Acsa's new plot rental terms have far-reaching impact

GEORGE NEWS - New terms of plot rental in the general aviation area of the George Airport will result in millions of rands of developments and improvements done over years by tenants becoming the property of Airports Company South Africa (Acsa).

It is estimated that tenants have created in excess of R140m of infrastructure.

"Basically Acsa has decided that whatever development and improvements the tenants have paid for, now belongs to them and now they will charge us a premium for improvements we have paid for," said one tenant.

"This has caused a huge outcry among long-term tenants who have spent many years developing their businesses, only to have their own improvements hijacked from them."

Another tenant, who has been hiring a plot from in the general aviation area for 20 years, explained that he has a five-year renewable contract with Acsa.

"Originally, tenants had to remove all improvements, should they leave. This was changed and hangars were allowed to be dismantled and removed, but not brick and mortar structures. Now you must leave everything behind. What is also worrying, is that the new contract does not have any provisions for renewal or rates, so after five years you could be out of premises or the rate could be too exorbitant to be viable. So they simply dispossess tenants. However, we believe we have a legal leg to stand on as the infrastructure has been constructed under a different agreement. We question whether Acsa can legally simply take over the improvements."

Tenants are concerned over the future maintenance of the buildings and hangars when these are in Acsa's possession, as already general maintenance at the airport is being neglected.

This happened in the case of Martin Steynberg, CEO of the Titan Helicopter Group, who left Cape Town Airport when his 10-year lease there lapsed in 2011.

"They take the building, then charge enormous rental and then they do not maintain anything. Our roofs were leaking and our helicopters suffered damage because of corrosion. We eventually replaced some of the roofs at our own cost. It is a typical problem at most of Africa's airports. The best for these unhappy tenants is to take them to court. We won the arbitration, but our legal battle is still ongoing. Acsa is ignoring the court findings."

Titan bought its own premises in the Pacaltsdorp industrial area to operate from. Steynberg said at the time he had investigated the possibility of creating a private runway, but the costs are too high.

Dr Dennis Farrell, local business analyst, said the question is whether Acsa's rural airports are the next state-owned enterprise to collapse. "As for the complaints of the aviation businesses, Acsa does not listen to their concerns."

Maintenance

According to a disgruntled tenant, maintenance is an afterthought, and when it is done, it is poorly carried out. "The Acsa access road to the general aviation section is full of potholes which are half-heartedly filled, only to open up again when it rains. My wife took a flight out of George recently and remarked how unkempt and filthy the toilets were."

Grass, which used to be cut every two weeks, is now cut about once a year, he says.

In an interview on Cape Talk in September last year about the state of South Africa's major airports, Acsa CEO Bruce Whitfield said the company has increased its budget for maintenance and it had started a programme of "catch-up maintenance", "... so you should see a significant improvement in the state of our airports".

In response to the tenants' concerns, Acsa issued the following statement:

"Acsa’s vision is to be the most sought-after partner in the world for the provision of sustainable airport management solutions by 2030. To this end, Acsa has adopted the 'Recover and Sustain' strategy in which we have identified focus areas from now until 2030.
"Each contract between Acsa and aviation tenants stipulates that all tenants are entitled, at all times, to effect any repairs, alterations, improvements or additions to the airport (generically referred to as the “development”). This may be required or prescribed by any lawful authority and ACSA may for such purpose erect scaffolding, boarding and/ or any other works in, at, near or in front of the premises, together with such other devices as may be required by law or determined by Acsa to be necessary in order to affect such development.
"The rental of each lease contract escalates on each anniversary of the commencement date by the percentage stipulated in within the contract. Furthermore, all assessment rates, taxes and other impositions which may at any time be payable in respect of the premises are communicated with the tenant prior to any adjustments being implemented."

Cleanliness and maintenance at the airport

"Acsa has noted the grievance by your publication as well as the passenger concern regarding the situation at George Airport.

"Firstly, we would like to take the opportunity to apologize to the passenger for the experience she endured while using our facilities. It is contrary to what we stand for as a company, and as an airport. We are consistently in pursuit of ensuring all our airport users and passengers have the most pleasant experience when using our airport.

"Procurement is being expedited to appoint a landscape and gardening service provider for 12 months, which will be in place by 30 May. In the interim, we have secured measures with internal staff to target high-priority areas on an ad hoc basis. We would like to assure you that both our current cleaning and waste management service providers (together with internal resources) are doing litter management daily where required.

"The cleaning service providers are cleaning toilets daily, and further investigation has commenced identifying possible oversights and closer alignment of cleaning frequencies with airport peak times. Please also note that the ablutions have been partially upgraded, whilst some are due to be upgraded in the next 24 months."

A tenant at the general aviation area of the airport says the grass used to be cut regularly. Now it happens once a year. Litter is also not picked up. Photo: Alida de Beer