Gauteng Education Department is dragged to court after World Cup business venture goes pear-shaped.
Thabo Mohlala
The Gauteng Department of Education (GDE) is facing a hefty lawsuit from Soweto Focus Point (SFP), a company formed to cash in on the FIFA World Cup euphoria, by investing funds to renovate classrooms and rent them to visiting soccer fans. SFP is demanding R126-million from the department because the demand for accommodation was not as high as they anticipated. Consequently the company suffered substantial financial losses.
But the GDE’s Charles Phahlane said it would fight the lawsuit as the matter is between the school governing bodies (SGBs) and the private company. Phahlane said the department discovered the arrangement in March this year but at no point did SFP formally raised the matter, let alone seek authorisation from the department’s accounting officer.
He said various sections of the South African Schools Act give school governing bodies authority to, among others, raise funds, administer and control their school’s properties and buildings and grounds occupied by the school.
And “section 60 of SASA places liability for the failure of a business venture in a school on the SGB of the school and not the state”. Phahlane said the Head of Department, Boy Ngobeni, had sent cautionary letters to district directors indicating that the GDE was against the idea of letting school facilities for this purpose.
“The truth of the matter is that SFP does not require or need permission from the department to run their project. Our only concern has been to ensure that SGBs are aware of the potential liabilities they could face through entering into such agreements and we warned them accordingly,” Phahlane said.
Asked why the SBGs ignored the department’s advice, Phahlane said it is not clear but it may have to do with the projected benefits that schools would derive by participating in the venture.
“From what we know the schools were promised that their classes would be renovated and that at the end of the Word Cup they would be paid R100 000 as compensation. This might have sounded too good to the SGBs,” said Phahlane. He said they are still investigating how many schools were involved and what liabilities have been incurred.