Did greed kill the yacht club?

The ongoing tale of woe at the former premises of the Mossel Bay Yacht and Boat Club (MBYBC) has entered a new stage.

Two and a half years after the Transnet National Ports Authority (TNPA) evicted MBYBC and awarded a rental contract for the property to a small private company, the authorities have started the legal process to evict the new operators.


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It came to light that the new occupant, Mossel Bay Waterfront (Pty) Ltd, has not paid any rent, nor did it bother to pay the initial deposit.

Despite TPNA neglecting to collect the deposit of more than R1 million from Waterfront at the beginning of the rental period, it apparently allowed the tenant to occupy the premises. Waterfront has been squatting there since February 2019.

This was disclosed in an email sent to Moneyweb by a whistleblower, who attached a statement of all transactions to the end of August 2020. At that date, the outstanding balance exceeded R2.4 million.

That it took TNPA more than two years to take corrective action stands in stark contrast to the quick and severe action Transnet management and its legal team took to evict the yacht club.

A thick pile of court documents shows the lengths to which TNPA has gone to ensure that the premises went to Waterfront.

MBYBC argues in court documents (asking for a review of the process when Waterfront got the contract) that the yacht club has been paying its rent every month for more than 60 years. When TNPA refused to extend the club’s rental agreement, the rent amounted to more than R108 000 per month.

It seems like easy money to earn, but TNPA elected to call for tenders and picked a bad contender.


MBYBC members were surprised when a tender for a new lease agreement in 2016 was awarded to the newly-formed private company.

The yacht club had had a rental agreement with the port authorities since its formation in 1956, and all the buildings and facilities were built by members at their own cost over the years.

The then South African Railways & Harbours Administration offered 15- and 20-year rent contracts and charged nominal rent, as responsible governments do to support beneficial activities like sporting bodies.

The rent increased slowly over the years, and then sharply after Railways & Harbours morphed into Portnet.

According to a newsletter sent to members towards the end of 2018: “When the last long-term lease ended in 2004, the club was given only a 5-year lease and the rental for the premises increased drastically from R17 000 per year to R17 000 per month. This amount has now escalated to R74 000 per month for the club’s premises, excluding the mooring rental fee of R35 000 per month.”

By then, in late 2018, the club was embroiled in a three-year legal battle to try to hold on to the property in which members have invested maybe millions over the years.


The surprise came when TPNA announced the result of the tender in 2016. In short, MBYBC added the normal 10% escalation to its existing rent to its bid, offering to pay rent of just less than R118 000 per month.

The club’s committee probably thought it was good enough for a property that the club could argue ‘belonged’ to them, seeing that all the buildings and improvements were paid for by members. A history of the club notes that the club started off on nothing more than a rocky shore and built everything itself.

These improvements included not only the large clubhouse, bathrooms, storage space for equipment, and reclaiming land from the sea to build a new pier and slipway, but also R1 million spent on a floating dock inside the harbour that contained 50 convenient walk-on moorings.

Unfortunately, the unknown Waterfront tendered R200 per month more and won the tender.

TPNA has subsequently lost out on more R3.6 million in rent since evicting MBYBC (based on a 10% escalation). This is a small amount in comparison to Transnet’s annual fruitless and wasteful expenditure of billions, or taxpayers’ continued support to the tune of billions.

Read: Transnet still suffers from state capture’s harmful impact (Oct 2019)

Mossel Bay Waterfront

Waterfront belongs to Verna Durand, the wife of a former member of the yacht club.

Durand convinced TNPA that the company was largely black-owned and committed to transforming the yacht club’s overwhelming white membership.

MBYBC called for a review of the tender, arguing in court documents during the review and subsequent appeals that Waterfront failed to comply with most of the tender conditions. The most compelling argument was that Waterfront could not prove that it would be able to pay the rent.

Waterfront did not submit three years’ worth of audited financial statements as required by the tender conditions, its tax affairs were unknown, and it could not provide any guarantee or surety that rent would be paid.

‘Fair’ process

Durand countered that members would support a new club and that membership fees would cover the rent.

TPNA submitted to court that it is nonsensical to expect a new, female-owned company with largely black shareholders to submit three years’ worth of financial records.

The courts, all the way to the Cape Town High Court and the Supreme Court of Appeal, ruled against MBYBC by saying that the process was fair.

MBYBC’s pleadings that it was a non-profitable organisation in good financial standing fell on deaf ears and the club was finally evicted at the beginning of 2019.

Meanwhile, TPNA and the courts failed to pick up that Waterfront didn’t have any black shareholders.

The Companies and Intellectual Property Commission (CIPC) database show Durand as the only director and only shareholder of Waterfront in its initial registration.

More telling about the standing of Waterfront is that it never submitted any of the required returns after the initial registration.

Durand did not respond to questions about its black economic empowerment (BEE) standing.

Sailing came to a halt

Yacht club members didn’t take kindly to the hijacking of their club and most of the 700 MBYBC members refused to join the new club under the umbrella of Waterfront.

Neither Durand nor any official of Mossel Bay Waterfront responded to queries about the club and its membership. It is unclear if the new club was formally founded.

The Waterfront website and Facebook page do not mention a club committee, election of office bearers, member meetings or a constitution – as one would normally expect when looking at sporting bodies.

After nearly three years, the website contains mostly lorem ipsum text (meaningless placeholder or dummy text to fill a space in DIY website templates) and the Facebook page largely advertises food, drink and rock bands.

The Waterfront club is also not affiliated to SA Sailing, the controlling body of sailing in SA that ensures safety standards and regulates sailing.

National and international sailing events were cancelled and the development sailing initiative at the club came to a halt.

Some owners of larger boats moved to other yacht clubs, while most refused to accept a new rental agreement for their moorings. Boat owners had previously paid a refundable capital contribution to MBYBC to secure a mooring and paid around R600 per month in rental.

Durand said these rights lapsed and demanded R2 200 annual membership fees for membership of the new “club” and monthly rental of R1 800 per month for a mooring.

Uncertain outlook

The future for the MBYBC, the yacht club without a home, remains uncertain.

Evicting Durand might take a long time, and there is no guarantee that TNPA will do the right thing next time around.

TPNA responded to questions with a terse email, saying that legal processes are under way to deal with the situation: “… as matters related to the contract are both confidential and sub judice, we will not be commenting publicly and request that the media allow the legal process currently under way to take its course.”

It will take decades to undo the damage, with members pointing out that the situation is not unique to Mossel Bay. Several yacht clubs have failed in recent years, or have been changed to drinking and dancing venues.

Source: moneyweb.co.za