The Eastern Cape's Buffalo City metro has unveiled a R3.4 million mall made from shipping containers to be used by township entrepreneurs in East London.

Residents are questioning the hefty price tag for the modest facility, but a forum of black entrepreneurs welcomed the project. 

On Friday, amid fanfare, mayor Xola Pakati handed over the mall at Scenery Park, one of the area's oldest townships.  

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Traders would run fast food outlets, hair salons, internet cafés, shoe repairs stores, art and crafts businesses and a printing shop from the containers.

The project formed part of the City's business development unit's informal trader infrastructure programme, first rolled out in 2018 in Ntabozuko, Mdantsane, Zwelitsha and Bhisho.

Seventeen local entrepreneurs would benefit from the project.  

The municipality said due to the success of the programme in other areas, it decided to take it to different areas across the city, including Scenery Park.

East London had one of the highest unemployment rates in the province.

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With the informal traders infrastructure programme, the metro hoped to reverse this trend by creating job opportunities and hoped to revive the region's economy.

The municipality said it opted for this type of structure as it was mobile and easier to move in time of emergencies.

Buffalo City Metro in EC has handed over shipping container mall in Scenery Park that cost over R3.4 million. The R3.4 million 'container mall' will feature SMEs like Saloons, Shoe Repairs, craft shops etc. pic.twitter.com/omFcgJwPbu

The municipality said the temperature-controlled container mall had been connected to electricity and water infrastructure.

It added that to eliminate vandalism and offer safety for traders, the municipality built fencing around the mall.

"The municipality has invested R3.4 million in this project which will also be rolled out in other townships," the metro said in a statement.  

City spokesperson Samkelo Ngwenya defended the price tag. 

"The cost of R3.4 million is not only for purchasing repurposed containers, but it also involves preparing a site from scratch, slabs and installing some of the services that are in place and others that are underway," Ngwenya said. 

He added that the procurement system was in line with the Municipal Finance Management Act which stipulated methods to be used when purchasing goods and services and how to competitively ensure that container bids were in line.

The metro's statement added that the mall was a "community-owned project whose institutional setup is premised on generating economic value to contribute towards the City's economic growth".

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Speaking during the handover, Pakati said: "This is our commitment towards sustaining the township economy and it ensures that our entrepreneurs have a reliable business hub to operate from.

"This is another initiative by the municipality to fight unemployment in our City," added Pakati.

One of the beneficiaries, Thabo Sabetshu, who will be running a hair salon from the mall, said: "I'm so thankful to the metro because now we have a safe place for our businesses. The City has now taken us from nowhere to somewhere."

The Eastern Cape Black Business Forum (BBF) also welcomed the facility and commended the municipality.

TV personality and BBF CEO, Ace Ncobo, said the forum hoped other municipalities would follow suit.

"One of the biggest barriers to entry for entrepreneurs is the prohibitive cost of space. For a small, owner-operated enterprise, space is the largest cost item on the expense sheet, bearing a significant downward pressure on the bottom line," said Ncobo.

"When a state entity sponsors the establishment of trading facilities, it is, in fact, lowering barriers to entry whilst simultaneously contributing to a drastic improvement in profitability."

The biggest business, economic and market news of the day, by Fin24 deputy editor, Ahmed Areff.

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