The Department of Public Works is moving to cancel the 65-year lease of Fernwood, Parliament’s former sports club, which it awarded to a black empowerment consortium for R35-million eight years ago.
The 16ha estate, which is part of businessman Tokyo Sexwale’s Mvelaphanda Properties (Mvelaprop) portfolio, remains undeveloped.
Public Works said the failure to meet the tender condition to obtain development approvals — environmental and rezoning/planning — by the April 30 2004 deadline meant the property could now be used by the department.
There is speculation that the department wants to establish a ministerial residential complex at the property in Newlands, one of the Mother City’s prestigious leafy suburbs. However, public works spokesperson Thami Ngidi said future plans would be announced “in due course”; they would first have to be approved by Cabinet.
Mvelaprop has sought legal advice on its position. It has obtained the required environmental impact assessment approval, one of the two necessary authorisations, said a representative, who confirmed that planning permission remained outstanding.
Without the nod of the Cape Town council, the consortium’s development of private residences at Fernwood cannot go ahead — even if plans are still on the table.
“We are still hoping for an amicable resolution,” said Mvelaprop director Anton Chait.
The move to cancel the lease is yet another twist in the years-long saga of Fernwood. The granting of a long lease, rather than an outright sale has in recent years been repeatedly criticised in parliamentary committees.
In 1996 then public works minister Jeff Radebe put Fernwood on tender because of rapidly increasing maintenance costs to government. In 1997 it was awarded to a consortium of Newport Property Group, Ebsevco and Luthuli Development. Years after the tender agreement, Mvelaprop acquired Newport’s interests in the consortium — and thus in Fernwood.
Fernwood was donated to the state in 1902. Since 1994 the African National Congress chief whip had hosted the traditional opening of Parliament banquet. Last year festivities moved to the Cape Town International Convention Centre.
The wrangle over Fernwood comes as forensic auditors this week completed their investigation into another controversial Cape Town land deal: the award by council of substantially discounted land at Big Bay, Bloubergstrand, to 17 handpicked black economic empowerment companies. Two of the beneficiaries have strong links with the African National Congress Youth League and the Western Cape ANC.
The two, ANC Youth League members Lunga Ncwana and Sharif Pandor, husband of Minister of Education Naledi Pandor, have previously been involved in multi-million rand Cape property deals.
Mayor NomaIndia Mfeketo this week promised that the forensic audit report, its findings and “corrective steps, if any” would be made public early next week. The period for public comment and objection ends on Monday.
Property development at Big Bay first came under scrutiny after the Cape Town council awarded the beachfront section to Jonga Entabeni Consortium, another property acquisition spearheaded by Sexwale, even though its R115-million bid fell below those of rivals.
Following appeals against the Big Bay deal, an independent tender review body upheld the decision in August 2004.
But rumours have persisted that the land will simply be sold on. Mvelaprop has denied this, with a representative pointing out that the agreement with the council contains a ban on selling the land.
Site development is under way and construction is due to start in the second half of 2005, “as soon as the consortium takes transfer from the city”, the representative added.