How the deals worked, and how the costs spiralled

2013-11-14 00:00

AN investigation by The Witness into businessman Jay Singh’s controversial construction deals criticised in a recent forensic report has established that:

• In 2005, Jay Singh’s son, Ravi Jagadasan, bought a massive parcel of land called Hammonds Farm, in Verulam, as director of Hazedew. Earlier, Singh’s friend, Harikrishen Hansraj, bought a similar large plot called Burbreeze, in Tongaat, as director of Zani Property Investments. Within 18 months, both tracts were identified by eThekwini as the sites for new housing developments.

•The two companies then sold the land to the city – on condition that the same two companies got to appoint contractors to develop the land, in projects which would grow to be worth over R400 million.

• Jagadasan appointed his father’s company, Gralio, owned by his step-mother, for the role; a contract that is now worth R361 million.

• Hansraj appointed a company called Palm Civils to develop 550 low-cost houses at Burbreeze at a cost of R18 million to ratepayers. But Elvin Munsami, director of Palm Civils, then announced he was unable to execute the project.

The Manase report stated council should have cancelled the contract. Instead, Munsami was allowed to simply hand the contract over to Gralio.

• Under Singh’s control, the cost of the Burbreeze contract has since ballooned to R50,5 million – while the cost of each low-cost house to ratepayers has exploded from R33 000 each to R162 000 per unit. Only 311 of the 550 houses were built.

The Manase report warned council of an “irregular” relationship between Gralio and Palm Civils.

This week, Singh declared: “We were not involved in Palm Civils in any way and never have been.”

However, The Witness found that Munsami and Hansraj both previously worked for Singh when he was director of Durban Transport.

Singh admitted: “Munsami’s company folded and was liquidated but yes he now works for Gralio.”

Singh also denied any “collusive behaviour” in the double windfall for his empire.

He said Zani was independent from his own businesses. “Both Zani and Hazedew approached the council independently and got the same deal. [It was not worked out beforehand],” said Singh.

However, The Witness has established that:

• Hansraj has at least seven companies registered to the same address where Singh has two businesses. All of them share the same PO Box address;

• In Phoenix Industrial Park, Singh has another seven registered companies, which share the same address and PO Box with the companies owned both by Hansraj and Singh’s wife, Shireen Annamalay.

Hansraj could not be contacted for comment.

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