New plan to turn around struggling municipal market
● Agricultural Produce Agents Council to be called in after no luck in attracting private operator
Hit with persistent crime and losing millions of rand, the Nelson Mandela Bay municipality is looking to rescind a 2017 council decision to seek a private operator for the Markman-based fresh produce market and instead rope in the Agricultural Produce Agents Council.
The recommendation was adopted at an economic development, tourism and agriculture committee meeting yesterday.
It was revealed during the meeting that a tender for a private operator had gone out five times in seven years with noone successful with their bids.
During this time, the market had deteriorated to such an extent that it became uninsurable.
At least 15 cases are being investigated by police related to crimes at the market, according to a report debated at the meeting.
Three years ago, armed robbers made off with more than R300,000.
The committee adopted a turnaround strategy for the facility last year which saw an improvement in revenue, operations and conditions.
However, economic development, tourism and agriculture acting executive director Mpho Pebhane said without the council decision being rescinded, no further capital injection could be made.
“When we go to budget and treasury with cost estimates for work that needs to be done, it is always argued that capital spending cannot be injected into something on the verge of going to the private sector,” Pebhane said.
“For years, we have been given the same operational budget to maintain what is now in place.”
As part of a turnaround strategy that was steered by urban agriculture deputy director Passmore Dongi, the department has engaged with the Agricultural Produce Agents Council which is now overseeing the conduct of agents operating at the market.
The APAC regulates the occupations of fresh produce, export and livestock agents, according to the Agricultural Produce Agents Act.
DA councillor Renaldo Gouws said since the private sector showed reluctance to assume operations, it was futile to uphold the resolution.
ANC councillor Sicelo Mvele said immediate intervention was needed from the department to address rampant theft and encroachment of hawkers around the market.
“People are setting up stalls around the market to undercut prices, which is wrong.”
The committee recommended that the council rescind the outsourcing of the market and sign a memorandum of understanding with the APAC.
The report, written by Pebhane, outlined the deteriorating conditions at the market since 2019, highlighting issues such as inadequate security, neglect of maintenance, and that it was uninsurable.
In a 2019 insurance assessment, several issues were identified at the facility:
● Fire and electrical challenges were prevalent;
● There was a high risk of electrical hazards;
● The absence of an automatic fire sprinkler system in the cold room;
● Fire equipment inadequately maintained;
● Poor housekeeping practices observed;
● Unsafe storage of pallets increased the risk of fire;
● The refrigeration plan did not conform to norms and standards; and
● Electrical reticulation was subpar, failing to meet the requirements for an electrical certificate of compliance.
The market has experienced break-ins, theft and armed robberies, with copper pipes, computers, geysers and vegetables stolen.
“The fresh produce market now relies on 20 security personnel who work four shifts,” Pebhane said in the report.
“However, the number of criminal incidents is shocking despite the presence of security personnel.
“All these incidents have happened in the presence of municipal security personnel who were helpless.”
The report also highlights that since the resolution, the facility has not received adequate maintenance.
“The facilities [including the Kariega facility] are not insured due to lack of compliance.”
An internal audit found:
● Daily computerised cashier balance spreadsheets not completed;
● Cashiers’ shortage reports are not factual;
● Cashiers’ shortages are not reported;
● No reconciliation of daily income to bank statements;
● Supervisors acting as a cashier.
In the financial years between 2018/2019 and 2021/2022, the market has been operating at a loss.
In 2018/2019, it generated an income of R19.5m from a R30m budget.
In the 2019/2020 financial year, it generated nearly a million rand less than anticipated, yielding R18.7m from a budget of R32.3m.
In 2020/2021, it generated R18.9m from a budget of R32.6m.
However, in 2021/2022, there was a significant drop in revenue, with only R17.9m generated, despite the budget increasing by over R5m to R37.9m.
According to Pebhane, since the adoption of the turnaround plan, market revenue increased by R2m between July and February 2024 compared with the same period last year.
He said the 2017 resolution had contributed to the shortage of staff, with only 22 of the 35 positions filled.
“Since it was staffed years ago, many people have left and we cannot fill those positions.”
Retired workers have been replaced by Expanded Public Works Programme workers.
He said as part of the turnaround plan, smallholder farmers, backed by the metro, would now have the opportunity to sell their produce at the market.
“The dilemma of bringing in the private sector closes opportunities for informal traders and people in crop production, with about 500 in the city,” he said.
‘The number of criminal incidents is shocking despite the presence of security personnel. All these incidents have happened in the presence of municipal security personnel’