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Wednesday Jun 04, 2014

Pivotal KZN land deal bombs

KwaZulu-Natal's R10 billion Blythedale Coastal Resort has finally bombed, costing taxpayers another R332 million to cancel a deal that was meant to be a 'model example' of land reform in South Africa.

The silver lining, however, is that creditors and investors owed about R400m by the company - which was put into business rescue in October - will get their money back.

But organised agriculture say the move has shaken investor confidence in the agriculture sector and highlighted the failure of land reform policies, which has seen billions wasted on failed projects.

The demise of the Blythedale deal was made final yesterday, when Land Claims Court acting Judge AJ Sardiwalla signed a settlement agreement in which the Minister of Rural Development and Land Reform, Gugile Nkwinti, agreed to pay the R332m to Blythedale's business rescue administrator, Ken Stewart, by June 14.

In the settlement hammered out by lawyers over the last two months, Mark Taylor, the major shareholder in the company, agreed to make up the debt shortfall to ensure everyone was repaid.

The 3 000 land claimants, under the Zwelabantu Dube Community Property Association, get back the land title and full development rights without encumbrances.

Nkwinti agreed to the settlement after siding with the community, who wanted out of the deal, and said in court papers that his officials had acted 'unlawfully' in 2009 when they had settled the R600m land claim and allowed the community to sign a shareholding deal with Blythedale.

However, his spokesman, Mthobeli Mxotshwa, said none of the high-ranking officials concerned, including former minister of agriculture Lulu Xingwana, would be held accountable.

'While their conduct could have fallen short of providing restitution to the community, their conduct was not criminal. Neither did it cause any damage to the department or the community.'

He said the R332m would be paid out of this year's land restitution budget and that the land, which is under sugar cane, would be comanaged by the department and the community.

Schoolteacher and spokesman for the clan, Musa Dube, told The Mercury that 'a number of new investors' were approaching the community to get involved in a new development on the site. 'So, we are going to take our time and appoint a committee. The community now owns the Blythedale Coastal Resort Company... No decisions have been made,' he said.

Yesterday, Taylor said his development company, eLan, was the first in line to develop the land again and that once he had met with the community the first houses 'could be up by the end of the year'.

Agri SA's legal advisor Annelize Crosby and the chief executive for KZN's agriculture union, Sandy la Marque, have called for an investigation by Scopa and the auditor-general into the affair, saying it was 'very worrying if the (land claim) commission has to go to court to have its own agreements rescinded'.

The Mercury


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