Airfield not sold
Council rejects offer, profitability examined
20 February 2020 | Local News
It remains uncertain as to whether Swakopmund town council will continue managing the local airfield given the fears that it could become a financial burden in the long term. For this reason, council said profitability should be examined.
This decision was made during council’s most recent meeting, following an offer to purchase by Skydive Namibia Swakopmund, who offered N$25 million for the entire airfield.
“The offer must be kept confidential,” according to a letter submitted by Eddie Techman in July 2019 on behalf of the company.
According to a draft resolution, the offer was discussed several times internally.
There are currently 71 hangars, a residential unit, office space, parking spaces, a terminal building and a “dilapidated building” at the airfield. In future, 17 new hangars are planned. Town council permanently employs five people for the airfield.
Since 2012, town council has generated a steady income by renting out aircraft hangars as well as taking off and landing fees.
However, council is concerned about income. In 2012/2013, the profit was around N$670 000, which declined to around N$390 000 by 2018/2019.
“Expenses have risen steadily, while income has stagnated,” according to the draft resolution.
The reason for this is salaries and maintenance, which have risen in contrast to the rental tariffs and landing fees. This trend could result in the airfield becoming a financial burden for council in the foreseeable future.
“If town council were to get N$25 million for the airfield, the money could be invested and an annual income of N$1.375 million (at an interest rate 5.5%) could be made,” it says. Council would also receive an additional monthly income, saying that “because the airfield is no longer urban land, council would receives N$1 962 in fees and charges per month”.
Meanwhile an assessment of the airfield was made in November 2019. The document, like Techman's letter, is included with the draft resolution. According to this, the value of the property on which the airfield is located was estimated at N$1.26 million. A tariff of N$4 500 per hectare had been calculated, and the property is 279ha in size.
“It is proposed that council consider the profitability of the airfield again. If it is deemed necessary to sell the airfield or to outsource the administration, expressions of interest can be obtained,” it said.