R241,5-million bill to close Gateway agent

The National Department of Housing has guaranteed Thubelisha Homes, a technically insolvent government housing agent, R241,5-million to help it close down “on a voluntary basis”, a confidential letter leaked to the Mail & Guardian reveals.

Thubelisha was the implementing agent of Cape Town’s disastrous N2 Gateway project. Starved of funding by the national government, which provided only R294,6-million of the R2,3-billion budget, it built only 821 units of a planned 22 000 in the pilot stage.

Mandated to implement low-cost housing countrywide Thubelisha had targeted a profit of R49,5-million and made a loss of R67,5-million.

In a letter to John Duarte, the acting executive officer of Thubelisha, written in March this year, housing director general Itumeleng Kotsoane guaranteed R241,5-million to shut the company down: “We have reviewed the closure cost estimates and confirm the commitment of the national Department of Housing to provide the funding required for closing Thubelisha on a voluntary basis, based on the estimated closure cost of R241,5-million.”

Kotsoane and the Housing Department did not answer the M&G‘s questions this week. In an interview, Duarte — husband of Jessie Duarte, chief operating officer in President Jacob Zuma’s office — confirmed the R241,5-million guarantee to close the company.

Duarte was brought in two years ago to manage Thubelisha’s closure. Without guaranteed funding, he said, he could not have proceeded.

“Thubelisha had leased office premises and there are still three years left on some of the leases and equipment. Liquidation could be messy, as the idea was to transfer the operation’s projects to the government’s new housing development agency.”

Parliament’s watchdog committee, the standing committee on public accounts, visited the project last week to see whether structural defects highlighted by the auditor general had been dealt with.

The members found collapsed plumbing and walls and exposed electrical cables. The housing development agency would handle repairs to the Gateway flats, Duarte said. Thubelisha has only 10 staff members left.

Western Cape Premier Helen Zille said the project’s progress was being delayed by Thubelisha’s “collapse”.

“It owes substantial amounts to building contractors but has not been able to pay them because it does not have the [paperwork] required in law for payments to be made by provincial government,” said Zille.

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