uShaka requests financial bailout from the City

USHAKA Marine World has found itself in a desperate situation financially as a result of the national lockdown this year and the inability to trade.

The theme park recently tabled a report before the city’s executive committee (exco), requesting a R66.9 million financial boost from eThekwini Municipality to help with the park’s finances, stating the entity had been hard hit by Covid-19 regulations.

Exco declined the request, offering a R15 million bailout instead.

Commenting on the request, Mantombi Tofile, acting marketing executive at uShaka Marine World, said uShaka’s current financial situation was a result of the entity not trading since the lockdown began in March.

Since the park reopened, its operations have not generated much revenue and it is surviving on its reserves.

“The entity effectively started trading in October, as did some of our tenants who were affected badly because they didn’t trade due to closure of the theme park. During this time, it must be noted that fixed operating costs still needed to be paid,” she said.

ALSO READ: uShaka Marine World to be revamped

However, commenting on these claims, councillors rejected that the troubles at the park were due to the lockdown.

Democratic Alliance (DA) eThekwini caucus leader, Councillor Nicole Graham, said uShaka had obviously had a tough time during lockdown and a lot of this was out of management’s control, however there had been an issue of decreasing footfall for the past two years before the Covid-19 pandemic temporarily closed its doors.

“The municipality is financial surety for municipal entities, so it is a particular concern when it comes to uShaka and Moses Mabhida Stadium, which have both been batting financially. The reality is they can’t keep coming to the municipality for money and being a burden on ratepayers,” she said.

Graham said the DA’s position is that uShaka needs to go to exco with a proper turnaround plan on how they are going to go forward, and make the attraction appealing to people year round, so that people are going to the park regularly.

“Unfortunately at this stage the projections are not very good. uShaka will need a bit of financial cushioning because of Covid, but I also think there’s a bigger picture here, and this is that uShaka is failing to attract guests as it should be, and this is a concern. It can’t be a continuing drain on the rates reserve of the city, it has to be able to stand on its own two feet,” she said.

Responding to uShaka’s report, the municipality said while it recognised that the theme park was of strategic importance, it (the municipality) was also facing financial challenges and had not budgeted for such an eventuality.

The amount of R15m from outside organisations could be made available to the theme park.

ALSO READ: Move to halt City’s plans to extend uShaka pier

It approved the entity’s request to repurpose a R15 million grant funding for capital projects and to use the R6.9 million from the South African Association for Marine Biological Research until the cash flow situation improved.

It also agreed to suspend the utility payments of about R23 million.

Mayor Mxolisi Kaunda said the chief executive of the entity should present the turnaround plan to the council.

Commenting on this to Berea Mail, Tofile said: “We are preparing a turnaround strategy which will be shared with the shareholder, thereafter it will then be publicised as soon as the shareholder has had an opportunity to familiarise itself with the contents. Until such a time, we are unable to divulge the contents of this document.”

Caxton Local Media Covid-19 reporting

Dear reader, As your local news provider, we have the duty of keeping you factually informed on Covid-19 developments. As you may have noticed, mis- and disinformation (also known as “fake news”) is circulating online. Caxton Local Media is determined to filter through the masses of information doing the rounds and to separate truth from untruth in order to keep you adequately informed. Local newsrooms follow a strict pre-publication fact-checking protocol. A national task team has been established to assist in bringing you credible news reports on Covid-19. Readers with any comments or queries may contact National Group Editor Irma Green (irma@caxton.co.za) or Legal Adviser Helene Eloff (helene@caxton.co.za). At the time of publication, the contents of this feature mirrored South Africa’s lockdown regulations.

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