Page 17 - Estimates of Public Entities Revenue & Expenditure 2023

PROVINCE OF THE EASTERN CAPE ESTIMATES OF PUBLIC ENTITIES REVENUE AND EXPENDITURE 2023/24

The ECDC has provided critical skills training to 166 SMMEs in various export development trainings,
online digital platforms and film sector development programmes. The number of jobs facilitated

through trade and investment support are over 375, mainly due to the contributions made by
companies in the marine, manufacturing, tourism and renewable energy.

• Property and Strategic Projects
As at end of the third quarter of 2022/23, the total collection was at R77,749 million from rental

revenue and arrear rental collections. Renewed focus on debt collection and addressing defaulting
tenants has resulted in higher year-on-year rental collection for the period, and this is expected to

continue into the fourth quarter of the year. Prioritising internal capacity with respect to improving
conditions of high potential industrial and commercial properties is expected to assist with higher
rental collection rates and increased revenue. The collection rate is sitting at 68% as a result of

concerted efforts undertaken to yield improved collection rates.

The ECDC has taken a strategic decision to dispose of non-core assets including stand-alone

residential houses and vacant plots under 2000m² in size. The organization has also resolved to
undertake an expression of interest (EOI) process to take selected strategic properties to the market
to secure capital for refurbishment and development in exchange for long term triple net lease

arrangements. The disposal program has been hampered by ongoing land claims in Mthatha and
resistance from tenants in arrears around Butterworth. The disposal strategy has been adjusted to

clear out stalled legacy sales, offering first right of refusal to tenants in good standing and public
auctions outside the Mthatha region. This has resulted in confirmed sales to the value of

R 36.9 million to date, with a projection of R52.9 million by end of the financial year. The proceeds
from the disposal of residential properties are allocated to the refurbishment of the commercial

property portfolio as part of the Property Modernization Strategy. This together with the recently
approved grant funding from provincial government of R132 million over a period of three years will
address the property conditions and make them more attractive for business ventures.

An MOU has been concluded between the ECDC and Public Assets Community Based Tenants

Owners Association (PACTOA) to assume full control of invaded properties by the end of March 2023.
The process has been extended to accommodate the process of normalizing leases with current
occupants. As at the end of the third quarter 7 factories and 130 residential units have been handed

back to the control of the ECDC. An additional 91 units still require normalization. Rental unit
occupancy has increased from 64,9% to 65,3% in quarter 3, which is starting to reflect the impact of
illegal occupants concluding normalization leases with the ECDC in the Mthatha region.

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