PMB’s lease scandal

2011-07-26 00:00

TRIZON Towers, Pietermaritzburg’s own government building lease scandal, is back in the spotlight.

Since 2006 there has been criticism over a multi-million-rand rental contract that saw the building leased to the then cash-strapped KwaZulu-Natal Health Department. Now part of the office space that has never been fully utilised may be used by the KZN Human Settlements Department.

The Witness has learnt that a section of Human Settlements currently housed at the former House of Delegates building on the Esplanade in Durban is relocating to Trizon Towers. Sources say the staff are expected to move in shortly.

Some were expecting the move to take place last month, but this did not happen.

When contacted, the KZN Public Works Department (PWD), which manages the leasing of office space for government departments, did not confirm or deny that Human Settlements is moving to Trizon Towers. In a written response to The Witness, the PWD said Human Settlements has asked the department to find it suitable office space, but that the process has not been finalised.

More than a year after the request was made the PWD has not completed the process.

In 2010 two tenders for office accommodation in Pietermaritzburg for Human Settlements were advertised in the government tender bulletin, and then cancelled.

Bidders who applied said they were offered no explanation for the cancellation of the bids. They also query the waste of money in advertising then cancelling bids.

The first tender advertised on August 20, 2010, asked for a lett-able area sufficient to accommodate 1 872 square metres of assignable space plus a maximum of 30% of non-assignable space and 60 secure undercover parking bays. This was cancelled. A second bid advertised on November 5, 2010, asked for increased office space of 8 418 square metres with 150 secure undercover parking bays plus 200 open parking bays.

This was also cancelled.

Confused bidders wondered why the cancellations had occurred until they heard that Human Settlements is moving to Trizon Towers.

The National Education Health and Allied Workers’ Union (Nehawu) says the fact that more than five years after the Health Department first took over the building there is still office space available to house another department vindicates its call for an investigation.

Nehawu regional secretary Khaye Nkwanyana said the Health Department signed a multi-million-rand contract for a building it did not need and was never going to fully utilise. Nkwanyana said the union had never stopped its call for the lease to be fully investigated and as far back as 2008 the provincial government undertook to see that this was done.

Details of the controversial deal first appeared in the City Press in 2008 in an article headlined “Broke KZN Health in shady R2,5 million-a-month rental deal”.

Nkwanyana said at the time that it was one of the most costly rental agreements in the city and in the two years since the lease was signed the Health Department had already paid over R50 million in rent — enough for the department to put up its own building.

The agreement was also described as irregular because leases are normally signed for a five-year period. In this case a 15-year lease agreement was signed, which ends on August 30, 2016 with an option of another five-year renewal.

In the article the union also alleged that senior government officials may be shareholders in the building and questioned why the cash-strapped Health Department had leased another building when it already had adequate office space. The lease agreement was signed by former head of department Dr Busi Nyembezi and Trizon owners Square Peg Properties.

Frustrated bidders have joined Nehawu’s call for the investigation into the Trizon Towers lease.

They believe that in the latest situation two advertised bids were cancelled in favour of Trizon Towers to allow for the controversial lease to be extended.

The bidders allege that this is because a senior official in the PWD who manages leases and rentals has a brother who has business links with one of the owners of Trizon Towers. The brother is a partner in another property company with the owner. The Witness provided details of the allegation to the PWD, including the names of the people at the centre of the allegation.

A spokesperson for the PWD, Sureshinee Govender, said the allegation concerning one of its officials has been noted. “We would appreciate information on this as it will assist the department to investigate the matter further,” she said.

The PWD did not respond to another Witness e-mail that questioned why the two tenders looking for rental accommodation for Human Settlements were cancelled and why the process was taking so long.

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