TUNTEX PAYS E4 RENT FOR E50M GOVT STRUCTURE

MBABANE - The Swazi Government prefers to earn E4 from a property investment instead of a possible E2 520 000 on a monthly basis.

This is due to the fact that the Swazi government has so far failed to repossess the E50 million investment from Tuntex Group as per their agreement.
Government leased land to Tuntex for 50 years and the latter is paying a nominal fee of E50 per year which is equivalent to E4 per month. The land is more than six hectares in size. A square metre charges E40 for rental at Matsapha Industrial site and E80 in the Central Business District (CBD).

To rent a one room house around Matsapha is around E500 a month while at Mobeni Flats it’s around E2 300.
Currently, there is a dispute between Tuntex and the Swazi government.
The agreement was that Tuntex would return the land to the Swazi government after the 50 years, inclusive of any structures that may have been set up. On the flipside, Tuntex is declining to follow the initial agreement and wants government to reconsider. The reason why government wants to cancel the deal with Tuntex is that the latter experienced economic challenges, 38 years into the lease agreement and wanted to enter into business with another company to save the situation, which was to sell the business to Logico.

The background of the matter is that in the 1990s, Tuntex was encouraged by the Taiwanese Government to invest in the kingdom of Swaziland.
In 1996 and 1999, Tuntex Textile (PTY) Company Ltd and Tuntex Garment (PTY) Company Ltd, respectively, entered into a 50-year lease agreement (for the land in which Tuntex is built), with the government of Swaziland, in order to invest and establish a business to create job opportunities to Swazis.

According to the 50-year agreement, and among other components of the lease, Tuntex undertook to hand over the factory and premises to government, on a 12-month notice.
“Otherwise, the lease may be renewed for such further period as may be agreed upon by the two parties,” reads the agreement in part.

Te-Shengp Yang, Chairman of Tuntex Group, has prepared the document as an appeal to government. The document was also endorsed by Anthony Geldard, on behalf of Logico.
Part of the document states that in the year 2012, an unexpected challenge surfaced and it led to cessation of manufacturing and operations. This was due to overseas buyers suddenly stopping the placing of orders for goods from Swaziland as they could not be entitled to the benefits they had expected.
“For more than three years, we were not getting any orders and maintaining the factories cost us about E276 200 (US$20 000) per month, which is spent to cater for security, lighting, light maintenance, keeping and paying local and expert staff,” said Yang.

Post your comment

Your name:

Your e-mail address:

Add your comments:

Please enter the code you see in the image:

Image:

Code: