THE National Social Security Authority (NSSA) last week closed its Beitbridge hotel because the Rainbow Tourism Group (RTG) that was leasing the hotel were failing to pay rent.
BY VICTORIA MTOMBA
In an interview on Friday, NSSA board chairman Robin Vela told Standardbusiness that RTG has not been paying rentals due to the challenging economic environment.
“We are deliberating on the closure of the Beitbridge hotel. This is a challenging environment and we are concerned with the property. I don’t want to prejudge the issue,” Vela said. He said the authority would issue a statement this week on the way forward.
RTG chief executive officer Tendai Madziwanyika said in a separate interview that the company was paying rent to NSSA, although slowly due to cash constraints.
“We were supplementing from our mother company because the hotel did not have the capacity within itself. We paid almost half and we are owing $200 000 in rentals to NSSA,” Madziwanyika said.
Madziwanyika bemoaned lack of market viability, saying the number of people coming to the hotel was very low yet the operational cost were very high.
For the two and half years that the hotel has been operational, the group recorded losses of almost $2 million.
Madziwanyika said the group had put in fittings in the hotel which it will take to its other hotels. He said the fittings that were at Beitbridge Hotel were supposed to have a lifespan of 10 years so they would be taken to other hotels in the group as a way forward.
The hotel is one of NSSA’s investments that have gone bad as the authority seeks to make money from its investments.
Recently NSSA launched the National Building Society that is expected to offer housing loans to ordinary workers in the country.
Analysts have said the move was not wise because the authority had investments in other banks as well.
NSSA’s 140-bed Beitbridge hotel was constructed at a cost of $32 million. NSSA injected capital in the group which was to be paid at 10% interest over five years but that was not possible as the hotel has been a loss maker in the group.