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Mediclinic barred from building new hospital

Refused permission for R700m development in George.

Mediclinic approached George Municipality nearly five years ago for permission to build a new, modern hospital to replace its two smaller facilities in the city centre. George, often hailed as the fastest-growing city in the Western Cape, has refused to give Mediclinic permission for the new hospital planned to be a stone’s throw from the town’s new development hub to the south-east of the city centre.

Read: Mediclinic says profitability due to efficiencies, not dominance

The municipality contends that the piece of ground – situated between the Garden Route Mall, a housing development and a filling station – falls outside the so-called urban edge and says it will not allow the development of a hospital or any other commercial activity on the property.

Boundaries moved

The developer driving the project, Magnolia Property Development, says these particular plots were included in the urban edge when it acquired them in 2007, but were excluded in 2014 when the municipality moved the boundaries for purposes of urban development.

The property was the site of an old saw mill that closed down decades ago. Several rusted corrugated iron sheds are still standing, but new roads have been built during the last few years to service the surrounding housing estates, shopping centres and businesses.

The municipality also said that it would be difficult to extend the routes of its public buses to include a bus stop near Mediclinic’s proposed site (a kilometre further down the road). However, the municipality promised during public meetings over the years to extend the bus service to Wilderness, another 15km further.

Council documents show that two other developers – who happen to own undeveloped property nearby – also raised objections to development on the site of the old saw mill.

Coincidently, George Municipality also owns a property nearby that just happens to be earmarked for a new hospital.

The municipality has been trying to sell this particular property since at least 2010. Invasive trees have been cleared from the 20 hectare property during the last few months and discussions were, once again, held with the George Riding Club to vacate the property. The riding club has been leasing the property from the municipality for the last 30 years and previous attempts to sell the property included provisions that the buyer pay towards the cost of moving the horses and infrastructure to a new site.

Mediclinic’s next move?

Neither the municipality nor Mediclinic elected to answer questions emailed by Moneyweb earlier this week, the most pressing of which is whether Mediclinic is considering building its new hospital in one of the neighbouring towns – or walking away completely.

Mediclinic has hospitals in Oudtshoorn and Plettenberg Bay, but not Mossel Bay or Knysna. It is notable that Sedgefield, less than 20km from where Mediclinic would have liked to build its new hospital in George, is experiencing a building boom on open property on both sides of the national road.

These developments include a new shopping centre, new residential developments and retirement villages, as well as smaller retail developments. Medical facilities are lacking, with the town nicely positioned between Knysna and George. Sedgefield is part of Knysna. Perhaps its municipality would welcome a new hospital.

And its growing international interests …

It is even more interesting – and worrisome – to see how Mediclinic has been growing its international hospital interests. While SA is still by far the largest in terms of facilities, it is trailing Switzerland in terms of revenue with the United Arab Emirates (UAE) not far behind.

Revenue by country, year to March 2019 (£m)

Switzerland 1 368
South Africa  886
United Arab Emirates  677
Total 2 932

Source: Mediclinic annual report 2019

The annual report for the year to March 2019 discloses that Mediclinic is also spending far more on capital expenditure outside SA. Capex on new projects, new equipment and replacement of equipment amounted to £66 million in the group’s SA operations, equal to around R1.2 billion at the average exchange rate given in the annual report.

Mediclinic spent £72 million (nearly R1.3 billion) in Switzerland and a massive £94 million (close to R1.7 billion) in the UAE. Maybe local municipalities in Switzerland and the UAE are more understanding when it comes to the health, and employment, of their citizens.

Mediclinic employed more than 32 000 people at the end of March 2019, with the majority now outside of SA.

The number of Mediclinic employees in Switzerland has been growing steadily over the last three years … and declining in SA.

Employee numbers have been largely stable in the UAE, but the huge capex programme bodes well for new employment opportunities.

Queuing for space in SA

Meanwhile, patients in George and the surrounding areas are queuing for space at one of the smaller operating theatres, with doctors running from building to building and scheduling small surgeries between more elaborate operations.

Hospital administrators are leasing their theatre space by the minute, with some slots as short as 12 minutes.

Mediclinic is not the only investor that has seen its investment plans go awry in the southern Cape.

And chasing investment away

An investment company from Indonesia has decided to walk away from an investment rumoured to exceed R500 million in Calitzdorp. This came after opposition parties in the Garden Route District Council started asking questions on learning that the mayor and a delegation of officials received a free trip to Indonesia from the prospective investor.

The DA cleared mayor Memory Booysen from wrongdoing during a disciplinary hearing, but councillors objected, saying that an understanding was apparently signed during the trip that would have given the investor an advantage in securing a 50-year lease on the Calitzdorp Spa Resort.

It seems the proposed investment to upgrade the minerals springs at Calitzdorp is off the table for now.

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I have a win win solution for both Mediclinic and the Municipality of George. With the NHI looming, replace the proposed hospital with a graveyard. Seeing that our health system will be collapsing anyway, it makes more sense to focus on the dearly departed than those trying to fight illness 🙂

Jip Danie – Time to call in Calgro!!!

I live in George. Yep, the brown packet is not bulky enough and there is a fat rat in the Municipality. This is obvious if you read between the lines of the local weekly paper.
Our Municipality should not underestimate the huge benefits of Mediclinic to our area and town.They must go out of their way to accommodate them.

Urban edge…?It is strange that this did not effect the Chinese and their so called Sallywood development our Municpality and Mayor recently celebrated?

Danie, you may have point there.

I see in my mind’s eye, we will become a true “funeral mecca” with people coming from afar to select from plethora of “boutique” style funeral options.

Just imagine the possibility of more contributions flowing into the funeral-industry, than the current medical-scheme industry 😉

Besides, one can dolly up a hearse’s appearance to stand out from the crowd….way better one can may an ambulance look like 😉

I think here is serious business…maybe start a business where you change an existing hearse with a specific “theme”. One’s imagination is the limit.

Typical short sighted SA view.

I suppose the brown paper packet was not bulky enough.

well, well i am smelling a fat rat in the george municipality.

i can only say to george voters:”keep this issue / decision by george municipality in mind when the next voting time comes, and ask yourself: “who deprived us for longer than 10 years of a near-future 100% necessity as well as job opportunities directly and indirectly linked to the developing of a new modern hospital, and is george municipality at all concerned about our(the ratepayer’s) health????”

Strange, healthwise the rest of the developed world goes into a total opposite, but proven, direction than what sa’s government prefers (NHI) – proving healthwise we are still in a 3rd world country.

Meanwhile in Paarl, the Council need not disallow anything : customer choose to go to Montagu Gardens, despite a R20/sqm price rental premium there, because of Paarl’s energy tariffs. If a factory uses the same energy as last year : 55% increase. In their definition a low load factor user is a Bulk User, selling is over 200% of cost whereas nersa permits 158% to 162%

But no worries, they left the new mansions on residential scheme as opposed to moving them to Time of Use where they belong AND to add insult, they inserted a reseller that pockets the margin between wholesale and retail – on thousands of high value homes.

Thank you Paarl – another 60 jobs gone. And like Springsteen said – they ain’t coming back, to your home town.

to be quite honest, i actually thought the insight in a long term planned future / development for a town like paarl would be one of the better ones – how wrong could one be? it is this type of management / planning whose results are people wandering in the dorpie’s streets in the near future – why will i invest a single cent in it while the council (funded by the ratepayer) has such an arrogant attitude towards the ratepayer / work provider???

paarl disqualified itself also as a possible retirement town for us

We live in George and this issue has been going on for a while now. This hospital is urgently required … there is only one Private Hospital… the old Medlcinic where there is no parking . It is as if this is a “tit -for -tat ” move by the council and we are fed-up with it. The horse riding school delivers flies and noise, polution right next door to the biggest growth area and is the ideal site for such a hospital.We require jobs in SA ??? Well please ask MR CR to send a team to investigate this nonsense in George please

I see the massive politicisation of the medical industry and it is scary.

Well this is the whole reason for the creation of the NHI. The ANC has bankrupted every other source of SOE kickbacks and jobs for friends and families.

Can Singapore hospitals accomodate more politicians from Africa?

What if Mediclinic and the Municipality just swap properties and then the horses move and the people get a hospital? This way a lot of jobs are created and the peoples’ needs are heard?

That R500m has been lost from developing a spa in Calitzdorp! That’s like denying a starving donkey water and oats.

It seems these councils either are all corrupt or simply useless business people.

This looks like a Medi-clinic/ Developer sponsored advert ?

There is more than enough space to redevelop both of the current Medi-clinic sites in George. It just takes planning.

City centers “die” and turn into “rot” when developers keep moving established businesses out of the city center. This is George – not a large city where space is lacking.

Use Go-George and walk or use a taxi and/ or lifts.

Maybe we should also ask which persons would benefit financially from such a move.

The current hospital is outdated and there is negligent parking there as well at the surrounding doctors’ rooms. George municipality is probably protecting a few pals’ coffee shops and the like. For both patients and family it is very inconvenient.

Sorry Griet, but you cant just build a new Hospital every time it ages past 30 years …

There are interesting unintended consequences of council plans. Bellville promoted the heck out of centuty city and n1 city and mantague city. Lekker – developer gets waiver on bulk services, rate rebates for 5 years, fast-track approvals. Within a decade the old mid-town and Van Riebeeck road all the way to the Castle was a dump. There is no upmarket retail, the banks moved to glitzy spots, the spin off services like superettes and hairdressers and tailors fled. Lots of scrap metal junk yards and boarded up places where heaven knows what happens.

Nodes should develop on proven economic growth and demand. Otherwise businesses just move and leave a slum. Ask JHB about two old good nodes that are now no-go-zones.

And this is a decision taken by a municipality that is currently being investigated by the Provincial Administration (MEC) for corruption!!!

The same municipality – different mayor that turned down the option of a SA tourism massive grant in exchange for providing the “ old crocodile” farm piece of land , derelict for years to be used as a Tourism convention / tourism regional office centre( garden route & Klein Karoo) and local residents craft venue all in one thus providing job / securing permanent access to the western cape “ tourism marketing pot of gold they get and use mainly for Cape Town and placing the Garden route as a go to venue as part of South Africa rather than an add on to western cape… which ultimately would have led over time to thousands of tourism jobs / property value increases and extension of airport or maybe even international status over longer term- but no some one wants to sell that piece of land ( brown envelope attached )?
Same group who spent tax papers money on the York school hostel in town Centre,only to leave it derelictand to vagrants rather than lease to an company or someone to use as offices/ over night accommodation for homeless people or sell to a retail company etc what ever whilst they wait to decide what to do with property or wait for the gayest “ brown envelope”- these and others such as recent sales of public land for R1.00 need in-depth investigation to understand why truest this municipality is holding back the city

And George municipality/local government shines in their absence!

Note that I plan to move to George one day, or, perhaps not…
Come on George – I would like to see your respond to the article and that mentioned.

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