The Nelson Mandela Bay Municipality is entertaining the idea of bailing out the cashstrapped Eastern Province Rugby Union (EPRU) with an amount of R15-million spread over three years in exchange for three tests in Port Elizabeth.
The proposal from the Mandela Bay Development Agency (MBDA) was, however, withdrawn from the mayoral committee agenda yesterday pending more details about the proposed deal.
In the report, the agency – which is managing the Nelson Mandela Bay Stadium – said if the city did not help EP Rugby with its R15-million debt, it could lose three test matches over three years, including the one against Argentina in August.
The EPRU is in the process of liquidation and the bailout will prevent the liquidation, according to the MBDA.
“The objective of such a payment is to enter into a compromise agreement with the liquidator,” the report said.
“The desired outcome of the payment is to secure the three tests [and] also to regain the commercial rights to professional rugby and create a clean slate for rugby going forward.
“Such a clean slate will enable a professional relationship with an equity partner and/or sponsor.
“In the past, rugby tests had only been hosted in Nelson Mandela Bay once every three years.
“It needs to be noted that any rugby test generates over R100-million in the form of a direct and indirect economic impact in the city.”
According to the MBDA, if the city does not help EP Rugby, it would mean no test matches would be allocated to the stadium, which is battling financially.