More ‘crooked’ state lease deals

More ‘crooked’ state lease deals
June 11 2012 at 04:36pm

Mogomotsi Magome



A REVIEW OF government property leases worth around R3 billion a year is expected to uncover widespread corruption. So says Acting Director-General of Public Works Mandisa Fatyela-Lindie in an interview with the Pretoria News.

Fatyela-Lindie said the review of the leases was already indicating collusion between landlords and banks and she expected it would uncover deep-rooted corruption in the property and financial industries that has been happening over many years.

Among leases signed by the department were controversial leases for SAPS headquarters buildings in Pretoria and Durban.

In an investigation into disgraced suspended police chief Bheki Cele’s involvement in the SAPS leasing saga, Judge Jakes Moloi found Cele to have a “questionable relationship” with Roux Shabangu, the property baron who owned, among others, Pretoria’s Middestad building earmarked as a regional headquarters for the police.


The department will soon face off with Shabangu in the Pretoria High Court in an attempt to have the R500 million SAPS Middestad lease deal declared null and void. (see page 2)

Nedbank is party to the case between the department and Shabangu, as they loaned him the R248 million he needed to purchase the Middestad building.

Fatyela was appointed as acting director-general this year and is expected to spearhead the department’s turnaround strategy announced by Public Works minister Thulas Nxesi in his budget vote speech last month.

“We know there is a lot of anxiety in the property industry about the public pronouncements by the minister on the review of the leases. We also know that there has been some collusion between certain banks and some landlords to conclude leases which are irregular,” she said.

“We are shaking up a very powerful industry and we are expecting them to fight back.”

She said the property and financial industries were working hand-in-hand to contest the department’s efforts to clean up the irregularities that had characterised many of the department’s leases.

“You cannot run a property business that is based on corruption, where the costs of leases are inflated because somebody needs to benefit from under the table,” Fatyela-Lindie told the Pretoria News.

“This is a very powerful industry that we are taking on and we know that they are gearing up for us because we are coming close to uncovering a lot of corruption

“Those who do not want to be exposed will be running to the media making all sorts of claims about not being paid.

“What they will not be declaring is that they do not even have valid contracts with the department; they have been benefiting from collusion with corrupt public works officials,” said Fatyela-Lindie.

About 27 irregular leases in the Joburg regional office had already been identified, believed to be worth about R64m.

The Pretoria regional offices was also being investigated with the help of the Special Investigations Unit (SIU), with Fatyela-Lindie claiming they had identified very expensive leases where landlords did not even have a contract to show why they were being paid.

The leases under review included the 1 227 SAPS leases the department has entered into to house police stations and regional offices for the police.

She said poor financial management and financial skills had led to the department receiving a disclaimer in the last financial year, with an amount of about R2bn not being accounted for.

“What has been happening at public works is embarrassing. This R2bn is not money that has gone missing but money that the department paid on behalf of our clients (government departments) who have not paid us back.

“Our results in the last financial year were the worst, that is why we released our CFO. We are looking at the next A-G report to have significant improvements,” she said.

She also admitted that inconsistency in the political leadership of the department had had a negative impact on the department, as it also impacted on the directors-general and senior managers.

Nxesi is the third minister for the department over the last three years, while Fatyela-Lindie herself is the fifth D-G or acting D-G over the same period.

“It creates anxiety within the department and the changes in political leadership result in serious policy delays. We need to move to a point in this country where the political changes do not affect continuity in departments – a point where the removal of a minister does not necessarily impact on a director-general who is a public servant.

“This is one of the critical factors that has hit this department really hard. Departments with stability do not have major problems,” said Fatyela-Lindie.

mogomotsi.magome@inl.co.za