UShaka needs R24m to cover net losses
1 December 2005, 10:13
A financial report on the performance of the R700-million uShaka Marine World has revealed that Durban will have to contribute R24,2-million to cover the park's net losses.
But the city council had budgeted for the anticipated shortfall and the money will not take the form of a new loan because the municipality has an existing agreement with uShaka.
The chairperson of the economic development and planning subcommittee, Deputy Mayor Logie Naidoo, said the committee always provided for loans and subsidies for entities of the city, like uShaka and the ICC, in its annual planning.
The report, which was tabled at the eThekwini Municipality executive committee, showed that uShaka was behind target in most of its operations.
Ticketing revenue was only 71 percent of target budget for October, and just 71 percent for the year to date. Catering revenue was less than half for the past month, at 48 percent of its budget for the month.
There have been several complaints from retailers in the past that there is not enough traffic through uShaka's Retail Village Walk to sustain business.
The financial report has shown that shops managed by uShaka operating in the village walk and aquarium outlets were desperately behind target for October.
UShaka's B1 shop, situated at the entrance of the village walk, which sells memorabilia and clothing, only achieved 30 percent of its budget and was R110 815 behind its target. The F1 shop, which sells nautical products, was slightly worse off, only achieving 29 percent of its budget and trading R56 734 behind its target.
The Durban theme park to date has underachieved in almost every area, but there are at least some pockets of success. The popular Cargo Hold restaurant has to date managed to meet 92 percent of its budget, and the Phantom Ship, which holds restaurants and the aquarium, has achieved 96 percent of its budget.
This is not the first time the eThekwini Municipality has had to bail out the theme park.
The management of uShaka Marine World asked Durban's executive committee for a loan of R174,5-million to service its multimillion-rand debt in April.
And late last year, the executive committee approved another R9-million loan, mainly to meet the operational cost of running the facility.
Durban City Manager Michael Sutcliffe said the council had taken a decision almost a year ago to restructure the loan agreement with uShaka to extend its seven-year agreement to 19 years to give the park a fair chance to become self-sustaining.
Naidoo said that from the inception the council had been providing annually to the ICC and uShaka.
"We anticipate that in the first 10 years it will not be profitable, and the city will carry them until they are profitable," he said.
But the city council had budgeted for the anticipated shortfall and the money will not take the form of a new loan because the municipality has an existing agreement with uShaka.
The chairperson of the economic development and planning subcommittee, Deputy Mayor Logie Naidoo, said the committee always provided for loans and subsidies for entities of the city, like uShaka and the ICC, in its annual planning.
The report, which was tabled at the eThekwini Municipality executive committee, showed that uShaka was behind target in most of its operations.
Ticketing revenue was only 71 percent of target budget for October, and just 71 percent for the year to date. Catering revenue was less than half for the past month, at 48 percent of its budget for the month.
There have been several complaints from retailers in the past that there is not enough traffic through uShaka's Retail Village Walk to sustain business.
The financial report has shown that shops managed by uShaka operating in the village walk and aquarium outlets were desperately behind target for October.
UShaka's B1 shop, situated at the entrance of the village walk, which sells memorabilia and clothing, only achieved 30 percent of its budget and was R110 815 behind its target. The F1 shop, which sells nautical products, was slightly worse off, only achieving 29 percent of its budget and trading R56 734 behind its target.
The Durban theme park to date has underachieved in almost every area, but there are at least some pockets of success. The popular Cargo Hold restaurant has to date managed to meet 92 percent of its budget, and the Phantom Ship, which holds restaurants and the aquarium, has achieved 96 percent of its budget.
This is not the first time the eThekwini Municipality has had to bail out the theme park.
The management of uShaka Marine World asked Durban's executive committee for a loan of R174,5-million to service its multimillion-rand debt in April.
And late last year, the executive committee approved another R9-million loan, mainly to meet the operational cost of running the facility.
Durban City Manager Michael Sutcliffe said the council had taken a decision almost a year ago to restructure the loan agreement with uShaka to extend its seven-year agreement to 19 years to give the park a fair chance to become self-sustaining.
Naidoo said that from the inception the council had been providing annually to the ICC and uShaka.
"We anticipate that in the first 10 years it will not be profitable, and the city will carry them until they are profitable," he said.
- This article was originally published on page 6 of The Mercury on December 01, 2005
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