Govt’s huge rental sinkhole

2014-12-02 00:00

GOVERNMENT departments may face a broad audit over their R280 million a year collective rental spend.

This after the political opposition cried foul over the office space leased for 15 departments, which costs the ­taxpayer R23 million every month.

The Department of Health alone dents the public coffers by nearly R6 million, followed closely by the Department of Education, which peaks at nearly R5 million. According to disclosures made by the Department of Public Works in response to parliamentary questions submitted by the Democratic Alliance, the two departments hold 84 of the 179 leases currently in place.

The Department of Health also has the most expensive rental property on the books, with a building in Pietermaritzburg costing nearly R1,5 million per month. The DA has now demanded all existing lease agreements go under ­review and that the ANC-led executive look to purchase buildings instead of renting indefinitely.

The call comes after R600 million funding for a government office park was approved by the Provincial Treasury in March, a move the DA says will be the death knell for the Pietermaritzburg city centre.

DA finance spokesperson Francois Rodgers said the tab for office rental should be investigated.

“Whether the rentals being charged are market-related and whether the offices are being efficiently used is also questionable, and we will be calling for a full audit of property leases to establish whether the provincial government is getting value for its money,” he said.

“The amount of money being shelled out on renting office space is extremely disturbing. We strongly believe that while it may mean spending money ­initially, KZN’s ANC leadership must look into purchasing buildings outright, in particular in the capital city.”

Rodgers said that a move to a new government precinct would herald the death of the central business district.

“Research shows that the decentralisation of businesses and others exacerbates social development, increasing the gap between rich and poor. The legislature and its many employees are the life-blood of Pietermaritzburg’s central business district and building a ­monument to the ANC in the form of a new precinct on the outskirts of town is definitely not the answer,” he said.

Human Settlements and Public Works MEC Ravigasen Pillay said he was convinced market forces “will contribute to inner city renewal, as indeed is already happening in parts of Johannesburg and Durban. Working with the city, we will make our contribution.”

But Pillay insisted his department would not be “held to ransom by ­property cartels”. “It is well known that the bulk of the Pietermaritzburg premises are owned by a handful of landlords. The prospect of a government precinct is not in their interests and would bring down rentals radically.”

Pillay said the cost of “acquiring standard grade accommodation to replace the leased premises is estimated at ­approximately R10 billion”, and that maintenance costs and property rates added to the total. “This is not feasible.”

• Contact Jeff Wicks at 082 073 8565.

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