Africa

AMABHUNGANE: R4.8bn for a prestige eSwatini project — for a summit unlikely to happen

An extravagant prestige project allegedly commissioned by eSwatini’s absolute monarch Mswati III for the hosting of 2020’s African Union summit has more than quadrupled in price to R4.8-billion, amaBhungane has been told.

It has also been learnt that eSwatini (formerly Swaziland) has not formally applied to stage the summit and is considered unlikely to host the event.

The project in question is the International Convention Centre (ICC) and Five-Star Hotel currently under construction in the hotels hub of the Ezulwini Valley, between Mbabane and Manzini.

Given the depressed state of eSwatini’s hospitality industry, it is widely seen as a potential white elephant.

A senior source in eSwatini’s ministry of finance told amaBhungane that the cost of constructing the two structures was now set at R4.8-billion — a massive escalation from the R1-billion reported in the media in 2013, when the project was first unveiled.

Bertram Stewart, principal secretary in the ministry of economic planning and development, which is overseeing the project, would neither confirm nor deny the new cost projection.

We are not going to entertain figures from ghosts who cannot be named. Kindly attribute your figures to your sources,” he said in an emailed response.

When the project is finished and the AU hosting deal is completed there shall be a statement for local and international consumption, as we did when the project started.”

Stewart did not answer other questions about the ICC, saying he had provided the requested information when the project was first announced and would not be party to reporting “stale” news.

In 2013 the Swazi Observer reported that the facility will be to international standards with a Swazi theme, able to handle up to 4,500 delegates and will include a trade centre for “high-value exhibitions”.

The Observer said that it will also feature a secure chamber room to take 53 heads of state, a 3,500-seat banqueting hall, restaurants, a 1,500-seat theatre, and special holding rooms for VVIPs.

The 500-room hotel will be linked to the convention centre.

The World Bank ranks eSwatini among the world’s five poorest countries. The country is also considered the world’s most unequal.

The ministry of economic planning awarded the contract for the ICC to a joint venture involving Stefanutti Stocks eSwatini (50%), Inyatsi Construction (30%) and Kukhanya Civil Engineering Contractors (20%).

Construction had a start date of 15 October 2015 and the complex was due for completion on October 15 2018, well before the 2020 AU summit in 2020.

It is understood that the ICC is now slated for completion in May 2019 and the hotel in October — a year behind the original schedule.

Stewart did not answer a question about the cause of the delay.

A sizeable number of workers were retrenched at the end of 2018. A source said that when construction resumed after the Christmas closure, those still on site were urged to work with utmost dedication and commit to overtime to ensure an October handover.

The signs are that, as with the recently constructed King Mswati III Airport, the ICC complex will turn out to be a facility eSwatini neither needs nor can afford.

Mswati has a taste for expensive vanity projects which his perennially cash-strapped government is expected to fund.

He has announced that he wants eSwatini to become a first-world country by 2022.

The airport cost R2.5-billion to construct with a further outlay of R200-million in 2018 for a VVIP hangar for the exclusive use of Mswati and other heads of state.

It is used by one airline, SA Airlink, and Mswati’s two personal jets.

Coupled with this is a R875-million highway that is designed to link the airport, in remote Sikhuphe, to Manzini.

The highway project was also awarded to Inyatsi Construction. There are rumours of a close relationship between Inyatsi and the Mswati’s investment trust, Tibiyo TakaNgwane. (See sidebar.)

Mswati is reliably understood to have ordered the government to implement the ICC project for the 2020 AU summit. Asked whether this was true, Stewart did not respond.

However, a senior government source told amaBhungane that the Swazi government had since accepted that the country is unlikely host the event, especially after the AU resolved that from 2019 the gathering of heads of state will take place once, rather than twice annually.

Instead of a mid-year summit, there will now be a mid-year co-ordination session with regional economic communities, with the first being held in Niamey, Niger, at the end of June.

Before 2019, the first summit was generally held in February at the AU headquarters in Ethiopia. The mid-year summit was then rotated among member states, increasing each country’s chance of hosting it.

The senior government official said that the ministry of finance was informed in a closed meeting almost two years ago that the country had dropped plans to host the event.

The official also disclosed that the officials were told not to breathe a word about this, as some Swazis might then advocate against the continued implementation of the project.

However, the principal secretary in the ministry of foreign affairs and international co-operation, Joel Nhleko, insisted in an interview that plans for eSwatini to host the 2020 event were still on the cards, and that the issue would be discussed at the March 2019 summit in Addis Ababa.

Half-way through a further question about the government’s attitude to hosting the summit, Nhleko rang off.

Ebba Kalondo, the spokesperson for AU commission chairperson Moussa Faki Mahamat, said the issue had been raised at a meeting between Mahamat and Mswati in eSwatini in 2018, where the king had said he wished his country to play host.

But Kalondo hinted that eSwatini is a long shot as a venue. He said that it has not made a formal approach to the AU and that the hosting of the event is still open to all member states.

Even if the ICC is used for the AU summit, major questions remain about its longer-term purpose and viability and who will pick up the tab for maintaining it.

In September 2017 it was reported that Mswati visited Las Vegas in the United States to persuade Caesars Palace — famous for its hotel and casino — to manage the ICC complex.

Writing in the Swazi Observer, “The King’s Office Correspondent” reported that Caesars Palace management promised to submit a proposal on what it would cost to manage the convention centre and hotel.

There has been no follow-up announcement, strongly suggesting that no operator has been found.

The likely upshot is that government will be forced to run the two structures, as it it is doing with the Pigg’s Peak Hotel and the Royal Villas Hotel in the Ezulwini Valley. The latter development was also allegedly ordered by Mswati to house heads of state during the 2010 Common Market for Eastern and Southern Africa (Comesa) summit. The cost of this has not been revealed.

The villas boast a total of 56 rooms, with each comprising a “king suite”, “queen suite”, “standard queen room” and “twin room”. The summit itself took place at the Lozitha Royal Palace.

When government efforts to find an operator for the villas failed, investment trust Tibiyo TakaNgwane took over the facility with the aim of running it as a hotel.

It is not known whether the venture is profitable. Three attempts to contact Tibiyo spokesperson Sibongiseni Mamba on the phone were unsuccessful. AmaBhungane could find no evidence that the fund publishes its annual results.

The ICC is a five-minute drive from the Royal Villas and two other hotels, one of which, the Royal Swazi Spa, already has a convention centre.

According to the Royal Swazi Spa’s 2016 annual report, the hotel splashed out R5-million on refurbishing its centre in 2015.

The Happy Valley Hotel, less than 5km away, has recently been extensively remodelled with a casino and conference hall.

About 3km west of the new development stands another hotel, the Sibane.

Asked about the viability of the ICC, a hotelier in the Ezulwini Valley pointed out that the Royal Swazi Spa’s 500-seat auditorium frequently stands empty.

The hotelier also expressed concern that the ICC complex would put existing hotels under further pressure as government business was likely to be shifted to the new facility.

Most of the conference business comes from the government, NGOs and private companies.

An Mbabane-based investment adviser, Milton Fakudze, told South Africa’s Independent Online in June 2014 that tourist numbers were declining in eSwatini and that “the new government hotel will negatively impact existing hotel business and may force some hotel closures”.

One of Ezulwini’s prominent hotels, the Ezulwini Sun, closed in June 2012 pending a resurgence in the tourism business. It has not reopened.

The Swazi government has suffered from persistent budget shortfalls. In 2018 former finance minister Martin Dlamini lamented the fact that the country was running a R4.5-billion deficit.

Towards the end of 2018 the Swazi Observer revealed that government is to cut spending by R560-million. The cuts included R49-million earmarked for the upgrading of schools and colleges and R50-million intended for health facilities. DM

SIDEBAR: Does King Mswati have a conflict of interests over the International Convention Centre (ICC) and Five Star Hotel in eSwatini’s Ezulwini Valley?

The monarch is reliably understood to have commissioned the project. There is persistent speculation that he has a connection with one of the contractors involved in building it, Inyatsi Construction.

Inyatsi has 30% of the joint venture that won the multibillion-rand ICC tender. Last week the company dismissed speculation that its shareholders include the investment trust that Mswati controls, Tibiyo TakaNgwane.

Inyatsi spokesperson Gugulethu Bennet, said:

Tibiyo has never been a shareholder in the group. The shareholders are well documented in the registrar of companies in eSwatini (Swaziland).”

The registrar, Msebe Malinga, was not in his office when amaBhungane paid a visit last week. He also did not respond to a WhatsApp question about Inyatsi’s shareholders.

However, a letter to the Times of Swaziland in November 2010 quoted the 2009 Swaziland Business Year Book as saying:

Inyatsi Construction was foreign-owned until 2004, when local shareholders Tibiyo TakaNgwane and Evukuzenzele Supermarkets acquired the company.”

Bennett did not directly respond to this statement.

The Mail & Guardian reported in 2012 that differing accounts of share transactions involving the company had deepened suspicion of a royal connection.

Until October 2010, Tibiyo’s former chief executive, Ndumiso Mamba, was Inyatsi’s chairperson, with a shareholding of 23.8% in the company.

Mamba unexpectedly gave up his holding after he was caught hiding under the bed of one of Mswati’s wives in July 2011.

King Mswati subsequently removed Mamba as justice minister. The latter then made his first public appearance two months after the scandal broke to announce he had sold his Inyatsi shares.

He did not explain why he had done so in a year in which the company nearly doubled its turnover, mainly due to government contracts. It also remained unclear how and when he had acquired his stake.

Swazi businessman Moses Mota told the Swazi media he had bought Mamba’s shares, taking his own holdings to 56%, with 15% being in the hands of management and the remainder owned by a Brian Persson.

However, the Inyatsi website listed only two shareholders, Persson and Mota, each with 50%.

Asked about the Mamba episode, Inyatsi’s Bennett said the company could not comment as it was “long before our time… We would suggest you contact Mr Mamba directly to ask him this question”.

Mamba could not be contacted.

Had he been a proxy for other interests? Asked whether Tibiyo, King Mswati or another royal family member held shares, either directly or through a nominee, Bennett merely said “none of the above entities” were shareholders. DM

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