Public Works repurchases Bosasa's Lindela Repatriation Centre

2019-12-21 21:05
Patricia De Lille (Jaco Marais, Netwerk24)

Patricia De Lille (Jaco Marais, Netwerk24) (Jaco Marais)

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Minister of Public Works and Infrastructure Patricia de Lille has confirmed the repurchasing of corruption-linked Bosasa’s Lindela Repatriation Centre in Krugersdorp by government.

In a press statement on Thursday, de Lille said while the property was valued at about R158m by the Land Affairs Board (LAB), the government secured right of first refusal over the property.

This meant they got the property for well below the valued price and acquiring it for R60m.

De Lille revealed the millions of rand government previously had to fork out in terms of monthly payments for the property.

"[The Department of Home Affairs] had leased the property from Bosasa and had a service level agreement with Leading Prospect Trading (a subsidiary of [Bosasa]) which has over time been extended, and which remains valid until 30 November 2020.

"The current minimum cost per month payable as per the Service Level Agreement is R9 135 960 per month – a total of R109 631 520.00 per annum," de Lille said.

However, when Bosasa’s companies went under liquidation and an auction of their assets conducted, de Lille said the department was able to secure a "superb" return on investment, saving over R1.3bn per year.

"Although the property had been included in the public auction on 5 December 2019, the auction was conducted subject to the government’s right of refusal.

"The bidding process was opened at R30 000 000, and the highest bid that was achieved was R60 000 000," de Lille explained.

Government then matched this price and “is in the process of finalising the acquisition of the property at a price of R60 000 000."

De Lille said due diligence had been conducted on the property which also considered the feasibility of acquiring the property compared to the cost of other options such as repurposing the land.

"The feasibility study concluded in September 2019 that the acquisition of the property was the recommended option, and the most cost-effective one," she said.

De Lille added, however, that she will be launching an investigation concerning the value of the property.

The department noticed a difference in the municipal value of the building, R23m, and what both Bosasa and the Land Affairs Board (LAB) valued it at.

"The property had been valued in 2018 by a valuator appointed by Bosasa at R185 000 000. The government’s Land Affairs Board (LAB) determined the fair market value of the property on 24 October 2019 at R158 104 000," de Lille said in a statement on Thursday.

She added, "The municipal value of the property is R23m and I have queried the difference between the municipal value and the valuation from Bosasa and the LAB and will launching an investigation to look into this."

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