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.
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.
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)
|United Arab Emirates||677|
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.