past four years have been calculated and we had to be guided by the estimated expenses for the year 2003/2004 with which we have been furnished. I do not wish to make any judgment here as to the veracity of the estimated figures for 2003/2004 or the assumed figures for the past four years, but I do believe that those figures need closer scrutiny before they can be accepted as correct. Some of the estimated costs for the camping grounds during the 2003/2004 financial year, are the following:
- Salaries: R665 902
- Wages: R794 426
- Administrative Expenses: R451 416
- Security: R831 056
- Fuel: R133 500
- Electricity: R264 290
- Telephone: R40 800
- Waste disposal: R71 230
- Bank Charges: R41 000
We find it difficult to comprehend how camping grounds, which are, with the exception of one, used for not more than two months per year can incur expenses as high as those listed above, especially when the rapid deterioration of those facilities are there for everyone to see. If the above figures are indeed the actual expenses of the camping grounds, it is our submission that it must be possible to decrease those expenses dramatically and, coupled with a reasonable increase in the camping fees as well as a change in the attitude of the local administration, to render the camping grounds as profitable as it is supposed to be.
LEGISLATIVE CONTEXT
The Sea Shore Act, No. 21 of 1935
The notion that our coast needs to be managed and preserved for all South Africans is not a new one and has found legislative acknowledgement at a very early stage. The public interest in the sea and the sea-shore, more particularly the principle that the area is open to, and accessible for the use and enjoyment of the public at large, underpins the Sea-shore Act 21 of 1935 (“the Act”), which is still the most important piece of legislation from which the public’s interest in the sea and sea-shore must be derived.
The Mossel Bay Council would want to convince you that the general public will still be allowed on the beach and that for that reason, the objects of the aforesaid act are still achieved. Even if this development is to be different from numerous others, where the owners of exclusive properties on the foreshore try their level best to effectively annex the beach areas adjacent to their properties, there can be no doubt that the development of the designated land will adversely affect the general public’s unrestricted access to the beach. The principle that the coast is a national asset, which all South Africans must be able to enjoy equally, will in such event be violated and this alone is in our opinion sufficient justification not to allow the development to continue.
The White Paper for Sustainable Coastal Development
Management of the coastal zone, which is the area immediately landward of the sea-shore, in particular development in that area, currently is the topic of great discussion amongst both environmentalists and legislators and it is only a matter of time before legislation is promulgated which comprehensively regulates all forms of development and/or other changes to the natural state of that area. At the moment the purported contents and purpose of future legislation to the above effect must be adduced from the different policy documents, which have seen the light in recent years. In this regard the White Paper for Sustainable Coastal Development is of particular importance. It is true that the aim of the White Paper is to promote development in the coastal zone, but as is clear from its name, such development must take place in a sustainable manner and, as a result has to take cognisance of certain essential principles contained in the document.
Three of the key elements which can be gleaned from the White Paper, is that development in a particular part of the coastal zone must be for the benefit of the relevant coastal community, it must not deprive the public from reasonable access to the sea and sea-shore and furthermore that the location of the development, specifically its proximity to the sea must be necessitated by the nature of the development. If the development proposal is evaluated in the light of these criteria it should be abundantly clear that the such development is not supported by, and in fact is in conflict with the White Paper.
Benefit to Mossel Bay
We are convinced firstly that the proposed development will not benefit the Mossel Bay community at large. Very few of them will be able to invest in any way in the development and the financial spin-offs promised by the Council, are nothing more than highly speculative, and indeed risky predictions, as will be elaborated upon below. What is certain, and this is one of the arguments raised by the Council in support of the development, is that house prices in Mossel Bay will escalate dramatically if the proposed development takes place, especially if foreigners start investing buying property there. This may be a good thing for members of the council and other affluent residents in Mossel Bay, who already owns property, but how the Council can argue that a rise in property prices will be to the advantage of Mossel Bay in general, if it becomes impossible for the average man on the street to buy a house, is incomprehensible.
Access to the sea and seashore
The development will secondly most definitely adversely affect the public access to the sea and seashore. Where there now are camping grounds through which both patrons of those facilities and ordinary members of the public can move freely to and from the beach, the proposed private homes and businesses will materially affect the ease and comfort with which ordinary South Africans have up to now obtained access to the coast. Rich people pay millions of rands for properties metres away from the beach and then adopt the attitude that their money also buys them the right to decide who may visit those beaches and what may be done there. It was not long ago, to name but one example, when owners of exclusive private properties at Diaz Strand, another property development on the Mossel Bay foreshore, erected signs at the Diaz Strand parking area declaring it to be private property. Not only do property owners not want bathers on their doorstep, but very few people will feel comfortable visiting a beach, which practically is on someone else’s doorstep. It may be that in theory non-residents will still be allowed to visit the beaches, but in practice, what is now Mossel Bay’s prime beaches may very well become private beaches in the not too distant future.
Proximity to the coast
Lastly the nature of the development by no means necessitates its proximity to the sea. Whereas there is no reason why the development that is proposed cannot take place further inland, the very nature of camping holidays at coastal resorts requires its proximity to the sea or other natural feature, providing recreational opportunities. This was acknowledged in the recently released Coastal Zone Policy for the Western Cape, which proclaimed, in the segment regarding Access to the Seashore, the necessity of resort facilities and long term holiday accommodation (which is defined as camping, caravan sites and chalets and notably not the luxurious type of holiday accommodation that the Council now wants to develop) being provided at “suitable localities where recreational opportunities occur (natural harbours, fishing areas, beaches, the natural environment, tidal rivers, coastal lakes and lagoons).” As far as I know there is no similar policy or statutory document in existence, requiring developments such as the proposed one to be in proximity to the beach or any other natural feature offering recreational possibilities. It should therefore be abundantly clear that if a choice is to be made between the proposed development and the use of the relevant land for a camping ground, the camping grounds must, in the light of clear environmental policy, get the green light.
It is acknowledged that there may be purposes for which the relevant land may be used, which will serve the community even better, be even less detrimental to the environment and complies even more with the principles contained in environmental policy documents, such as the National White Paper and the Western Cape Coastal Policy than its utilisation as camping grounds. To convert the land from camping grounds to whatever such more beneficial use should be, will be relatively easy and inexpensive. If the Council’s development plans are executed, however, the opportunity to utilise the land for such beneficial purpose will be lost forever.
THE DEVELOPMENT CONTRACT
Great emphasis has been placed by the Council on the fact that the big profits that will be made from the sale of the relevant land will be utilised to substantially improve the infrastructure in the poorer sectors of the town. No mention is made, however, of the fact that the parastatal organisation, Transnet must first in terms of restrictive conditions registered against the title deeds of the relevant land, consent to any sale, and furthermore that Transnet is entitled to any profits made out of the sale of the two biggest erven to be sold. The very first paragraph of the contract between the Municipality and AttPower (“the Development Contract”), in fact states unambiguously that the Municipality owns inter alia erven 3785 and Erven 3787 and that “it is entitled to alienate it at its discretion ”. This half-truth contained in the preamble to what must be seen as the legal basis for the proposed development, unfortunately is but an example of the way in which the council has up to now failed to reveal all relevant and essential information to the public, and apparently also other role players.
Financial Viability
The only real requirement contained in the Development Contract that has to be fulfilled before the proposed development is given the green light is one of financial viability. Although the decision as to the financial viability of the development in theory ultimately lies with the Mossel Bay Municipal Council, it seems as if the exercise of that decision will in practice amount to little more than putting a rubber stamp on a conclusion that has already been reached before the matter has been referred to the Council. In terms of Paragraph 10.10 of the Development Contract, the decision regarding the financial viability of the development proposal shall be referred to the Council after the necessary calculations have been made and the Council shall not withhold and/or delay such approval unreasonably. Paragraph 10 also sets out the manner in which the financial viability of the project should be calculated. The project shall, in terms of Paragraph 10.5, be considered not to be financially viable if the raw land value plus the development costs exceed the value of the land after it has been fully served.
No mention is made in the Development Contract of the circumstances under which the project is to be viewed as financially viable, however. The only reasonable conclusion that one can, as a result, come to, is that the project is to be viewed at least as prima facie financially viable if the value of the fully serviced land exceed the value of the raw land value plus the development costs, even if the excess is only marginal. Considering the fact that the Council may not “unreasonably withhold or delay” its approval, one further has to conclude that as soon as such marginal financial viability has been established, the Council will be obliged to approve the project. In practice this could mean that the project will have to continue under circumstances where not even a fraction of the funds needed for the proposed infrastructural improvements, will be obtained. This situation will be exacerbated if the substantial development facilitation fees, which AttPower is entitled to in terms of Paragraph 12 of the Development Contract are subtracted. Only AttPower shall in terms of Paragraph 10.1 be able to “declare” the project to be “financially unviable” under the circumstances as aforesaid, and it is doubtful whether they would do so, if their own interests will be served by continuing with the project.
CONCLUSION
In the light of the above it should be abundantly clear that the profits that the Council has promised the citizens of Mossel Bay are by no means guaranteed and that in fact the Development Contract was drafted to benefit the development facilitator rather than the Mossel Bay community. Whereas not only the people of Mossel Bay, but also the thousands of holiday makers that visit the town annually, will be deprived of their right to enjoy and share in one of our country’s greatest natural assets, the only thing that is sure about the proposed project, is that it will detrimentally affect the lives of thousands of South Africans now and in the future. Mossel Bay will become only another example of a place where ordinary South Africans will have to relinquish what is theirs to benefit a few ultra rich countrymen and foreigners.
Not only will the sale and development of the relevant land not be in the best interest of Mossel Bay and the region, but it is clear furthermore that the nature of the proposed development does not require a close proximity to the sea. There are in fact numerous other possible land uses, which are dependant on a location in close proximity of the sea, which will serve Mossel Bay and the region better and which will indeed amount to sustainable development. Should a more suitable and sustainable use for the relevant land be found at a later stage, the caravan parks can always at that stage be re‑developed for that purpose, but if the development which is now proposed, is allowed to continue, that opportunity will be lost forever.
Every generation holds the environment in public trust for the generations to come, and has an obligation to protect it as the people’s common heritage. We trust that you will not take your obligation as trustee of our natural heritage lightly, that you will realise how important it is that the proposed development does not take place, and that you will, when it is asked of you to “cast your vote”, do so in the interest of the ordinary South African. In doing so you will preserve the right of the majority of people in this country to share in our rich natural heritage, which right unfortunately is becoming more and more of a privilege, reserved for the precious few with enough money to pay for it.
Yours faithfully
Boeka Nieder-Heitmann
Redaksioneel 22 September 2004
Dit is met gemengde gevoelens dat ek u moet inlig dat die Mosselbaai se DA-Stadsraad gister uit die kussings gelig is en dat die nuwe Burgermeester Mr Michael Caselse is. Op sy en sy nuwe Raad se skouers lê die groot verantwoordelikheid om die gemors wat die vorige Stadsraad onder Andre Nel veroorsaak het reg te stel. Die gevloek en geskel waarmee die vorige Burgermeester en sy trawante die raadsaal verlaat het nadat hulle verslaan is is tekenend van die minagting waarmee hulle hul mede Mosselbaaiers behandel het. Ons kan net uitsien na 'n baie groter openheid wat betref sake wat ons almal raak. Sterkte aan Maatjie en sy span vir die groot taak wat voorlê.
Boeka Nieder-Heitmann |