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05 September 2017

Fate of yacht club in balance

Posted in Industry news

Popular Bay attraction’s row with Transnet over rental now referred to Ports Regulator

A three-year wrangle over rental for the Algoa Bay Yacht Club has been referred to the Ports Regulator after a draft settlement order was granted by the Port Elizabeth High Court yesterday – effectively giving the club six months to vacate.

The club and the Transnet National Ports Authority are at loggerheads over a fair price, the club saying it should be subsidised or discounted.

Transnet wants a market-related rental of more than R49 000 a month.

Court papers reveal that Transnet issued a summons to the yacht club in 2014 claiming the almost 60-year-old Port Elizabeth harbour feature owed about R1.9-million in overdue rental.

Transnet claimed the club was not paying a market-related rental as determined by it.

The matter was taken to court and the parties decided on a draft settlement agreement which effectively cancelled all rental agreements.

The draft order, agreed upon by both parties out of court, effectively allows the club to continue operating until February 28.

After this, it will be allowed to continue operations on a month-tomonth basis should Transnet fail to secure a replacement tenant.

The document also said that should the club fail to pay its monthly rental, Transnet had the right to issue a warrant of eviction, which could see the club closed down indefinitely.

Originally built on vacant land by members of the public, the club has been used for recreational purposes and, according to club chairman, commodore and longstanding member Alan Straton, it was intended to foster a love of sailing in the Bay.

“In 2006, the club suffered a devastating fire and almost burnt to the ground,” he said.

“It had to be rebuilt and this affected members. We decided to open a restaurant and open the club to the public to assist in covering costs.”

The first lease agreement dated 2006 gave the club an option to renew after three years.

Then, in 2009, Transnet issued the club with a notice of a breach of lease agreement for overdue rental and it was claimed that the club should pay R37 000 a month.

An appeal was lodged with the Ports Authority, while the club paid R6 000 in rental and R4 000 in arrears, totalling R10 000 a month.

The club is paying R15 800 a month including interest.

According to Straton, it was agreed that an external valuator would be assigned to value the property to determine a fair rental amount.

But he said this had not happened and instead an internal valuator from Transnet had been appointed.

The club then took the matter to the Ports Regulator to mitigate.

Straton said Transnet’s reluctance to negotiate or discuss further agreements was leading to a situation which would be difficult to defuse.

“This process needs to be managed in a way that we can talk to each other. We need to find a solution that is good for everyone,” Straton said.

The matter is now to be heard by the Ports Regulator on Tuesday.

Nash Vandayar, who is part of Transnet’s legal team, confirmed the contents and acceptance of the draft order, but did not comment further.


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