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Axe hangs over Shabangu's stalled Swaziland deals

AmaBhungane Reporters

Controversial property tycoon Roux Shabangu's plans to relaunch a diamond mine and build a shopping mall in Swaziland have failed to materialise.

Roux Shabangu.

Controversial South African property tycoon Roux Shabangu’s ambitious plans to relaunch a diamond mine and build a shopping mall in Swaziland have failed to materialise, prompting speculation that the collapse of his leasing deals with the South African Police Service has left him strapped for cash.

This week the principal secretary of Swaziland’s natural resources ministry, Thembinkosi Mamba, complained about Shabangu’s delay in starting the diamond project at Dvokolwako, near Manzini, and warned that the government might withdraw his mining permit.

In 2009 Shabangu flew to Mbabane by helicopter to negotiate with the Mbabane city council over a R1.5-billion mall complex that his company, Roux Property Development Africa, was planning to build on council land in central Mbabane.

He was accompanied by Swazi businessperson Thabo Magagula, who is said to have influence in royal circles. Asked this week whether the mall project was going ahead, Magagula said: “We don’t know at this point.”

Speaking to the Swazi media last October, Shabangu promised to deliver the project in early 2012 at the latest. The development would comprise a civic hall seating 2000 people, shops covering 47000m2, a 30000m2 office block and a hotel and casino on an 8000m2 plot.

Lack of transparency
There has been no progress on the project and a prominent local property developer, Walter Bennett, has complained about the lack of transparency over the deal.

Contacted this week, Bennett said he questioned the lease agreement because local businesses had been denied the opportunity to compete for the lucrative deal.

“We believe it should have been offered to institutional property investors in Swaziland, such as the Swaziland National Provident Fund and the Public Service Pension Fund, rather than an individual, given the magnitude of the development on prime land,” he said.

At a public hearing that formed part of an environmental impact assessment (EIA) in March last year, Shabangu’s South African business partner, Jason McCormick, said they had agreed to build the civic centre and new council offices in return for the land.
 
“The council decided against accepting cash because it wanted to retain something of sentimental value long after the project was complete,” McCormick said.

Proper valuation
But Bennett questioned this and called for a proper valuation of the land, which he suggested might be worth at least R100-million.

McCormick said at the meeting that a valuation had been carried out, but the land’s value had not been specified.

Mbabane council spokesperson Bon­gani Dlamini had not responded to questions by the time of going to press.

Bennett also said that the lack of progress on the mall project might stem from Shabangu’s highly publicised problems over the leasing of buildings in Pretoria and Durban to the SAPS. “On the face of it, the buildings he bought were intended to be repaid with revenue from the police. Maybe because the deal with the SAPS has been questioned he has no capacity to carry on with the development here.”

The public protector, Thuli Madon­sela, found that a lease agreement between Shabangu’s Roux Property Fund and the SAPS in respect of a building in Pretoria, potentially worth R521-million, was fatally flawed. A deal in respect of a Durban building, reportedly worth R1.1-billion, also miscarried.

Optimistic
Last week an official inquiry headed by a judge pronounced suspended national commissioner Bheki Cele unfit to hold public office because of the transactions, which have been suspended. 

Interviewed by the Swazi Observer in October last year, Shabangu said he was still waiting for a go-ahead from the council’s town planning department and pledged to start the project soon. “We are optimistic about getting approval next month. As soon as the approval gets through, serious work will begin,” he said.

However, a well-placed source in the municipality said there was nothing to indicate that the project was ready to continue.

“In fact, even the land issue has not been resolved at Cabinet level,” said the source. “After the EIA public scoping meeting, nothing has happened.”

A source at Dvokolwako diamond mine said the delay in relaunching the derelict mine had caused friction between the mining board and Swaziland’s minister of natural resources and energy, Princess Tsandzile. According to the source, the board, chaired by Winston Lomahoza, was refusing to take instructions from the minister to withdraw the mining licence issued to Shabangu’s Roux Mining.

Delaying operations
Mamba said there was concern about the delays. “We’ve instructed the board to talk to the investor to find out what is delaying operations.”

He said that, should Shabangu not have a good reason for failing to meet his agreement with the government on deadlines for launching the project, “the licence is likely to be withdrawn”.

Shabangu’s spokesperson, Percy Shabangu, said the businessman could not comment because he was overseas and too busy to answer questions.

Mamba said the Mail & Guardian’s other questions had to be directed to Lomahoza, who forwarded them to  the commissioner of mines, Aaron Vilakati. He did not respond to them.

The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.

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