Public Works Minister Gwen Mahlangu-Nkabinde has announced a six month moratorium on all new property deals to allow a clean-up operation in her department, the New Age newspaper reported on Monday.
The delay could stall business deals worth more than half a billion rands. It is currently estimated that the department concludes property lease deals valued at more than R1-billion annually, the paper said.
Mahlangu Nkabinde announced the moratorium on Friday while addressing the Property Sector Charter seminar in Sandton.
“We have asked all business to stop at public works for six months. We need to clean our house and give South Africa a better service,” she said.
“The process is not going to be handled by public works. We have asked experts to help us.”
She has been under pressure after Public Protector Thuli Madonsela ruled that her department mishandled the controversial R500-million lease deal for new police headquarters in Pretoria.
Another multimillion-rand lease
Meanwhile, the Mail & Guardian reported on June 3 that Roux Shabangu, the BEE business person at the centre of the police leasing scandal, was the proud recipient of another multimillion-rand state lease — for a building twice as large as the government required and way over its budget.
The R137-million, 10-year lease by the department of public works is for a Pretoria CBD building as the headquarters for the police department’s Independent Complaints Directorate (ICD).
According to the M&G‘s calculations, taxpayers have once again bought Shabangu a building the state itself could have bought for less.
In an interview Shabangu’s business partner, Japie van Niekerk, said Shabangu had bought the building because his political connections had told him the public works department wanted to lease it.
This claim was not answered by either Shabangu or the department.
Van Niekerk also stands to benefit because he lent Shabangu the money to buy the building.
Van Niekerk told the M&G that the lease, signed in April 2009, was Shabangu’s first foray into the lucrative state leasing business. It was a trial run for his controversial R500-million lease agreement for the new South African Police Service headquarters in Pretoria and a yet unconsummated R1.1-billion lease for the police in Durban. These were signed in July and November 2010, also with the department of public works.