Oh, what a waste!

Brian Hayward

THE Nelson Mandela Bay Municipality has renewed a multimillion rand lease of two floors of property magnate Yossuf Jeeva’s Kwantu Towers block next to the City Hall, despite available office space in municipally owned Algoa House a stone’s throw away.

Not only was the lease of the plush two floors which house the city’s communications department recently renewed retrospectively for 2009/10 – which means the lease at one stage lapsed – and for 2011/12, but it did not go out to tender.

Despite an outcry over the “wasteful expenditure of municipal funds” from the SACP and the DA, the municipality says there was an “exceptional case” for it to deviate from its supply chain management policy and renew the lease, which the policy makes provision for.

But estate agents have revealed that if the communications department just looked out its windows, it would find similar office space for up to half the R82/m² monthly rate – or R1.39-million for 2010/11 for 1410m², or two floors – which Jeeva is charging.

In total, the city leases five floors of Kwantu Towers, including economic development and tourism on levels three and four, communications on five and six, with the seventh floor occupied by municipal urban renewal arm the Mandela Bay Development Agency. (MBDA). Each department’s lease is negotiated separately.

In a rare show of unity, both the South African Communist Party and the DA have slammed the “wasteful expenditure”.

“We have always stressed concern over resources and public funds which are wasted at the expense of service delivery,” said SACP district secretary Zukile Jodwana, adding the interests of the community needed to be protected.

“It’s a concern for us that the person who benefited from that sale (Jeeva, who bought Kwantu Towers in 2002 for a reported R2.5-million from Norwich Union) is connected to a politician (former mayor and ANC regional executive council chairman Nceba Faku).

“We are opposed to individuals benefiting from business deals because of their connection to politicians.”

DA caucus leader Leon de Villiers said the party was concerned over the deviation from the supply chain policy.

“We fail to understand why competitive quotes could not be obtained as there appears to be a surplus amount of office space available in this city. Furthermore, we question why the municipality could not make use of the available space in Algoa House,” he said, adding the party would call for investigations into the issue.

A visit to Algoa House this week by The Herald found that although the floors were partially occupied, plenty of office space was in fact available and possibly able to house most, if not all, of the 30-odd communications employees stationed in Kwantu Towers.

According to senior municipal officials, speaking on condition of anonymity, communications chief Roland Williams, who occupies a luxurious, spacious office on the sixth floor of Kwantu Towers with a view of the Baakens River mouth, has previously refused to move to the older, cramped office space within the six-storey Algoa House, across the road in Chapel Street.

According to the officials, Williams simply dug his heels in when asked by municipal manager Graham Richards – currently on special leave – and chief operations officer Dr Israel Tsatsire several years ago to move to Algoa House to maximise use of municipal property and curb excess expenditure.

Williams has denied the allegations, claiming he was happy to move, but that the decision had later been overturned “by my superiors” and “was never in my hands”.

“My opinion, if I had been asked, would have been to stay and not move to smaller offices (in Algoa House),” said Williams, who gave The Herald a tour of the spacious offices.

Modern furnishings adorn the spacious reception area, while Williams’s office has a large, boardroom-sized dark wood table, in addition to his personal work area. Up to 20 staff occupy the sixth floor, with a further 10 on the fifth, including city spokesmen Luncedo Njezula and Kupido Baron who have separate offices.

Municipal officials claim Williams, who in 2002 was hired by Faku, remains close to his former boss, who is regarded as one of the most powerful politicians in the region.

Faku in turn has close ties to Jeeva – they are said to be good friends – and during his term pushed for the roll-out of an automatic meter-reading system by Unique Mbane, a company owned mostly by Jeeva and his sons. A recent letter from acting municipal manager Elias Ntoba to Unique Mbane stated the city would be reviving the R150-million AMR contact, although last week the city claimed to still be “considering its options”.

Last week, spokesman Kupido Baron claimed “proximity” was the reason behind the municipality deviating from its supply chain policy to renew the lease, which accrues at 10% – double the consumer price inflation rate for June of 4.2% – annually, from R1.25-million for 2009/10 to R1.51-million for 2011/12.

But South African Local Government Association experts told The Herald they had not heard of such a reason for deviation used before.

On Tuesday, Williams said the cost of moving his department was in fact the reason for the deviation, as it would amount to more than any savings from moving. “We are confident the processes in place (regarding the deviation from the policy) have been adhered to,” he said, adding the deviation was not unique and had also been used in the case of municipal office space in the Murray and Roberts building further down Govan Mbeki Avenue.

Jeeva and Faku did not respond to requests to comment on the issue.