R1bn investment for PE’s Boardwalk

4 October 2010

Emfuleni Resorts, together with its partners Sun International and Zonwabise Resort Holdings, are to invest R1-billion in a new five-star hotel and international standard convention centre, as well as a new casino, at the Boardwalk in Port Elizabeth.

The investment formed part of a bid to the Eastern Cape Gambling and Betting Board to have the gambling licence for the Boardwalk Casino and Entertainment World extended for a further 15 years.

Other improvements to the centre will include additional retail space, a spa and fitness centre, a spectacular water fountain, and additional parking areas.

Contributing taxes, sustaining jobs

According to Sun International, both the Eastern Cape province and the national fiscus stand to benefit materially. “By 2025 an estimated R600-million will be contributed to [the] government by way of taxes, levies and fees, and the Boardwalk is expected to have contributed as much as a cumulative R26-billion to indirect household income,” the company said in a statement this week.

The total number of direct jobs would increase by approximately 480 to around 2 100 once the development was fully completed, while the total number of direct and indirect jobs would almost double from about 4 300 in 2009 to about 8 300 in 2025.

Importantly, the renewal of the licence would mean the continuation of the subsidy to the Fish River Sun situated outside Port Alfred, and a capital injection of R30-million, which maintains a significant number of critically needed jobs and supports a number of other businesses in an economically depressed area.

Black economic empowerment

At the start of the new licence period, Emfuleni will have an effective black economic empowerment (BEE) shareholding of 52%, with an Eastern Cape-based BEE shareholding of 35.6%. It is projected that through the 15-year life of the casino licence, empowerment shareholders will effectively receive R1.6-billion in dividends.

“Preferential procurement also stands to gain, with the Boardwalk committing to sourcing a minimum of 55% of its goods and services from local suppliers, and 65% from BEE suppliers both locally and nationally,” the statement read.

Emfuleni will also contribute 1% and 3% of its net profit after tax to social investment projects and enterprise development respectively over the 15-year licence period, resulting in an expenditure of some R120-million.

“The majority of this spend will be allocated to ongoing and new community projects for the benefit of black Eastern Cape citizens and will significantly benefit communities in the Eastern Cape province,” the statement read.

Tourism icon

According to Sun International, the Boardwalk has become a tourism icon for Nelson Mandela Bay, with over 30-million visitors to date.

“It is the second-favourite attraction in the Nelson Mandela Bay Metro after the beaches and, over and above its state-of-the-art casino, is a tourism destination for families with its mix of hotels, lakes, shops, restaurants, cinemas, children’s entertainment facilities, festivals and events.”

SAinfo reporter

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