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.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24


WATCH: Man films himself going down water slide upside down as things go very wrong…

What is at first an exciting tummy-turning adventure stunt, quickly turns into a scarily bad idea caught on camera. Take a look:


You won't want to miss...

WATCH: Conor McGregor: Notorious the trailer
Best date night restaurants in South Africa
WATCH: Ryan Reynolds offers fans a free tattoo in new Deadpool 2 teaser
Should you date your co-worker?
Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.