Community fumes over deal to give away its land for 10% share in tourism venture

Members of a community on the Numbi Gate border of the Kruger National Park protest against losing the rights to their land for a nominal fee
Members of a community on the Numbi Gate border of the Kruger National Park protest against losing the rights to their land for a nominal fee

An angry community turns on a plan to give away its land – worth tens of millions of rands – for a 10% share in a tourism venture outside Kruger Park

A rural community in Mpumalanga is fighting to stop an allegedly “dodgy” deal that may see it giving away its land worth R70 million for a mere 10% shareholding in a tourism venture.

The Mdluli community owns a pristine piece of land on the boundary of the Kruger National Park’s Numbi Gate.

Part of the community has been protesting after realising that they only had a 10% stake in the Mdluli Lodge Investment, which has a 99-year lease to build and operate a 200-bed lodge on about 1 000 hectares of the community’s land.

The lease is a nominal R100 a year.

The community blockaded the road from Hazyview to Numbi Gate this week as they protested against what they say is an unfair deal.

The Mdluli Trust, the entity that owns the land on behalf of the community, entered into a contract with the Mdluli Lodge Investment, in which Sasfin-MDM Private Equity Fund 1 has a 60% stake, First Ready Development 25 has 30% and Mdluli Trust has 10%.

If the deal goes ahead, according to protest leaders, the community stands to gain virtually nothing, while only a few individuals who are part of the Mdluli Trust will benefit.

Community leader Amos Mdluli said: “These companies did not bring anything to the table. They used tricks, but now we’re determined to challenge this exploitation, even though they have threatened to sue those at the forefront of the protests in their personal capacity.

“No consultation was done with the whole community about the 99-year lease of its land,” he added.

The Mdluli Lodge Investment wanted to enter into a deal with the Kruger National Park for the property to be fenced into the park, but a review of the deal that SANParks conducted in 2013 showed that the community was not going to benefit.

If fenced into the park, the commercial value of the community’s land would significantly increase.

The review appears to have got the community hot under the collar.

City Press has seen the SANParks review, conducted by Mark Heunis on July 23.

Heunis advised SANParks against entering into any agreement with the Mdluli Lodge Investment because:

. Sasfin-MDM owned its 60% because of an R18 million loan that would be paid back and, once that was done, the company would have earned shareholding without any capital contribution;

First Ready Development 25 did not contribute anything for its 30% shareholding;

The Mdluli Trust, which contributed land valued at R57 million at the time, owned just 10%.

Heunis found that the allocation of shares in the Mdluli Lodge Investment were “inequitable”.

“The Mdluli community will not derive financial and other benefits proportionate to their capital contribution [in the form of land] in the Mdluli Lodge Investment,” Heunis said.

“It is respectfully submitted that the only party who will significantly benefit from the commercial arrangements and current envisaged incorporation [into the Kruger National Park] proposal will be Sasfin-MDM Private Equity Fund 1 and not the beneficiary community. The benefit of jobs is negligible, taking the Mdluli Trust’s capital contribution [in the form of land] into consideration,” he said.

Heunis said that SANParks could not enter into a contractual park agreement with the Mdluli Lodge Investment until the shareholding was revised, and the R100 lease was revised and increased.

The Mdluli Trust, the traditional council, Sasfin-MDM Private Equity Fund 1 and the Mdluli Lodge Investment have, through deal facilitator Chris Schalkwyk, said that the SANParks executive was comfortable with the way their and the community’s concerns had been raised.

Schalkwyk said that issues raised in Heunis’ report had since been addressed.

He said the community now owned 50% of the Mdluli Lodge Investment and the lease had been reduced to 45 years.

“The leaders of the small group of protesters are deliberately and wilfully spreading false and malicious information. The issues raised in the report have been addressed as reported to SANParks,” he said.

When SANParks spokesperson Isaac Phaahla was asked through written questions if they supported the project now, his answer was an emphatic no.

“The land dispute is between the two Mdluli traditional authority factions and they should be able to shed light on the matter. SANParks is not party to any of their dealings with investors,” Phaahla said.

The protesting community members appear not to have seen the new deal Schalkwyk is talking about, because they are still referring to Heunis’ findings.


What measures should be put in place to ensure communities benefit from these kinds of deals?

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