The protracted and complex legal wrangle between Transnet and Port Elizabeth developer Charles Erasmus over the lease of prime beachfront land is adversely hindering the unlocking of first-class real estate for development.
Major projects such as the Nelson Mandela Statue of Freedom, one of the municipality's Vision 2020 projects, and the overall development of the Port Elizabeth harbour and waterfront, have stalled because they cannot proceed without the resolution of the dispute, which dates back to 2003.
Now business bodies and the municipality are calling for government intervention aimed at speeding up the resolution of the matter so that business opportunities are exploited in that area.
The Freedom Statue had been planned to be completed by 2010 with the view of making it a tourist drawcard during the soccer World Cup, but this dream now seems far-fetched as the parties continue to wrangle.
Both the municipality and industry have raised concerns about the delay in resolving the matter. The disputed 65ha area - which incorporates part of the beachfront and borders the manganese ore dump and the tank farm - was leased to Tsogo Sun in 1999 when it made a bid with Emfuleni Resorts to develop a casino on it.
The consortium lost the casino bid, but maintained its lease on the land, which it then leased to Erasmus?s company, Southernport Developments. Transnet then tried to cancel the lease and Erasmus took it to court. He lost the first round, but appealed and in September, 2004, the Supreme Court ruled in his favour.
However, because the lease agreement was "illegal" since a senior Transnet official signed it without his company's knowledge, the court acknowledged that it was "reasonable" for Transnet to cancel the agreement.
The court asked the two parties to try to reach an agreement. Since then, they have been dragging each other to court without a solution to the matter. Arbitration is under way.
Rob Jefferson, of Rushmere Noach, representing Erasmus, said on Monday that nothing new had happened since the arbitration process.
Public enterprises spokesman Gaynor Kast declined to give details, saying the case was sub judice. "This is a complex matter and cannot be resolved overnight. An announcement is expected to be made soon.
"It would be premature to pre- empt the outcome at this stage," Kast wrote in an e-mail reply to The Herald's questions.
Mandela Bay Development Agency chief executive Pierre Voges said his organisation had made progress in its discussions with Transnet to relocate the tank farm to Ngqura.
"However, it must be remembered that the land in dispute cuts through the manganese ore facility. It is therefore important that there be some kind of finality in respect of the legal arbitration between Transnet and Southernport Developments before any final decision in respect of the relocation is made," Voges said.
The MBDA had completed a master plan for the development of its mandate area, which includes the beachfront, he said, but there could be no progress until the lease issue had been settled.
"We have recommendations as to how that land should be utilised in our master plan, so that it contributes tremendously to the development of the city," he said. "The legal wrangle is a huge hurdle."
Voges said the Supreme Court of Appeal had given the lease to Southernport, but the terms of the lease should be negotiated in good faith between the two parties. "Until that happens, nothing can move forward," he said.
Nafcoc Nelson Mandela Bay yesterday called for the intervention of Public Enterprises Minister Alec Erwin to resolve the matter.
Eastern Province Herald
Publisher: I-Net Bridge
Source: I-Net Bridge
