Municipality mum on dealings with property magnate landlord

Brian Hayward

THE Nelson Mandela Bay Municipality has drawn a veil of secrecy around two high-profile business dealings between it and property magnate Yossuf Jeeva.

Repeated attempts by The Herald over the past two weeks to elicit clarity from communications head Roland Williams and his deputy, Kupido Baron, on the municipality’s involvement with Jeeva – namely its six-floor lease of his eight-storey Kwantu Towers block next to City Hall, and the mooted revival of the controversial R150-million automatic meter-reader (AMR) contract with his company, Unique Mbane – have been met by a wall of silence.

Jeeva, who is also Unique Mbane chief executive, has meanwhile insisted his AMR contract with the metro is still on, saying: “We shall implement the balance of the contract as soon as final logistical arrangements in this regard are settled with the city, and are confident that all will be done in full, in time.”

In essence, this would mean installing possibly hundreds of thousands of AMRs in households around the metro before Unique Mbane’s contract expires in about five months’ time. It also remains to be seen if, in the wake of the metro’s cash crisis and budget slashing, there is funding for the project.

The AMR contract was first raised by former Bay mayor and ANC regional executive committee chairman Nceba Faku – who is also widely said to be a friend of the Jeeva family – in the early 2000s, with about 300 AMRs installed in a 2006 pilot project by Unique Mbane. Their aim at the time was to read water and electricity meters remotely to save the metro money on errors occurring in manual readings.

On March 31, acting municipal manager Elias Ntoba e-mailed Unique Mbane, saying the municipality wished to honour the existing contract per initial tender until the date of termination, March 2011.

The metro later backtracked, with Baron saying in July: “The acting municipal manager is considering various technical reports and the direction of legal services prior to signing any contract.”

Any revival would also come in spite of Jeeva’s company, Africorp International, owing the metro millions in rates and services arrears, according to senior municipal officials. In July the amount was more than R11-million in a dispute spanning several years, with his Kwantu Towers block alone owing almost R2-million at July 31, according to recent replies by Ntoba to questions on Kwantu Towers posed by councillor Terry Herbst, which The Herald has seen.

The metro’s silence follows Unique Mbane’s absence at last month’s three-day national convention in Stellenbosch of the Association of Municipal Electrical Undertakings, which several Bay metro officials attended.

“All the metering players were there, but not Unique Mbane,” said an expert in the metering business who attended, but asked not to be named for fear of a fall-out with the company.

“Talk was that Unique Mbane didn’t attend because of cash problems, and that they were also being forced to remove their meters in the Bay because of technical problems.”

The Herald checked with the metro’s electrical department and an official, who was not permitted to talk to the media, confirmed that some of the AMRs installed during the pilot project had had to be removed because they were “problematic”.

Jeeva denied Unique Mbane was facing any sort of financial problems, saying: “We never intended attending this conference, because of prior commitments. We assure you we are in a sound financial position. The technical hiccups you refer to are a matter not related to our solution.”

According to infrastructure, engineering and energy committee member Andre Goosen (DA), metro officials had admitted at the previous committee meeting on September 3 that “the idea was not to go forward with it (the AMR deal)”.

“The committee has asked for a detailed report on the metro’s contractual agreement, which we expect to receive at our next meeting, later this month,” said Goosen, who initially asked for the AMR contract to be handed to the committee back in July. “Officials have reported to the committee that the pilot project had not been viable.”

In The Herald’s August exposé on wasteful municipal expenditure, opposition parties and tripartite alliance partners decried the “wasting of ratepayers’ money” with the metro’s renewal of its Kwantu Towers lease while there was office space available at nearby metro-owned buildings.

While the municipality has remained mum, replies from Ntoba to Herbst on the issue shine some light on the extent of the metro’s financial involvement with Jeeva. According to the replies, the metro signed the original lease with Jeeva in October 2005. Jeeva bought Kwantu Towers in 2002 for a reported R2.5-million.

According to Ntoba’s replies:

The six floors rented by the metro cost R368832 a month – or about R737664 per floor per annum.

Cost per square metre is R74.

The metro is responsible, over and above the rental, for water, electricity and sewerage.

Other private properties which are leased by the metro to house staff include Fidelity House, the Murray and Roberts Building, and Corner House.

It was further revealed that the metro’s 2010 directorate occupied the first floor from October 2008; the economic development and recreational services directorate has occupied the third and fourth floors since April 2006; the communications department has occupied the fifth and sixth floors since December 2005; and the Mandela Bay Development Agency (MBDA) has occupied the seventh floor since December 2004.

Jeeva said there was nothing unusual about the lease. “This (services) provision is quite normal between landlord and tenant,” he said.