Nkandla: Jacob Zuma's R800 rent deal

2013-06-09 14:00

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We reveal that the president pays a ‘modest’ monthly lease for the land on which his R206 million compound in Nkandla is built

President Jacob Zuma has secured a “modest” R800 per month rent deal for the land on which his more than R200 million Nkandla compound is built.

And new evidence shows the frantic “fast-tracking” of work on Nkandla and how millions of taxpayer rands were spent even before a legal contract for the land was secured.

City Press this week obtained ­details of the leases for Zuma’s Nkandla homestead through access to information legislation.

The documents reveal that:

» The president pays R800 a month for the 8.9ha of land on which his sprawling complex is situated;

» Zuma’s lease is for 40 years with an option to renew;

» Public Works pays R1 300 a month for the 6.6ha it has leased adjacent to the president’s homestead;

» A letter from a Public Works official in which the Ingonyama Trust – which owns the land – was given less than a day to agree to a “permission to occupy”; and

» Images attached to the lease application show substantial security ­upgrades – including two large perimeter fences – had already been completed at the time the department and the president applied for leases.

At the same time, it has emerged that Public Protector Thuli Madonsela was currently mulling whether to keep a report into Zuma’s Nkandla home secret or not.

A source close to the investigation said Madonsela was under pressure not to release the report publicly “because it could have far-reaching implications”, but Madonsela denied this.

She told City Press through her spokesperson Kgalalelo Masibi: “The security aspect of the report has to be dealt with sensitively. The Public Protector has not yet made a decision on how she would go about it.”

Madonsela derives powers under section 8 of the Public Protector Act.

If she considers the whole report or some aspects of the report confidential, she will then submit it to the Speaker of Parliament to determine which committee must consider the report.

Parliament recently decided that the Public Works department’s report into Nkandlagate should be tabled before the joint standing committee on intelligence, which makes it secret.

The DA is currently challenging the classification of the report by Public Works Minister Thulas Nxesi.

The Nkandla rental is described by the Ingonyama Trust itself as a “modest rental for the initial period of at least ten years”.

A property expert told City Press that Zuma’s lease was probably market-related for rural, tribal land, but still half of what Nkandla villagers would pay.

Although views are divided on whether the deal is fair or not, the president’s monthly rental for the rural estate is, for example, less than half the rental price of a Wendy House in a Cape Town suburb advertised this week.

Henk Smith of the Legal Resources Centre said the Ingonyama Trust ought to have followed the same procedure for Zuma’s homestead development as it did for mining companies and other developers.

This would require an accounting of the number of jobs created in return for alienating tribal land from the community, and an elaborate procedure under interim land rights legislation.

“The president is no different than any other private developer. How is his development different from a luxury lodge development? A community can decide that he pays a lot more for that land, because it has been alienated from the rest of the community permanently,” he said.

But Bonani Loliwe from the Border Rural Community said it was unusual for residents to pay rent on communal land.

Usually only commercial ventures would pay rent or offer compensation to the local community.

The signed lease agreement from Public Works only arrived back with the Ingonyama Trust this week despite being dated February 1 2011 and with some R206 million of taxpayers money already spent on the property.

Zuma’s 40-year lease, with the option to renew, also came into effect on February 1 2011, although it is not clear whether he has actually signed the contract yet.

His initial rent was R8 000 a year – about R670 a month – with a 10% annual escalation, putting his current rent at less than R800 a month.

The Public Works department said in correspondence as part of the lease arrangement that it would build staff accommodation and security installations on the land it had leased.

The scramble to fast-track the Nkandla project came after the department authorised funding for it in June 2010.

A letter to the trust by a Public Works prestige project official, dated September 15 2010, demanded “fast-track processes” and asked for “principal approval” by the close of the same day the letter was sent.

The details of the lease raise more questions about the financial arrangements around the Nkandla property.

Sources at the Ingonyama Trust have previously told City Press that banks do not grant bonds on trust-owned land without a lease in place.

Yet documents handed in at the fraud and corruption trial of Zuma’s former financial adviser, Schabir Shaik, show First National Bank granting a R900 000 bond on the strength of permission from the local chiefs to occupy the land in 2002.

A “traditional council consent” approving Zuma's “rights to land” and which are part of the lease documents is dated October 2010.

Public Works and the presidency did not respond to requests for comment.

» Madonsela told eNCA about three weeks ago that her report was “95% complete” and that she was still waiting for crucial documents, but she refused to say who was withholding the information.

Masibi told City Press the investigation was “at an advanced stage”.

Public Works Deputy Minister Jeremy Cronin this week told Parliament his department's investigation into the Nkandla upgrade found it was “riddled with anomalies”.

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