ICD stops paying rent for contentious HQ

2012-02-21 22:43

Cape Town - Police watchdog, the ICD, has stopped paying rent for its ill-suited Pretoria headquarters, pending the outcome of a public protector probe into the lease with Roux Shabangu's affiliates.

This was revealed by Independent Complaints Directorate director Francois Beukman when he briefed Parliament's portfolio committee on Tuesday.

He said police took legal advice in January to stop payment because if the lease were invalid, it would amount to a waste of taxpayer's money.

"The advice was given to us in terms of section 38 of the PFMA (Public Finance Management Act). If [the] lease is null and void it will be fruitless or wasteful expenditure."

However, it was still unclear whether the ICD could be held to the controversial 10-year contract the department of public works entered into on its behalf, Beukman said.

"It should not be regarded as a denial of liability."

He said he had asked national treasury to roll over the unpaid rent in case the ICD was unable to rescind the R10.6m a year deal for the property at 114 Vermeulen Street, which ICD staff still occupy.

The public protector and the special investigating unit began probing the contract in November, a year after the ICD moved into the building. It was double the required size and the rent far exceeded its budget for renting headquarters of R6.1m a year.

The debacle raised more questions about public works' relationship with property mogul Shabangu and the department's handling of leases signed on behalf of other state entities.

It is the third deal with Shabangu to be probed after those for police headquarters in Pretoria and Durban were declared unlawful. This prompted the sacking of public works minister Gwen Mahlangu-Nkabinde and the suspension of national police commissioner Bheki Cele.

Police management last week told MPs its leasing arrangements for more than 1 300 premises were in "a mess", and that police had been evicted from stations because public works had failed to pay the landlords.

The ICD detailed a similar litany of woes with some of the 16 properties leased for it at a cost of R21.5m a year, or 15% of its budget.

In the Eastern Cape, it occupies two buildings leased on a monthly basis because public works failed to timeously renew contracts that expired in 2010.

Likewise, in Bethlehem in the Free State, the ICD's lease expired in March 2011, but the department has yet to find it new offices.

Acting chief director of operations Matthews Sesoko said in addition staff in KwaZulu-Natal had been locked out of their parking spaces in a still unresolved rent dispute.

MPs demanded to know why ICD management had failed to intervene decisively when contracts were expiring, and why it had in some provinces allowed public works to sign leases for more than the ICD could afford.

ANC MP Annelise van Wyk warned: "Money you could have spent on staff is going on leases. It must have an effect on your operations and we are going to hold you responsible."

Committee chairperson Sindi Chikunga said it did not make sense for the state to continue renting buildings instead of building or buying them.

She noted that the City Forum building was reportedly bought by Japie van Niekerk - a business partner of Shabangu - for R59m - far less than the rental the ICD would pay over a decade.

But Seseko said the ICD's hands were tied. It did not have a mandate to buy property and had to rely on public works to procure rental properties and resolve problems that arose with these.

"The problem, I think, is systematic in public works. We are not empowered to do anything but raise these issues with them and then expect something to be done about it."

- SAPA