Public Works to nullify 22 irregular leases – minister

2012-05-08 14:22

The Department of Public Works will approach the high court to nullify 22 irregular leases, Minister Thulas Nxesi has said.

Nxesi, who took over from axed former minister Gwen Mahlangu-Nkabinde late last year, said his embattled department paid R64 million in rent for the 22 buildings which had leases with the department.

He blamed poor management, incapacity and a lack of financial controls for providing a “fertile” ground for the increase in corrupt and fraudulent activities in his department.

Nxesi was addressing the media ahead of his budget vote in Parliament today where he lambasted department officials for letting the leases situation get out of hand.

“We are stopping the bleeding,” said Nxesi.

He also announced certain aspects of his turn-around strategy for the department and thanked the Special Investigating Unit for uprooting corruption within the department.

Nxesi, who said leases were draining public resources, said with the help of the SIU and the public protector the department had been able to identify problem areas.

“There is no quick wins with leases. We are coming from a dark place characterised by corruption and mismanagement – evidenced by 8 years of qualified audits, topped off by a disclaimer in the previous audit,” said Nxesi in reference to his department’s review of about 3 000 leases worth more than R3 billion a year.

The review would take up to 12 months to complete, said Nxesi.

He said half of the leases managed by the department – approximately 1 277 – were SAPS leases for police stations.

Nxesi said soon after his appointment he removed various financial delegations from officials in provinces including his managers’ powers to sign all leases.

“Twenty two such leases have already been identified in one region alone involving payments of over R64 million.

“This includes leases where the department paid for the duration of the lease without the building being occupied.

“We have instructed our lawyers to approach the High Court to nullify these irregular lease agreements and institute civil action against whoever unduly benefited,” said Nxesi.

He apologised to landlords for the inconvenience caused by his department’s review of leases.

Criminal cases would be instituted against some senior department officials, said Nxesi, adding that arrests were imminent in investigations which have been concluded.

The 22 new leases come hot on the heels of the botched SAPS lease agreement with property mogul Roux Shabangu which is already being contested in court.

It is believed that the department will refer more similar cases to the courts to get the lease agreements nullified.

“As far as the much-publicised SAPS lease is concerned the department launched an application to the high court to declare this lease agreement invalid.

“The matter is now before the court for adjudication,” said Nxesi who was accompanied by his acting director-general Mandisa Fatyela-Lindie.

Fatyela-Lindie is the department fifth DG or acting DG in the last three years.

Nxesi said costs of leases were “unsustainable” and “represent a drain on public resources which could be used productively elsewhere”.

He could not estimate the overall cost of irregular leases and added that there was money to buy rather than lease buildings in the long term.

“Certainly there’s money but buying your own buildings needs proper planning,” said Nxesi, adding that he has hired a task team of experts in the property industry to assist him in turning around the department.

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