Johannesburg - The government has snubbed the management and financiers of South Africa's biggest tea estate and its funders, by handing it over to the beneficiaries of a land claim.
Land affairs and agriculture minister Lulu Xingwana was yesterday due to hand over the Magwa tea estate, in Lusikisiki in the Eastern Cape, to 1 651 households from three villages of Lambasi, Mandebeleni and Ntlavukazi.
Magwa tea estate management and the plantation's funders, MAN Ferrostaal, had by Friday not been told of the handover.
The event was also to be attended by the Eastern Cape MEC for agriculture, Gugile Nkwinti, Amampondo King Mpondombili Sigcau and the chief land claims commissioner Thozamile Gwanya.
Lusikisiki is one the poorest South Africa towns, with most of its inhabitants unemployed. Magwa, the only significant employer in Pondoland, employs 2 800 people, of whom 1 200 are permanent. It comprises 5 200ha, of which 1 200ha are cultivated.
The land to be handed over consists of 12 215ha and is valued at R62 million, according to the department of land affairs.
The Magwa community was removed from its ancestral land in 1961 to make way for the "betterment policy" of the Transkei bantustan.
Ian Crawford, Magwa's general manager, said he was unaware of the finer details of the land handover and was still awaiting notification.
Morley Nkosi, the executive chairman of Ferrostaal Investment South Africa (Ferisa), said he heard of the handover for the first time when contacted by Business Report.
He said his company had already spent R16 million on the estate and there was another R7 million still due.
Nkosi also said Ferisa knew there was a land claim against the estate during the negotiations with the government, but the company was given the impression that it would be resolved.
The Magwa tea estate has always been a problem child of the Eastern Cape government.
The company was established in 1965 as a Transkei parastatal. It first hit hard times in 1998 when five senior management members were arrested after going on a R10 million spending spree when the company's liquidation was announced, after reports of financial and administrative chaos.
Magwa was reopened in 2004 after Ferisa brought in a Ugandan partner, Madhvani, which was prepared to take on the project.
Negotiations between Madhvani, Ferisa and the Eastern Cape government stalled because the government wanted a joint venture between the estate's nominal owners - the workers - and the foreign partners.
The government also said the Germans and the Ugandans were trying to push through a deal that had minimum performance requirements, lacked detailed deliverables, checks, balances, enforcement mechanisms and made no concrete employment commitments.
Also at the core of the problem were "legacies", such as who took responsibility for more than R10 million in outstanding wages and the repair of derelict equipment.
When the issues could not be resolved, the Ugandans exited the project and the government brought in JV Gokal, India's third-largest tea producer, as a management partner and a marketing agent.
Gokal exited in July and Crawford said he did not know why. An Eastern Cape Development Corporation spokesperson, who had promised to answers questions, did not do so.
At the time of going to press, land affairs had not replied.