City says office block lease all about location

Brian Hayward

THE Nelson Mandela Bay Municipality has defended its decision to renew the multimillion-rand lease of floor space in property magnate Yossuf Jeeva’s Kwantu Towers block next to the City Hall without first putting it out to tender.

The municipality decided last month to depart from provisions of the municipal supply chain management policy – normally only deviated from in extreme circumstances – and renew the lease until the 2011/12 financial year.

The lease of the five floors is costing the city R1.25-million for the 2009/10 financial year, R1.38- million for 2010/11 and R1.5-million for 2011/12.

The DA has also said it will look into the policy deviation.

But municipal spokesman Kupido Baron said “proximity” was the reason for the deviation.

“It is important to note that location is taken into consideration when considering a deviation from the supply chain management process in general,” he said.

“A good comparison is the Murray and Roberts building.

“We do not go out to tender for its lease as the relocation costs would just be far too high. (Its) accommodation is related to proximity (to the City Hall).”

But other landowners have decried the “reckless spending”.

The Herald has learnt that a nearby Denton Group-owned building, Traduna House in Jetty Street, has vacant floors available and would cost – for a similar floor space – “under R100000 to rent”, according to the group.

An angry businessman, who asked not to be named because of other dealings with the city, said: “At the end of the day, the ratepayer is footing the bill. This instance is just one case (of policy deviation) which we know about.”