By Charlotte Mathews

The planned R260m Claridges Hotel in Green Point, Cape Town, has suffered a blow after Southern Sun Hotels announced that it had informed the developer it would not take the 10-year management contract for the hotel.

This comes after Southern Sun said in December that it had "secured" the management contract. Though, it said that it had been offered the contract, subject to further negotiation and finalisation.

Southern Sun said it would have no further links with Claridges and the developers, Phelan Holdings.

Laurie Wener, of Pam Golding Properties, which is selling sectional title units in the hotel, said the group was not aware of Southern Sun's statement but she was confident there would be other takers for the contract.

She said construction of the hotel has not yet begun but referred questions about the delay to Phelan Holdings owner Paschal Phelan, who is away until mid-April and cannot be reached for comment. In original statements about the development, construction was to have begun in early 2004, to be completed by the middle of next year.

The hotel is expected to be 10 storeys high with a pool and sundeck on the eleventh floor. Its accommodation would range from one-bedroom suites to two presidential suites and it would include amenities such as two restaurants, a spa, a gymnasium, a library and a children's club.

Business Day 06 April 2004