Spa white elephant: Saturday Dispatch

MEC must account for millions spent on luxury resort

THE Eastern Cape and national governments have spent nearly R35million on attempts to restore a spa resort in Maletswai Municipality. The Aliwal Spa, which previously employed about 100 locals, now has a few employees.

Responding to parliamentary questions from DA MPL Ross Purdon, tourism MEC Sakhumzi Somyo said: “There have been some infrastructural upgrades done on the Aliwal Spa in the past to attract potential investors.”He said a feasibility study was conducted in 2003 with funding from the Eastern Cape Development Corporation (ECDC).

“In 2004/05, several investors showed interest in investing, but a local development agency experienced challenges in complying with private-public partnership processes and the project was deregistered,” he said.

In the 2007/08 financial year, the department allocated R2.5million for renovating chalets, fences, tennis courts and other facilities. In the 2009/10 financial year, the national Department of Tourism allocated R19million for upgrading the spa, and the provincial department raised R4.9-million.

Somyo said the national department has committed a further R8-million for other infrastructure upgrades. The funding is earmarked for renovating the super tube, children’s playground, parking bays, replacing water pumps, a security upgrade, fill-in defunct swimming pools, and demolishing dilapidated buildings.

“The development of the feasibility and business plan for the commercialisation of the spa, which is partly funded by ECDC, has committed R566 666,” Somyo said.

He said the spa had never been a profitable standalone entity. “The ultimate aim of activities to be carried out with the assistance of NDT [national Department of Tourism] and the ECDC is to create a value proposition for potential investors,” he said.

The Joe Gqabi Economic Development Agency and the municipality are looking for an investment of R47-million for the spa. Agency spokesman Sixolile Makaula said they are offering technical support in partnership with the ECDC and the Eastern Cape Parks and Tourism Agency to repackage the spa for potential investors.

“It is only this year [2014/15] that Dedeat [Department of Economic Development, Environmental Affairs and Tourism] is considering providing financial support as per the request from [the agency] for funding.

“The main reason is that the project was previously funded through the municipal support grant for local economic development under Maletswai. The [grant] is now defunct and the resort now is under [the agency] as one of its catalytic projects,” Makaula said.

Purdon said: “Government has spent millions on that place but only a few upgrades can be pointed out. So we want to know what happened to the money.”