For the cruise operators at Durban’s Wilson’s Wharf, the winter season — marked by the annual sardine run and the long mid-year school break — is usually a lucrative time of year and the second busiest after the year-end holidays.
But the move back to level 2 of the Covid-19 lockdown, and spiralling rental debts generated during
levels five and four last year, mean that operators are going into the season with a sense of dread, rather than relief.
Huge losses caused by the lockdown — some estimate their 2020 revenue at only 60% of 2019’s — mean that the majority of the tenants at Wilson’s Wharf, owned and operated by the Ithala Development Finance Corporation, are battling to stay afloat.
Several have been threatened with eviction by the state-owned entity over their arrears — to which compound interest has been applied since March 2020— while others have not had their leases renewed and are now operating on a month-to-month basis.
Isle of Capri owner Bennie Janse van Rensburg said this week that he was “very worried” about the effect of the move to level two on their ability to cover operating expenses and make payment on arrears.
“We are already getting calls from people to find out if we are still operating because they think level two means we are closed. This is definitely going to have an impact on us,” he said.
“This is normally our second busiest time of the year, with a lot of foreign tourists. This year again we will have to depend on whichever locals we get.”
Janse van Rensburg and his wife Amanda run a 10-seater whale watching boat; two 10-seater harbour craft and a 47-seater party boat from the wharf, which also houses several restaurants and a 20-stall flea market.
They and their 14 staff members survived five months of no business, unlike the majority of the stalls — three clothing designers closed down along with the Zack’s restaurant and the Catalina Theatre.
The Janse van Rensburgs and the rest of the tenants have struggled to get out from under the five months of rental arrears they accrued during the hard lockdown.
“We are in limbo,” said Janse van Rensburg. “They sent us one email saying we can pay it back over six months, at one and a half times the monthly rental. Since then, all we have got is invoices, with bigger and bigger late payment charges every month.”
He said they had asked Ithala to consolidate the debt in the form of a business loan, with fixed repayments, but had received no response.
The Isle of Capri’s three-year lease had not been renewed, creating further uncertainty for the couple and their employees.
“We are hanging by a thread. We have had a 40% loss of income, but we are still expected to pay 100% rent,” he said.
“I know that many people have lost everything and that we are lucky, but every night we go to bed not knowing if we are going to be evicted the next morning.”
“Do we ever really get a good night’s sleep? No, not really.”
Ahmed Mia, owner of Pescador Cruises, said that while he had tried to adapt and continue doing business, the drop-off in tourism meant the situation was “tough”.
“Things are not as they were before. The boating industry has taken a heavy knock. Every time we start to get things going, we are moved back again and business takes another hit,” he said.
Mia, who has several leases with Ithala, said they were “paying what we can” while trying to come to an agreement with the corporation over the arrears.
“Prior to the lockdown, we were up to date with everything. The arrears we have accrued are as a result of not being able to do business during the hard lockdown,” he said.
Ithala issued letters of demand to Pescador last month.
“We have made an offer to settle by paying operational costs for the five months we weren’t working. It’s not like we don’t want to pay anything. They haven’t got back to us, but let’s see,” Mia said.
Ithala spokesperson Sithandiwe Dimba said Ithala, like a number of state-owned entities, had launched a series of stakeholder discussions in the province last week to “discuss ways of achieving results that will turn around the impact of Covid-19”.
The programme had started in northern KwaZulu-Natal and would be rolled out until next March.
Dimba said Ithala had offered tenants rental discounts and deferment last June in a direct response to their loss of income during the hard lockdown.
“What we did was to send a letter of demand as is required of an institution such as ours. As a responsible and accountable entity, Ithala nevertheless had to put conditionality to the relief,” she said.
Tenants had been asked to show the financial losses caused by the first nine months of lockdown and provide Ithala with a recovery plan as to how these would be recovered. Clients would be granted written rental relief, excluding electricity and other services, once this was done.
Dimba said leases remained valid for another six months and would be renewed once tenants met the requirements for this, which included a good payment history.