Nkanya Eco-Lodge, a R36-million 80-bed green hotel on the Wild Coast, collapsed in January after the Eastern Cape Development Corporation (ECDC) ran out of cash.
All that remains of a project billed to create scores of unique tourism jobs for the community are eight stark gum pole structures, chopped platforms of earth, and a claimed debt of up to R5-million.
Construction started with fanfare on January 14, but crashed to a halt 45 days later as payments dwindled and then stopped, a Saturday Dispatch investigation has found.
In January, the ECDC was embroiled in a public scandal involving the alleged siphoning off of millions intended for expenditure on the Nelson Mandela memorial.
Now a team of professionals is gearing up to sue the ECDC for R5-million in unpaid fees.
ECDC risk capital manager Phakamisa George denied all claims, saying the ECDC and department of economic development, environmental affairs and tourism (Dedeat) jointly paid R3.9-million to fund the “preparation of feasibility studies and site development plans” for Nkanya.
George claims their money was spent on “viability testing of the project, including payment of some professional fees as per approved budgets” and that the ECDC had paid up “as per the approved budget”.
But Ellaine Gogo, director of Nkanya Estuary and Entertainment Investments Pty Ltd, whose family dreamed up the project, showed the Dispatch that Dedeat paid R2.9-million, which implies that the ECDC could only come up with R1.4-million, R5.6-million shy of their promised R7-million.
Johann Schoeman, director of Impendulo Design Architects and leader of the professional team, said they were drawing up legal papers.
He said that soon after work on the site started on January 14, ECDC officials, who had been full of promises, suddenly “stopped attending meetings”.
The developer, Royden Thompson of Phambili Developments, said Gogo and ECDC Butterworth official, Phakie Dudula, originally came to Port Elizabeth to ask him to be the developer. A finance structure comprising the ECDC, the National Empowerment Fund and the Industrial Development Corporation, was put in place. “ECDC would provide R7-million as risk capital,” he said.
The project went to tender and the ECDC approved the bids. Dedeat only entered the picture after construction started.
Thompson said: “The ECDC then informed the team they were not in a position to meet their commitment of R7-million due to lack of funds through non-payment of the annual budget from DTI (Department of Trade and Industries). The financial structure fell apart.”
At a recent meeting, he said: “Mr George conceded the indebtedness of the ECDC and undertook to have the payment due to the professionals and contractor approved at the next ECDC executive meeting.”
Nothing happened. — mikel@dispatch.co.za
Firms set to sue ECDC over lodge
All that remains of a project billed to create scores of unique tourism jobs for the community are eight stark gum pole structures, chopped platforms of earth, and a claimed debt of up to R5-million.
Construction started with fanfare on January 14, but crashed to a halt 45 days later as payments dwindled and then stopped, a Saturday Dispatch investigation has found.
In January, the ECDC was embroiled in a public scandal involving the alleged siphoning off of millions intended for expenditure on the Nelson Mandela memorial.
Now a team of professionals is gearing up to sue the ECDC for R5-million in unpaid fees.
ECDC risk capital manager Phakamisa George denied all claims, saying the ECDC and department of economic development, environmental affairs and tourism (Dedeat) jointly paid R3.9-million to fund the “preparation of feasibility studies and site development plans” for Nkanya.
George claims their money was spent on “viability testing of the project, including payment of some professional fees as per approved budgets” and that the ECDC had paid up “as per the approved budget”.
But Ellaine Gogo, director of Nkanya Estuary and Entertainment Investments Pty Ltd, whose family dreamed up the project, showed the Dispatch that Dedeat paid R2.9-million, which implies that the ECDC could only come up with R1.4-million, R5.6-million shy of their promised R7-million.
Johann Schoeman, director of Impendulo Design Architects and leader of the professional team, said they were drawing up legal papers.
He said that soon after work on the site started on January 14, ECDC officials, who had been full of promises, suddenly “stopped attending meetings”.
The developer, Royden Thompson of Phambili Developments, said Gogo and ECDC Butterworth official, Phakie Dudula, originally came to Port Elizabeth to ask him to be the developer. A finance structure comprising the ECDC, the National Empowerment Fund and the Industrial Development Corporation, was put in place. “ECDC would provide R7-million as risk capital,” he said.
The project went to tender and the ECDC approved the bids. Dedeat only entered the picture after construction started.
Thompson said: “The ECDC then informed the team they were not in a position to meet their commitment of R7-million due to lack of funds through non-payment of the annual budget from DTI (Department of Trade and Industries). The financial structure fell apart.”
At a recent meeting, he said: “Mr George conceded the indebtedness of the ECDC and undertook to have the payment due to the professionals and contractor approved at the next ECDC executive meeting.”
Nothing happened. — mikel@dispatch.co.za
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