THE troubled Eastern Cape Development Corporation (ECDC) has appointed Buhle Dlulane, who was serving in an acting capacity, as its new chief executive, in a bid to bring much-needed stability to the organisation. At the release of the company’s annual results at the corporation’s offices in East London yesterday, board chairman Nhlanganiso Dladla said the appointment came after a “shaky” two-year period.
Dlulane, who has been appointed on a three-year contract, has been acting ECDC head since January, seeing him presiding over a tough year in which the financier has been trying to get its house in order.
Dladla said recruitment for a chief executive started in January and, while in the process, the Treasury began its review of state entities that threatened to lengthen the ECDC’s bid to fill the vacancy.
“The board then took a decision in October that … we do need stability within the organisation,” Dladla said.
“So we moved on to an alternative process that would at least give us that assurance that over the next three years we have someone who is given the full authority to lead the operations of this organisation.”
Dlulane’s appointment comes 18 months after former chief executive Sitembele Mase was given his marching orders after being implicated in the Mandela funeral scandal, where the corporation reportedly paid R22.2-million for food and T-shirts from its social infrastructure budget.
With a new permanent chief executive and a relatively new board, the corporation is on a mission to do a major financial cleanup, in particular its properties and the wastage as a result of poor lease management.
The ECDC, which last year got its first qualified audit opinion since 2007, yesterday boasted that its balance sheet reflected assets exceeding liabilities by R1.1-billion, with more than R900-million being investment properties.
Despite this, the corporation is faced with a liquidity challenge as the bulk of this is tied up in its troubled properties division, where poor management and non-payment of rentals by tenants resulted in revenue losses.
It has sold off 19 vacant properties and is busy with the sale of 10 more, while a total of 120 properties valued at R86.2-million are being transferred to the current tenants.
The corporation is also processing offers to purchase the remaining units.
In the 2014-15 financial year, the ECDC approved and processed R95.6-million worth of loans to 261 enterprises and collected R141-million in repayments.
Of these, 60% were to businesses awarded contracts by the government – called Nexus loans – and nearly half went to enterprises in the construction sector.
About half the loans went to businesses in the rural part of the province, with Nelson Mandela Bay entrepreneurs accounting for R16.5-million, or 17% of loans.
“The loans bias towards regions such as Amathole, OR Tambo and Alfred Nzo is a clear indication of the ECDC’s resolve to support government’s efforts in ensuring that rural municipalities are developed to an extent that sustainable economic activity is created within these areas to slow down the pace of urbanisation in line with the provincial development plan,” Dlulane said.