A bitter row over the proposed renewal of Nelson Mandela Bay’s sponsorship of Chippa United erupted into a dramatic standoff in council, with the political head of sports threatening to defer the city’s Ironman sponsorship if councillors delayed the soccer deal.
However, the city’s Ironman sponsorship was earlier approved by the council on Thursday.
Councillors were debating a report to extend Chippa United Football Club’s anchor tenant agreement between the Mandela Bay Development Agency, the municipality and the sports team.
The report also sought approval for a sponsorship fee of R6m per annum for three years, subject to the metro’s logo appearing on the front of the players’ jerseys
Under the proposed new arrangement, the city would no longer pay the R7m annual relocation fee that formed part of the previous agreement.
The report warned that without an anchor tenant, the Nelson Mandela Bay Stadium would be unable to recover some of the costs associated with operating the facility, widening the gap between stadium expenditure and income generated from league matches.
“The consequences would extend to potential stadium partners, sponsors, advertisers, suite holders and event owners considering bringing further events to the venue.
“In the absence of an anchor tenant, a reduction in stadium staffing and consequent job losses may be necessary.
“There is further risk to the stadium becoming under-utilised, requiring the municipality to spend additional funds to attract events to the venue,” the item read.
But the debate took a sharp turn when DA councillor Rano Kayser read out concerns from the municipality’s budget and treasury department, which warned that it could not support the Chippa sponsorship due to National Treasury guidance, a high court judgment and the absence of a legal opinion.
Kayser questioned whether councillors were being asked to approve a transaction their own financial officials had effectively warned could be unlawful.
“If we implement this in line with Circular 131, it’s an unlawful transaction.
“What do we do then if budget and treasury says it’s unlawful?
“Are we approving something we’re advised against as politicians,” Kayser said.
He called for the report to be deferred until a legal opinion had been obtained.
ACDP councillor Lance Grootboom backed this proposal, warning that the metro was already burdened with billions of rand in irregular, unauthorised, fruitless and wasteful expenditure.
He said the city could not afford to approve another legally questionable contract.
“It becomes very important for the house to take legal decisions.
“We’re sitting with major problems with a contract that’s concluded that violates several legislations.
“If we proceed, there are problems.
“At the end of the day, this will be an irregular item. Rather send the matter back to the committee and get a legal opinion.”
DA councillor Sebenzile Rafani said the committee had merely agreed to note the report rather than recommend it for council approval.
He said this was due to unresolved legal concerns.
However, sports, recreation, arts and culture political head Sinebhongo Kwatsha rejected calls for a delay, saying chief financial officer Jackson Ngcelwane had supported the revised proposal after officials removed the controversial relocation fee from the agreement.
Kwatsha argued that the absence of a legal opinion was not sufficient reason to halt the process, noting that council had approved the Ironman event sponsorship under similar circumstances.
“We no longer pay a relocation fee.
“So Ngcelwane said the item can go through. The legal opinion does not stop us from approving any item.
“I will refer to the Ironman item that we have just passed. Then we must also defer that item because it’s also citing a legal opinion.
“I am willing if they want me to defer the item.
“Then I am also going to defer Ironman because Ironman also needs a legal opinion.
“[The] DA must not come here and want us to pass items that they feel like supporting for their own children.
“Meanwhile, our kids are deprived of going to play soccer.
“That is not going to happen under my watch, speaker.
“If we are deferring the Chippa, we are deferring Ironman.
“It’s as simple as that, because they are both looking for a legal opinion,” Kwatsha said.
However, speaker Eugene Johnson told Kwatsha that the Ironman item had long been passed.
Mayor Babalwa Lobishe agreed that the report be deferred until the next council meeting to address the outstanding issues.
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