• September 20th, 2018
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Show Society in Cash Pinch

By Staff Reporter WINDHOEK The Windhoek Show Society (WSS) faces such financial problems that it needs urgent solutions to safeguard the existence of the country's most important national event. Part of the financial problems, it is understood, have arisen because of the absence of a partnership between the City of Windhoek and the society through reduced rates and taxes. New Era is reliably informed however that the two are in negotiations to have the city as a partner in the activity, which has been in existence for many years. All funds that are generated, estimated to be more than tens of millions of dollars are ploughed back into the infrastructure through maintenance and rehabilitation. Although the WSS obtained the grounds from the council at reasonable rates, some 50 years ago, last year the rates and taxes went up to the extent that the monthly and cumulative expenses payable to the council surpassed reasonable levels. Consequently, the city demanded full settlement of N$1.2 million, which the society owed for water, rates and taxes. Due to the increase in rates and taxes, the WSS is now having to pay in excess of N$1 million compared to N$237 904 and N$531 530 that it paid as cumulative annual payments to the City Council in 2000 and 2003 respectively. It is estimated that the WSS will this year pay N$1.5 million. Monthly payments in rates and taxes have jumped from N$24 000 to N$150 000, according to a source. The WSS is indebted to the tune of N$4.4 million, for a mortgage loan and an overdraft facility. This, says the society in an application for medium term financing, has left it in a situation that may jeopardize some of its deals because the bank that financed them refused to go beyond the N$4 million limit. Approached for comment yesterday, the President of the WSS, Theo Schoeman and one of the directors of the society, Harald Schmidt declined to comment. New Era has learnt that the crisis is a short term one. In the document, the WSS says, "Whilst the Society is presently in a serious cash flow crunch, options for solutions exist that will safeguard the continued existence of the Show Society and thus its invaluable contribution to the local and national economy." However, it notes that the society will not be able to achieve the solution on its own and requires the intervention of a financial stakeholder who will be prepared to provide bridging finance until the negotiations evolving around erf 6572 have reached a contractually binding agreement to benefit all concerned. The WSS says that if it is assured of a further increase in borrowings, it will be able to complete a number of projects, which include an application to the city of Windhoek for a sub division for the sale of the Putt Putt erf, which has been consolidated to the show grounds erf number 5979 after it was acquired from the Windhoek council. A South African developer has offered to buy the erf for N$12 million, with N$7 million expected to be paid upfront and the remaining N$5 million to be paid by instalments over five years. With proceeds from this option and others, the society believes it would pay the loan borrowings in full and also lessen the monthly expenses total by N$65 000. The show society pays rates and taxes for 70 000 m square, which is the area which it uses for its core business of holding fairs, expos, and lease of halls to organisations that promote sports and educational development. According to the document, the society not only wants to embark on a prioritised infrastructure upgrading for its 15 000 square meters, that are needed for the different shows but also other requirements that include establishment of more pens, a poultry section, upgrading the fresh water system, ablution block, creation of an SME area and to fully equip and staff the show office to manage and run its operations. To date several developments have materialized, which include the Standard Bank/Agra Auction Ring and the Auas City Lodge. Under construction now is the Value Centre, which covers an area of 22 000 square meters, while another project to be constructed is an extension of the show ground arena, with an aim of integrating the Maerua Mall complex with the show grounds.
2006-03-30 00:00:00 12 years ago
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