The R28.1 million would be used by the city to develop the stand, after which eThekwini would sell the land to a private company to build housing. (file photo)
The sale of government property worth R21 000 to a private developer for R9.5 million is part of a Special Investigations Unit (SIU) corruption investigation into a Durban housing project aimed at benefiting low- and middle-income households. It was a department.
On Wednesday, SIU Chief Operating Officer Leonard Lekgetoe said in a presentation to Parliament's Standing Committee on Public Accounts that eThekwini Municipality will transfer land to private developers for social housing in a R28.1-million project. , detailed how they failed to monitor the project. .
The R28.1 million would be used by the city to develop the stand, after which eThekwini would sell the land to a private company to build housing.
Mr Lekgeso said the SIU had applied to the special tribunal to recover the R28.1 million lost in March.
“We are currently awaiting further court proceedings.” [the money]” said Lekgeso.
The housing project is related to a 2000 City Council resolution to make 29 municipal stands, some with service and others without service, available in the Phoenix area of the city.
Through an open tender process to build homes for low-income households with incomes below R3,500, who make up 25% of beneficiaries, and between R3,501 and R5,000 for middle-income households, who make up 75% of beneficiaries. Three developers were sourced.
Mr Lekgeso said the unit's investigation found that 29 sites had been set aside for construction work because “irregularly appointed” companies had sold state-owned land for inflated profits instead of building needed housing. He said it turned out that it had not been carried out.
He added that the National Prosecuting Authority had recommended that 20 employees, including the company's director and four eThekwini employees, be indicted and city officials be disciplined.
Nosipho Jama, the SIU's head of investigation in KwaZulu-Natal, said supply chain management processes were not followed on the project.
“Before the site was assigned, [to the three winning bids]one developer did not follow proper processes and was replaced by another developer who was not appointed through SCM. [supply-chain management] process,” she told a parliamentary standing committee.
Mr Jama added that the city sold the serviced stands in Phoenix to developers for “R30,000 each”, while the unserviced stands would have cost around “R100,000 each”.
“But what we found in Phoenix was that developers were developing and selling sites, and they were making money in terms of profits,” she said.
She cited the example that during a visit to the stand, she discovered the SIU had been sold to a developer for R34,000, including VAT, and that the company had sold the land for R500,000 in an act of “corruption.” listed as. .
“There was one site that sold.” [to a developer] It was sold for R21,000 but sold for R9.5 million. There was a tendency like that. [are] Other examples [of] Where they were profiting.
“The problem is that the municipality was unable to monitor and evaluate the activities of developers,” Jama added.
In response to questions from MPs, Lekgeso said these companies have since been blacklisted in the Treasury Department's central supplier database, “meaning these companies will no longer provide services to other government agencies.” said.
He added that the SIU could not yet reveal the developer's name as the companies involved were given the right of reply, saying: “That process is currently underway.”
“At our next meeting, you will be able to:” [give names of companies]Especially the names where the investigation has been concluded and gives the public the right to respond,” Lekgeso said.
