Cape Town - The City of Cape Town is to buy additional shares in Convenco, the holding company of the Cape Town International Convention Centre, to contribute R550 million to the centre’s expansion - despite question marks hanging over the ground to be used for the expansion.
The funding comes in the wake of allegations by Steven Lukey, from SH Lukey and Associates, that there were irregularities in the way the Northern Foreshore Development and expansion of the CTICC have been handled.
The Northern Foreshore Development refers to the initial plan for the development of land parcels on the Foreshore, including the area in front of Naspers and the site now occupied by the CTICC.
According to a report submitted to the city’s mayoral committee on Tuesday, the city approved the CTICC expansion in principle in 2010. It also committed funding on the 2012/13 and 2013/14 budgets for the development, in exchange for additional shares. As the purchase of these shares has not yet been finalised, the recommendation at on Tuesday’s meeting was for the city manager to sign the offer for the shares.
It was agreed that the “city makes up to R550m in funding available for investments in the CTICC for which the city will receive CTICC shares to the same value in return. This investment will maintain the CTICC’s status as a municipal entity and will serve as a contribution towards the CTICC’s expansion programme”.
The report notes that the funding strategy is “completely secure: and would only entail remedial actions should the economic situation fundamentally change”.
Lukey has questioned how this expansion can get the green light when independent bodies, including the public protector investigation of the procurement of erf 246 and the probe by the council’s forensic department into the R700m design tender found evidence of maladministration.
A forensic probe by the city last year found irregularities in the way the tender had been awarded.
The city’s mayoral committee member for finance Ian Neilson said then that the Convenco board should “consider taking steps to cancel the architectural contract”.
But CTICC chairman Ashley Seymour argued in November last year that there were insufficient grounds to overturn the tender, despite flaws in the tender process, and the expansion was allowed to go ahead.
Lukey, who has been involved in the expansion plans for several years, consulting for Naspers, the city and the provincial government, said he was invited by the provincial government’s standing committee on public accounts to present his concerns about the way the expansion was being handled.
But the presentation was not heard at the committee’s meeting on Monday, when the DA voted three against the African Christian Democratic Party (ACDP) and the ANC’s two votes to have the item removed from the agenda.
DA MPLs questioned Haskin’s motive for including the item on the agenda, with Public Works MEC Robin Carlisle attacking committee chairman Grant Haskin via SMS, saying he could not believe the committee would entertain the matter.
Lukey said on Tuesday that he had yet to be paid the R2.5m for consulting work he had done on the CTICC project between 1996 and 2005. He presented documents which supported his argument that there was a joint venture agreement with first the city and Naspers, as the principal landowner, and then the province, about the expansion of the foreshore.
He showed the Cape Argus e-mails referring to invitations from the standing committee and the public protector to provide more information, supporting his claim that he did not approach these institutions himself.
The proposed construction cost for the CTICC’s expansion is R832m. The new convention centre is scheduled to open in January 2017.
Carlisle said he was aware of Lukey’s concerns, but they had all been dealt with. “They have got nothing to do with Scopa.” The province did not have a contract with Lukey, and therefore did not owe him any money for outstanding consulting fees.