Tourism body in fund­ing cri­sis

● Staff told to stay home as of­fices close

Weekend Post (South Africa) - - News - Shaun Gill­ham gill­[email protected]­soblack­star.co.za

A fund­ing cri­sis has left Nel­son Man­dela Bay Tourism at a cross­roads over its fu­ture after mu­nic­i­pal fund­ing dried up five months ago due to a le­gal over­sight.

While it is likely the or­gan­i­sa­tion will be thrown a life­line, the mu­nic­i­pal­ity has made it clear it has no fi­nan­cial obli­ga­tion to float the tourism body go­ing for­ward.

Due to its cash flow predica­ment, ef­fec­tive from Mon­day all staff have been in­structed to stay at home, with just two mem­bers re­main­ing to man op­er­a­tions.

Com­ing shortly be­fore the start of the re­gion’s sum­mer sea­son, some of the body’s pub­lic tourism of­fices will also close, with only the Port El­iz­a­beth air­port and Board­walk cen­tres re­main­ing open.

This was an­nounced at NMBT’s AGM on Fri­day, where board chair Buli G Ngo­mane said if it were not for ini­tia­tives the or­gan­i­sa­tion is un­der­tak­ing, she would have had to ex­er­cise her fidu­ciary du­ties and dis­solve it.

It em­ploys 28 peo­ple, in­clud­ing brand am­bas­sadors, and sup­ports a mem­ber­ship of around 260 pri­vate tourism prod­ucts and site op­er­a­tors. Along with its head of­fice, it op­er­ates cen­tres at the Donkin Re­serve and in Uiten­hage.

Prior to the AGM, Ngo­mane re­vealed that the tourism body had been sur­viv­ing on re­serve funds and monies earned from projects un­der­taken by the or­gan­i­sa­tion ever since mu­nic­i­pal fund­ing ceased in July.

The new de­vel­op­ment comes de­spite a 10-year re­la­tion­ship be­tween the mu­nic­i­pal­ity and NMBT.

But the metro has now taken the po­si­tion that NMBT is an in­dus­try as­so­ci­a­tion which is mem­ber­ship-based and should not solely de­pend on the mu­nic­i­pal­ity for fund­ing.

The ad­min­is­tra­tion con­firmed to Week­end Post it had not given any funds to the or­gan­i­sa­tion in July, at which time NMBT had been ex­pect­ing fund­ing for its 2018-2019 year.

Mu­nic­i­pal ex­ec­u­tive di­rec­tor of eco­nomic de­vel­op­ment, tourism & agri­cul­ture Anele Qaba said fund­ing had not been trans­ferred due to le­gal pro­cesses.

This was con­firmed at the AGM, where Ngo­mane said the mu­nic­i­pal­ity and the tourism body had not ex­am­ined the le­gal sta­tus of the par­ties’ agree­ment over the past decade.

“Pre­vi­ously . . . after the bud­get had been ap­proved by coun­cil, its trans­fer to NMBT was sub­ject to a ser­vice-level agree­ment,” Qaba said.

“How­ever, when we fol­lowed the sim­i­lar pro­cesses this fi­nan­cial year the le­gal ad­viser raised con­cerns [over] the way the [mu­nic­i­pal­ity] had been fund­ing NMBT and raised the fol­low­ing is­sues: NMBT is not an en­tity of the mu­nic­i­pal­ity and its process of fund­ing should be sub­jected to the pro­cesses as sub­scribed in the Mu­nic­i­pal Sys­tems Act, fail­ing which a Sec­tion 67 process needed to be fol­lowed.”

The Sec­tion 67 process es­sen­tially means or­gan­i­sa­tions that meet cer­tain re­quire­ments can ap­ply for a grant or a grantin-aid from a mu­nic­i­pal­ity.

To com­ply with the Mu­nic­i­pal Fi­nance Man­age­ment Act, the ad­min­is­tra­tion can­not sim­ply ap­point NMBT to ren­der ser­vices to it, if it had not gone through a ten­der process.

“Based on this le­gal ad­vice an item fol­low­ing Sec­tion 67 process was tabled at the may- oral com­mit­tee of No­vem­ber 8 for ap­proval. The item will now have to be tabled for fi­nal en­dorse­ment by coun­cil.”

Qaba said once the item has been ap­proved by coun­cil on De­cem­ber 4, a fund­ing agree­ment will have to be signed be­tween the two par­ties.

How­ever, he said the mu­nic­i­pal­ity had no obli­ga­tions to­wards the tourism en­tity.

Among the reme­dies Ngo­mane listed at the AGM was chang­ing the body’s con­sti­tu­tion, which would al­low it to re­struc­ture it­self to be in a po­si­tion to earn rev­enue.

Ngo­mane said the mu­nic­i­pal­ity cur­rently “owed NMBT”.

“We have con­tin­ued to serve [it] in our ca­pac­ity as a des­ti­na­tion mar­keter since July.”

Ngo­mane said NMBT was seek­ing to con­tinue a part­ner­ship with the metro in the best in­ter­ests of grow­ing the Bay tourism in­dus­try, its stake­hold­ers and the econ­omy.

Nel­son Man­dela Bay Busi­ness Cham­ber chief ex­ec­u­tive Nomkhita Mona said on Fri­day: “If in­deed the mu­nic­i­pal­ity has made it clear they have no obli­ga­tion to sup­port NMBT, that would be a state­ment both shock­ing and­my­opic . . . The mu­nic­i­pal­ity has an obli­ga­tion to all cit­i­zens of the city to pro­mote and mar­ket [it] as a tourism des­ti­na­tion.”

The new de­vel­op­ment comes de­spite a 10-year re­la­tion­ship be­tween it and the mu­nic­i­pal­ity

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