eThekwini to open tender process over Virginia Airport’s redevelopment

The City of Durban council recently approved the advertising of a call for an ‘Expression of Interest’ to develop the airport and will in the next few weeks open the tender process inviting proposals from interested private investors and developers.

According to City spokesperson, Mandla Nsele, the Virginia Airport site redevelopment is a ‘catalytic project’ which could make way for a mixed-use development as well as other facilities such as restaurants and residential accommodation.

“In the case of Virginia Airport redevelopment, feasibility studies were done during 2019, which included consultation with stakeholders such as the current Virginia Airport operators. Only two operators out of 20 operators have signed a short-term tenancy agreement, allowing for one calendar month notice of termination by either party. The other 18 operators have no signed valid lease agreement, and are currently being charged occupational damages, not rental. The latter were fully aware of council’s plans for the possible redevelopment of the Virginia site. The current rental amount set for operators for Virginia Airport is about R12/m2, which is well below the market figure of R125/m2. This means the operators are paying 10 per cent of what they should be paying, thus the taxpayers of the city are subsidising the rental amount by about 90 per cent.

“It is costing this Council an amount of about R5 million per annum towards facilities management and Air Traffic and Navigation Services (ATNS). In short, the City is getting no income from the use of Virginia Airport site, with an asset value of R370 million. Such a business model is certainly not sustainable and other options needs to be pursued. The vision of the Virginia Airport redevelopment is to develop the precinct into a vibrant 24-hour mixed-use city precinct residential units and hospitality and tourism related offerings. The development will provide facilities such as offices, restaurants, tourist attraction and entertainment, and residential accommodation,” Nsele said.