How the Eastern Cape blew R23m on land it could never own

The Eastern Cape government has paid a vastly inflated sum for land earmarked for a housing development — which was never built — despite the fact that a rural community had already lodged a land claim for what it says is its ancestral land. 

The saga began in January 2013 when the provincial government paid more than R22.9-million to purchase a 28-hectare piece of land on the outskirts of Qonce (formerly King William’s Town) with mooted plans to build houses and related infrastructure on it. 

Several sources, who asked to remain anonymous, have alleged that the purchase price was grossly inflated. A property search conducted by the Mail & Guardian shows that the previous owners of the land, Cosmic Gold Trading, paid R783 000 in 2007 for the property, known as Erf 2700. 

In August 2017, the former provincial human settlements MEC Helen Sauls-August confirmed that the Eastern Cape government had purchased the land for more than R22.9-million in 2013. 

Sauls-August, who is currently the speaker in the Eastern Cape legislature, told the legislature then that the market value of the land was R20-million at the time of the purchase in 2013. However, the M&G investigation found that three years after erf 2700 was acquired, it was valued by the municipality at just over R2-million.

In her August 2017 legislature reply, Sauls-August confirmed that the housing development had failed, and that no plans were afoot to revive it. 

“The department granted two private developers, Moladi Building Communities and Camel Rock, permission to proceed with the development of Erf 2700 as a joint venture. Moladi withdrew from the proposed development and the project did not proceed,” Sauls-August replied. 

But, at the time the provincial government bought Erf 2700, the property was already under a land claim instituted in May 1995 by the late Reverend Benson Sokopo, on behalf of the community. In a July 2016 Government Gazette, public comments were opened before the rural development and land reform department could finalise its decision on whether the land claim would be successful or not. 

On one side of Masingatha lies a typical rural community, with resplendent green rolling hills and brightly coloured houses adorning the working-class village. 

The other side of Erf 2700 consists of the buzzing Qonce central business district, which includes a police station, sports grounds belonging to Dale College Boys’ High School and a Superspar precinct known as Nick’s Foods. 

Three years after the provincial government paid nearly R23-million for land that was in the process of being claimed, it reached out to companies to develop it for housing. Moladi was awarded the contract in July 2016, but pulled out in April 2017 after the company was allegedly forced by the former human settlements provincial head of department, Gaster Sharpley, to partner with the controversial company, Camel Rock, which had been embroiled in corruption allegations in the province. 

Moladi’s bid documents, which the M&G has seen, did not include Camel Rock, which had submitted an exact duplicate of Moladi’s tender with only a Camel Rock covering letter replacing Moladi’s. 

Sources said Moladi pulled out of the joint venture because of Camel Rock’s contentious past, and because Moladi had not chosen it as a partner. 

This is not the first time Sharpley and Camel Rock have partnered on a project that has been dogged by allegations of corruption.

In May, the M&G reported that Camel Rock and Sharpley’s department were implicated in a November 2013 treasury report, which found gross financial misconduct in R341-million that disappeared into thin air, despite it being earmarked for much-needed housing development in the Eastern Cape. 

The treasury’s report states that the only money it could track was R61-million that was paid to Camel Rock in the 2012-13 financial year for work that was not done. 

Of the R61-million, Camel Rock “illegally transferred” R4.8-million to “11 personal bank accounts, and some of which [was] used to buy a top-of-the-range Chevrolet Trailblazer”. 

The report further stated that “only a vacant piece of land” stood where the houses were meant to have been erected in East London. 

Sharpley was also implicated. He was found to have contravened several laws and regulations governing public finances in the distribution of the R341-million. 

Sharpley, who the report said should have been disciplined, was transferred to the KwaZulu-Natal public works department, where he has been on suspension since November last year for alleged corruption. 

Sources have accused Sharpley of being the brains behind the Masingatha housing development, as he was the provincial housing department’s accounting officer at the time of the “forced” joint venture. 

In a statement to the M&G on behalf of Moladi, director Camalynne Botes said: “It’s the most tragic thing to discover that there is no real compassion or sincerity in those spheres of government that have pledged to better the lives of so many people that survive on such promises.”

“If the only chance we are offered to contribute to South Africa is on such terms, then at the very least, we must be able withstand the lure of corruption at whatever the cost,” she said. 

No development has taken place since the provincial government spent almost R23-million, and the Masingatha community said they knew nothing about it. 

Lwandile Sicwetsha, Sauls-August’s spokesperson in the speaker’s office, said the former MEC would not respond to the M&G’s questions — about why the department flushed R23-million — because the speaker was no longer in that portfolio. 

Sharpley said he could not comment as the M&G’s questions related to the department of human settlements in the Eastern Cape, and the decisions he made there were in his capacity as accounting officer.

“I have no right to respond outside of that official capacity. It is therefore only right that I allow the formal communication protocol to be followed.”

Several high-ranking sources, who spoke to the M&G on condition of anonymity, alleged that the price the provincial government paid for the Masingatha land was “highly inflated”, and was supposedly purchased to push “a corrupt housing development”. 

The sources’ allegations seem to be supported by the valuation documents.  

On 7 September 2016, the Buffalo City Metropolitan Municipality, under which Masingatha falls, had valued the land at just over R2-million. On the same day, the South African Property Transfer Guide appraised the land at just under R1.9-million. 

Nicks Foods Superspar in King Williams Town in the Amathole district is built on land that belongs to the people of the Masingitha village. (Andy Mkosi)

“I am certain that the market-related value of the land parcel had not decreased by 962% within a three-year period from R20-million in 2013, when the provincial government bought the land, to R2-million when the Masingatha community’s land claim was deemed successful,” said a source, who asked to remain anonymous. 

Tabisa Poswa, the current human settlements head of department, refuted claims that the purchase price was inflated. Poswa said the R22.9-million was based on “a quality property evaluator”, saying the price of Erf 2700 was comparable with the three land parcels adjacent to it. 

She also dismissed allegations that the provincial department blew millions of rand because the housing development had stalled since the awarding of contract in 2016. 

“The department has already started the process of the development of the land in question, wherein the process of expression of interest was finalised. However, the appointed service provider was stopped at the planning stage due to [a] land claim instituted against the property,” she said. 

“The department disagrees that the money was blown as the land is an investment registered under the provincial government of the Eastern Cape and land property does not depreciate. As soon as the land claim is resolved by the department of rural development and land reform, the [provincial housing] department will continue with the development as planned,” Poswa added. 

However, the land claim was finalised by the national government, and the Masingatha community received more than R20.5-million in restitution in March 2017. 

When contacted for comment, Camel Rock director Thanduxolo Zuka responded by sending the M&G a list of questions in turn, including about source documents and who gave his company the R23-million project. 

When the M&G provided him the information, Zuka said: “I don’t have a comment on this issue; human settlements must deal with this matter.”

‘We wanted to reclaim our dignity’

Community fighter: Nokuzola Siwaphi helped the late Reverend Benson Sokopo in lodging the land claim in 1995. Seventy families shared R20.5-million after the claim was adjudicated in 2016. Photo: Andy Mkosi

“My son, until you came here to our village, the Masingatha community did not know that the Eastern Cape government wanted to steal our ancestral land from us.” 

This was the assertion made by the 64-year-old Nokuzola Siwaphi, a leader of the Eastern Cape’s Masingatha village, whose ancestral land was sold to private developers by the provincial government for almost R23-million in January 2013 while the community had lodged a land claim for it in 1995.

The claim followed the forced removals of families from their land that was begun in the early 1960s by the apartheid regime. 

Siwaphi, dressed in the colourful attire that is synonymous with elderly rural women, revelled in regaling the Mail & Guardian with stories of how she worked alongside the late Reverend Benson Sokopo when the community launched its bid to reclaim what the leader said was its dignity. Sokopo died in March last year.
“I was Mr Sokopo’s secretary. When he lodged the original claim in 1995, he did so with us as members of the elected committee to fight for the community. We wanted to reclaim our dignity and the Masingatha land, which was stolen from us during the days of oppression. 

“During the application process, monetary restitution was suggested instead of us receiving our land back,” Siwaphi said. 

She added that the community collectively decided to accept monetary compensation for their stolen property because it would have been arduous, Siwaphi contended, to fight for land that already had so much development on it. 

An internal Eastern Cape restitution report, which the M&G has seen, showed that the Masingatha community received more than R20.5-million in compensation. Siwaphi said the money was shared among nearly 70 families. 

“The money helped us a lot. People were able to build or renovate their houses on their properties with that money. 

“The money also helped me to achieve and build things for my family that I did not think I would ever achieve,” she said. 

In an August 2017 written response to the Eastern Cape legislature, former human settlements MEC Helen Sauls-August said the Masingatha land was zoned for agricultural purposes, but that no farming was taking place on it. — Khaya Koko

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Khaya Koko
Khaya Koko is a journalist with a penchant for reading through legal documents braving the ravages of cold court benches to expose the crooked. He writes about social justice and human-interest stories. Most importantly, he is a card-carrying member of the Mighty Orlando Pirates.

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