City bidding war not so tender

2016-04-14 12:30
The polocrosse fields.

The polocrosse fields. (Google Earth)

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Pietermaritzburg - The Msunduzi Municipality’s planned sale of the old polocrosse fields may be the city’s biggest development for years to come, but the sale has become embroiled in claims of fraud.

The sale of the land, which went out to tender for buyers on March 10 will represent only a fraction of the money to be spent on the final development.

The Witness has reliably learnt that the shortlisted three bidding consortia have all proposed spectacular upmarket developments, including a 5-star hotel, conference centre, office parks, shops for upmarket global brands, and a range of other new urban planning propositions.

These investments, at current values, could range between R700 million to over R2 billion. “Think Sandton. This is the type of development being proposed,” said one city developer, who chose to remain anonymous.

The municipality is already knee-deep in investigations to weed out corruption and fraud in supply chain and tender irregularities.

Investigations by the Department of Co-Operative Governance and Traditional Affairs, the Hawks and Special Investigation Unit, follow the suspension of award-winning municipal manager Mxolisi Nkosi and municipal audit unit head Petrus Mahlaba.

But The Witness has now learned from several well-placed sources that the turmoil at the municipality may have its roots in the leading bidders on the polocrosse land, who want to get their bids approved.

The municipality would not disclose who the bidders are — Msunduzi spokesperson Nqobile Madonda said an announcement of the successful tender would only be made once it was awarded.

She said the adjudication process was proceeding according to plan. Other sources, however, claim the bid process has been dogged by controversy from the start, and that an announcement on the winning bid might be made as early as next week, or very soon thereafter.

One of the shortlisted consortiums includes Pietermaritzburg businessman Paris Dlamini, KZN billionaire Vivian Reddy of the Edison Group and Kugesh Naidoo, director of Pietermaritzburg accounting firm Dobeyn Accounting Solutions. Dlamini and the Edison Group confirmed they were among the bidders, but could comment no further.

Invesco Centre owner Kaveer Singh, in partnership with Willmeg Investments — the development wing of the Mattland Group, which owns property adjacent to Invesco Centre — are also among the bidders.

Singh confirmed their bid, but said they would have to wait for the bid adjudication process to finish before he could comment further.

Another major player believed to be among the bidders is a consortium comprising KZN property developer Robert Alexander and KSA Security owner Mahomed Yacoob.

However, Yacoob denied bidding for the land and being in a consortium with Alexander.

The Witness received, from three different sources, a claim that eight municipal employees and some politicians would, either directly or indirectly, become 85% shareholders of one of the leading bidders, a stake which would later be purchased from them once the property development begins.

One leading businessperson who made this claim wanted the Special Investigating Unit to intervene in the bidding process, to ensure the fairness of the outcome.

A letter leaked to The Witness, purportedly from a “concerned” municipal worker and addressed to Nkosi and Mayor Chris Ndlela, claimed that one of the bidders had fronted a black man as its major shareholder to achieve level 1 BEE status, and that once the award was made, a 20% stake would be given to the people who had helped sway the tender award process.

A number of sources claimed there had been a R5 million bribe from one consortium to a senior municipal official. The official has denied the claim, but said he could not comment further.

Although Alexander and Reddy are in different camps on the bids for the property, they are joint developers on another large project in KZN, the R3,1 billion mixed-use Oceans development in Umhlanga.

Reddy, Willmeg and Alexander are already named in a legal dispute regarding the leasing of a new property to the auditor-general of South Africa at Cascades.

According to court papers, Reddy’s company, Rainydays Farms, has attempted to interdict the auditor-general from executing a lease agreement on a property. This, according to sources, arose after Reddy and Alexander allegedly disagreed on who would manage the lease agreement.

The Msunduzi Municipality has tossed about proposals for the development of the 7,7 hectare polocrosse fields for nearly a decade now. The bids for the land are understood to have ranged from R58 million to R158 million. The bidding criteria were targeted to ensure that local developers, employing local people, with the best black empowerment credentials, stand the better chance of being successful in buying the land.

Read more on:    pietermaritzburg  |  fraud  |  development

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