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Pretoria - Public Protector Thuli Madonsela is investigating an allegedly irregular sale of municipal land in Tshwane worth up to R40 million.
Madonsela is also set to subpoena city manager Jason Ngobeni to appear before her investigators after failing to respond to several queries to provide information for the investigation.
The sale of the land in Ga-Rankuwa Unit 10, earmarked for a mixed-use development north of the city, is now at the centre of a row between the municipality and two independent property developers.
The proposed development was to build 3 200 mixed units that included single- and double-storey dwellings. A site of 3.164 hectares was identified for the construction of a school in conjunction with the Department of Education.
The tender to buy the land and develop a new township in Ga-Rankuwa was initially awarded to Baagi Ba Mo Gae Investments Consortium (Baagi), a black-owned company that has now laid a complaint with Madonsela.
But the tender was taken over by New Century Homes following an agreement with Baagi, which included a brokerage fee of R6m due to the consortium after the land was bought.
Despite lengthy negotiations that resulted in the withdrawal of a case at the Mafikeng High Court, allegations of improper conduct and a failure to pay Baagi the monies the parties had agreed on are still haunting the project.
One of the main issues was the failure by the North West Housing Corporation - which was selling the land on behalf of the city - to sign an offer to purchase.
This made it difficult for Baagi to secure funding. Baagi also alleged that the price of the land, initially valued at R34m, was significantly reduced to R26m when the land was due to be sold to New Century Homes. This led Baagi to claim foul play on the part of city officials handling the matter.
It further claimed that the new developer had failed to pay the agreed R6m brokerage fee after it had handed over the tender.
Baagi director Mighty Raseroka said in a submission to the public protector that the failure by the North West Housing Corporation, on behalf of the municipality, to sign an offer to purchase had prejudiced the company and made it impossible to secure funding for the project.
“The land Baagi tendered for successfully has been sold to a third party in a transaction that is clearly irregular and unlawful.
Baagi has been substantially prejudiced by these developments and seeks redress from the Office of the Public Protector,” Raseroka said.
The company was no longer interested in participating in the project and would opt for a settlement instead, he added.
“The project is corrupt and there are now too many people involved. Even if they were to return it back to us, we would inherit a corrupt project which is most likely cash-strapped,” he said.
The municipality had not responded to queries about the matter by late on Sunday.
New Century Homes director Dawie Maree said yesterday he was not aware that the sale of the land was being investigated. “But if there is an investigation taking place, we will co-operate with it.”
Maree said that as far as he knew, all the company’s involvement in the deal and the project to build the new units at the site was above board.
The public protector’s media relations officer, Oupa Segalwe, confirmed the investigation, saying Madonsela would issue a subpoena against the municipality.
“The City of Tshwane has not been co-operating with the investigation. The protector will soon issue a subpoena to compel the municipality to respond to her queries,” Segalwe said.
Correspondence seen by the Pretoria News shows that the municipality had failed to co-operate with Madonsela’s office despite numerous reminders about the investigators. A letter signed by the chief executive in Madonsela’s office, Themba Mthethwa, warning the city manager that he would be subpoenaed if he did not respond by February 13, also appears to have been ignored.