High-end redevelopment proposal for Virginia Airport

ETHEKWINI municipality has received an unsolicited proposal recommending the redevelopment of the Virginia Airport site into a mixed-use development.

The proposal came from Seaworld Investment Holdings (Pty) Ltd, eThekwini's communications head, Tozi Mthethwa said, adding the development will comprise commercial, hotel, upmarket residential, offices, leisure and related developments.

“The total capital outlay for the project is R6.1 billion. The Municipality is not required to fund the development and will only offer its services and expertise in the implementation of bulk infrastructure and services,” she explained.

The proposal also claims that SeaWorld Investment Holdings (Pty) Ltd would source funding and develop a new airport, five times the size of Virginia Airport in Scottburgh.

According to Mthethwa, the proposal has been treated strictly in line with the provisions of legislations and policies governing the country's Supply Chain Management (SCM). It has also been circulated on print media and the City’s website for comments and input by the public, National Treasury, Provincial Treasury and the Auditor General of South Africa as directed by relevant legislation.

Once the City receives input and comments, a decision whether or not to accept the proposal will be made.

The Virginia Airport site is currently leased to operators for both business and recreational aviation. When the lease expired in October 2011 the City resolved to undertake a feasibility study to investigate alternative and optimal use of the site to advance the economic development aspirations of the City and grow the rates base. The Council resolution among other things, included “to consider the extension of the lease by a period not exceeding 10 years”. “Considering an extension is not similar to a commitment to extend. Therefore, no commitment was made and the City is not reneging on any agreement. While considering an extension, the City also decided to embark on a feasibility study to ascertain options for optimal use of the Virginia Airport site,” explained Mthethwa.

The study concluded that the site was no longer suitable to be utilised as an airport for a variety of reasons, including that the City no longer benefitted financial returns from that use.

Plans have been made to relocate commercial flight operators to King Shaka International Airport with the flight school operators relocating to Scottburgh.

The City and operators have met three times since the Council resolution of 2014 was made. This is contrary to reports that have surfaced which indicate that no consultation has taken place. This is factually incorrect. As a matter of fact the City and operators have agreed on the mechanisms to ensure a continuous and regular engagement until the project is concluded.

Seaworld's proposal was also communicated to the Virginia Airport operators. “The other critical point is that the City has made an offer of a new three year lease to Virginia Airport operators or completion of the relocation programme, whichever comes first. The fact is that no operator will be removed from Virginia until such time that all arrangements to relocate them have been finalised. This once again demonstrates the City’s commitment to a cordial working relationship with Virginia Airport operators and commitment to support the aviation industry.”

The proposal from the study has been assessed by a technical task team consisting of officials from SCM, Development Planning and Environment and Management Unit and the Office of the Deputy City Manager for Economic Development and Planning.

“The proposal’s attractive features include that eThekwini would receive an equity value of 10 per cent shares in Seaworld City. EThekwini would also benefit from increased rates and taxes from the proposed redeveloped land use of the Virginia site,” Mthethwa said