NEWS RELEASE                                                                                             7 May 2002 

CITY COFFERS TO BENEFIT FROM SALE OF EPPING FRESH PRODUCE MARKET 

After careful consideration of the options, the City of Cape Town has taken the landmark decision to sell the Epping Fresh Produce Market – one of 17 throughout the country – to the private sector.

The sale of the business operations of the market will go through the full tender process. Land and buildings will be leased to the successful bidder at a rental that ensures viability.

Councillor David Erleigh, the City of Cape Town’s Executive Committee Member for Trading Services, said an in-depth study by consultants Organisation Development Africa had revealed that the Epping Market could be non-viable by 2004 under the present method of operation.

“Since deregulation in 1992 the Market has been in head-on competition with the private sector,” he said. “All fresh produce markets in South Africa are experiencing static growth because of this new competitive environment, and we expect the position to worsen unless the operation is disposed of in a way that poses minimum risk to the City.”

He said staff would probably be transferred as part of a going concern, but the City would also consider redeployment to other Council departments.

“We need a fresh produce market in a major metropolitan area like Cape Town, but it should be operated by the private sector as it is a business undertaking, and not part of the core business of the City,” said Councillor Erleigh.

Since deregulation in 1992, organisations in the fresh produce industry have been calling for markets to be placed in the commercial environment. These organisations include the National Agricultural Marketing Council, Fresh Produce South Africa and the Human Sciences Research Council.

After considering various options for the sale, the City opted for the sale of the business operations and the lease of the land and buildings because it poses the least risk to the Council.

As a first step the City will appoint a transaction adviser to assist with the implementation of the sale, said Councillor Erleigh.

“It will be a long and complex exercise with a transaction value of around R67 million,” he said, “but the long term benefits to the City are substantial. One of the positive aspects is that we can sell off excess land and buildings for about R14 million.”

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