Floods wash away top business

2008-06-27 00:00

An Amanzimtoti family risk losing everything after their insurance company pulled the plug on its policy within a week of devastating flash floods.

The Ocean Hideaway Guesthouse in Ipahla Drive is considered too high-risk due to alleged poor storm water drainage and run-off from a nearby construction site and has little chance of securing coverage elsewhere.

Michelle King-Page, spokeswoman for Ocean Hideaway, said yesterday that they were told on Thursday afternoon that the policy would be terminated within 30 days. The family have not only found themselves homeless, but had to cancel bookings and retrench four employees.

Although a clean-up is under way, the main house has been condemned and is propped up on scaffolding. It hangs over a massive gorge that was washed between it and neighbours by floodwater making its way to the sea. The business’s entertainment lapa, with expensive equipment, refrigerators and furniture, collapsed into the gorge.

King-Page said massive amounts of water and sludge from a nearby development along the N2 rushed towards the neighbourhood after municipal stormwater drains failed, sweeping through the nearby Poinsettia Park old age home before washing a donga between it and a neighbouring property. That property has also been condemned and its owners have left.

The good news is that the actual structural damage to the property is covered by another insurance company and steps have already been taken to stabilise the structure. The bad news is that without cover for loss of business, it is unlikely the operation will survive long enough to operate from the repaired property. Even if it does, it is unlikely that they will be able to re-open before January next year, she said.

This is not the first time the property has been extensively damaged. Washaways along the Toti beachfront in March eroded the foundations of some of the accommodation units and damaged the deck and swimming pool. The units were repaired, but reconstruction to the edge of the property was halted until the municipality had fulfilled its obligation to repair the bank leading to the boundary of the property. This has not been done.

King-Page said they contacted the developers of the Arbour Town shopping centre next to the N2 following the initial damage and the latest damage to their property, but the developers had distanced themselves from the issue.

Attempts by Weekend Witness to contact the developers yesterday failed.

A letter voicing concerns about the ability of municipal storm water drains to handle the run-off from the new development was hand-delivered to and signed for by eThekwini municipal manager Dr Michael Sutcliffe’s office in March. Nothing was done. Sutcliffe could not be reached for comment yesterday.

King-Page said they were informed in March that the business was under-insured and were forced to settle for partial repayment of their claim for business interruptions and consequential loss until the end of August. This did not even cover the bond repayment, let alone the cost of municipal services and wages.

Until now, the guesthouse and its neighbours have been regarded as prime properties.

Patrick Harris, KwaZulu-Natal spokesman for Renasa Insurance, confirmed that notice was given on the policy due to high external risk factors. Broker Ingo Grundman and Monitor Administrators declined to comment.

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