Africa Wild

Richprins wrote: ↑Thu Sep 12, 2019 6:39 pm This place will probably never break even, never mind turn a profit, and I repeat that the reason for its inception was for the ANC to hold free gatherings for their cadres there, end of story.

Richprins wrote: ↑Thu Sep 12, 2019 6:39 pm This place will probably never break even, never mind turn a profit, and I repeat that the reason for its inception was for the ANC to hold free gatherings for their cadres there, end of story.

Richprins wrote: ↑Tue May 23, 2017 7:13 pm The Myths of Privatisation and Job Creation Benefits

The developments and trends in Kruger contribute and will contribute to net job losses and a decrease in precious tax revenue for the struggling local municipalities, in my opinion.

Private entrepeneurs love to use Kruger as a base, simply because they have to pay for precious little as far as overheads and maintenance are concerned, as mentioned before. It is a once-off monthly rental fee, or a share of profits (7% regarding shops, for example), whichever is higher.

Take the Skukuza Hotel for example, which may be privatised upon completion, by SP's own admission. Kruger does not pay any municipal taxes, refuse removal, water and sewerage, or company tax. (Sanitation and refuse removal is in-house and a well established infrastructure, largely paid off and maintained with taxpayer/tourist money). Should the equivalent structure be erected outside the Park, it would contribute many millions in rates and taxes to the fiscus annually. The same for a restaurant, through rent of premises or paying off a bond after construction.

It is unclear what rate Kruger pays to Eskom for its power, or if it is in debt. It will most certainly never have its power cut off for non-payment, compared to a private operation, and has a huge generator in all big camps. Private businesses outside the Park generally pay for power (extra charges on which are levied by municipalities so THEY can make a profit), water/sewage, refuse removal etc. on a monthly basis. Maintenance to their properties, and especially very expensive security including guards and alarms, are an added expense for their own pockets, not required for Kruger operators.

All of the above create jobs in addition to municipal revenue.

Take for example "Maphuza Lodge" , newly built near Hazyview by a private owner. The owner has taken out a huge bond or loan to finance the construction, adding to bank income in the local branch or nationally, probably paying the monthly salary of a bank worker or more. Building costs support a whole range of businesses in the area, and the project employs hundreds at the businesses and on site for up to a year, if one takes a 250 bed double-storey hotel like Skuks. (Yes, Skuks may provide the same in general, but more about that later!)

Accommodation is also built for 20 permanent workers at the Lodge, more employment for builders. During the building process, a very risky time, 2-5 security guards are employed, providing a source of income guaranteed to local families for a year, while 4 of these are employed permanently once the lodge becomes operational. The local alarm/response company is permanently involved, adding thousands of rands worth of security equipment to the turnover of a local supplier, as well as helping the security company keep heads above water. A security fence is also erected, more financial input and employment in the short term.

In the long-term, electricians, plumbers, painters, thatchers etc. receive regular callouts for maintenance to the lodge. Meterials are sourced locally, with the thatchers having to buy grass from suppliers, for example. More new permanent employment help.

The lodge pays huge amounts for building and liability insurance annually.

The lodge buys two game drive vehicles, with the exhaustive and expensive specs required to be a private entrant regarding Kruger. 3 guides are permanently employed, with benefits to local economy even as far as annual vehicle license, maintenance etc.

Supply chain benefits regarding local providers of food, beverages and general supplies are huge and permanent, no tenders/ extended contracts required, or franchise cost extensions for the open restaurant at the lodge. It is private.

Anyway, you get the point.

Now jump to the Skukuza Safari lodge. The same construction employment benefits apply in the short term. However, this is paid for by the taxpayers/SANParks tourists after already questionable procurement policies. No bond is taken out, and in fact cash payment to the tune of half a billion up front, interest free, is a godsend to the tenderpreneurs. No security or insurance is required, and power and water, A LOT, is for free during the construction process, no extra municipal income or jobs on that front over the year. Machines and labourers stay in Kruger accommodation/lots, or labourers come in on a daily basis. Building insurance is covered under existing Kruger policies.

Builders use free sand and thatch grass from Kruger itself too, no extra employment or contribution to local business and bulk transport companies in that regard. (But this may well be budgeted for in the initial tenders regardless).

Diesel for equipment is readily available very near the site, even if purchased at public rates it uses the existing delivery trucking infrastructure of Kruger with not much extra travel/expenses at all in bulk-provision terms. In fact Kruger actually scores big-time with increased volume of in-house fuel supply contract.

Permanent workers are housed for free after completion of the project, squeezed into the staff village. Remember, this is still an SP venture and has not been privatised yet. No new construction needed in that respect.

The lodge uses existing SP game drive vehicles, or existing private OSV companies, who easily fill up their existing schedules at increased revenue with existing regulations/fees/contracts already sorted, and are largely on-site. No new vehicles or guides need to be employed. No new jobs or increased revenue in private terms.

Maintenance to infrastructure is the permanent problem of SANParks, not the owner, should it be privatised. This deprives local businesses of regular income. Large maintenance will be outsourced via tender, or to existing maintenance appointees, probably at an inflated price. Either way, tax money is wasted and small maintenance jobs do not go to the communities.

All of the above, private vs SP amounts to many millions of rands, initially and annually. It is not small change!

Anyway. Worst case scenario...Skuks hotel is a white elephant, which it will be. SANParks have done their deals, and too bad so sad. It mostly accommodates government indabas anyway, with dignitaries using the airport, conference centre and hotel with taxpayers' money, so no real profit regarding the fiscus. It is not really a loss.

More worst case scenario, Maphuza Lodge is put out of business by the unfair advantage regarding all of the above, leading to 50 permanent job losses, a sequestration of the business, end of local supply-chain benefits, eventual pillaging of the security-less property etc. It has happened before.