05/11/2025
Leasing of the Aliwal Hot Springs: what we know so far — and the questions that remain
Aliwal Hot Springs (often referred to locally as Aliwal Spa) is a long-standing municipal asset and tourist attraction in Aliwal North. In recent weeks Stroke5 News has been told by sources close to the story that the resort’s municipal lease process has generated concern among residents and local stakeholders — including suggestions of irregularities in the tender/award process and questions about certain terms in the signed lease. None of these claims have been independently verified and the matter is still under investigation.
Walter Sisulu Local Municipality
Background: a municipal asset and a notarial lease
Public documents from the Walter Sisulu Local Municipality indicate there is a notarial lease agreement and supporting tender/annexure material relating to the Aliwal Spa Resort and the municipality’s plan to have the property developed, refurbished and commercially operated under a long-term lease. The municipality’s own planning and asset documents describe the springs and the resort as a municipal asset with redevelopment potential.
Walter Sisulu Local Municipality
Reported irregularities and an opened case
Sources close to Stroke5 News say concerns were raised about how bidders were shortlisted, how the winning bidder was evaluated, and whether municipal procurement rules (including council resolutions required under the MFMA) were followed before the lease was finalized. Public posts circulating in the area also say the South African Police Service has opened a case tied to the leasing process; that matter appears to be at the stage of police inquiry and/or internal municipal review. At this point these are allegations and the matter is ongoing — local authorities and the bidder(s) should be asked for formal comment.
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The lease terms that raise questions (what to look for)
From the copies of the lease and tender annexures seen publicly, there are several clauses and features that journalists and residents commonly scrutinize in these situations. Based on the documents and standard procurement/lease practice, key items to check include:
Conditions precedent and council sign-off — Leases of municipal assets are often conditional on a council resolution or fulfilment of specific conditions (e.g., proof of funding, compliance with environmental or zoning rules). If those conditions were not met before occupation or expenditure started, that can be a red flag.
Walter Sisulu Local Municipality
Exclusivity, development obligations and timeframes — Whether the lessee is required to invest in refurbishment by certain milestones, and what penalties exist for missed obligations.
Walter Sisulu Local Municipality
Transparency in scoring and procurement records — Whether the scoring matrix, tender evaluation reports and clearance of conflicts of interest were recorded and are publicly available. (This is often where stakeholders seek clarity.)
Because these items affect both legal compliance and public trust, they are the usual focus of follow-up questions to the municipality, the bidder(s), and the auditor or oversight bodies.
Could the lease allow the lessee to sell the property?
Stakeholders have asked whether the lease might contain a clause allowing the lessee to sell the property (or essentially transfer ownership/control). Two different legal mechanisms are relevant and need to be distinguished:
Assignment or alienation of lease rights — Many commercial lease contracts include provisions allowing the lessee to assign the lease or cede their rights to a third party (often with the lessor’s consent or subject to conditions). Assignment of the lease does not transfer ownership of the underlying immovable property — it transfers the lessee’s contractual rights (for example, the right to operate the resort for the remaining lease term). Whether assignment is permitted, and under what conditions, should be visible inside the lease.
Walter Sisulu Local Municipality
Sale of the municipal property (huur gaat voor koop / buyer-takes-lease) — South African property law recognizes the principle that an existing lease generally survives a sale of the property: a purchaser steps into the shoes of the landlord and the tenant’s lease continues (the principle commonly summarised as huur gaat voor koop). That means that even if the municipality (or a third party) later sells the land or buildings, the buyer normally acquires the property subject to the extant lease obligations — unless the lease contained a specific sale/termination clause or the parties had an agreed right of pre-emption/first refusal. In short, a clause allowing the lessee to sell the underlying municipal immovable property would be highly unusual (and legally fraught) if the lessor remains the municipality; what is more common is a clause that allows assignment of the lessee’s lease rights or first-refusal provisions.
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Practical takeaway: if the lease contains wording that appears to allow the lessee to “sell the property,” that wording needs to be read carefully — journalists and lawyers will want to know whether the wording refers to (a) assignment/transfer of the lessee’s leasehold interest, (b) a right to purchase from the lessor (e.g., an option to buy), or (c) some other arrangement. Any clause that effectively allows privatisation of a municipal asset without a council decision would be legally and politically sensitive.
What residents and accountability actors should ask now
To move from allegation to verifiable fact, the following documents and actions are essential and should be requested or confirmed publicly:
The full, signed notarial lease (redactions for personal/private banking details are acceptable, but not for material lease clauses).
Walter Sisulu Local Municipality
The council resolution and supporting procurement records showing compliance with the Municipal Finance Management Act (MFMA) and the municipality’s Supply Chain Management Policy.
Walter Sisulu Local Municipality
Tender evaluation reports, scoring matrices, conflict-of-interest declarations and any due-diligence or performance-security documents.
Clarification from the municipality and the lessee about any clauses that allow assignment, sale, or options to purchase — and any approvals required for those actions (for example, council or provincial sign-off).
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Responsible reporting note and next steps
Stroke5 News’ sources have provided the claims that form the basis of this article, but those claims remain subject to verification. At the time of writing there are public indications (including municipal documents and community posts) that a lease process took place and that questions have been raised; we will continue to seek comment from the Walter Sisulu Local Municipality, the named lessee/consortium, and any oversight body reviewing the matter. Readers should treat unverified claims as allegations until official records or statements confirm them.
