Premier’s mansion discount scandal

CANDICE BAILEY AND DIANNE HAWKER

ANC deputy secretary-general and North West Premier Thandi Modise controversially bought an eight-bedroom house from the state at a more than 50 percent discount.

Modise bought the property, valued at R1 million in 2007 – for R405 000.

She signed the agreement of sale in 2006 when she was the Speaker of the provincial legislature. But the property was transferred to her name in 2008 after she was elected deputy secretary-general of the ANC.

However, the opposition DA – which has been probing the transaction – quizzed the North West government about it this year.

The North West government confirmed that the property sale did not follow the required tender procedures and policies.

The property in Mafikeng was used as a guest house for the former Bophuthatswana homeland government.

The 2000m2 property is now worth R2m. The DA has asked several questions in the North West provincial legislature about the legality of the 2008 sale which was handled by the Department of Public Works, Roads and Transport in the North West.

But it was revealed that the purchase price was based on a seven-year-old property valuation – in contravention of the North West Land Administration Act.

The act states that the price of any state property should be based on a valuation certificate issued in the year before the sale takes place.

Provincial Public Works MEC Raymond Elisha has defended the sale, saying no official had transgressed the act.

Elisha said a 2001 valuation was used which priced the property at R450 000.

Modise managed to get a further 10 percent discount on this price, forking out only R405 000.

But Lesiba Kgwele, spokesman for the office of the premier, said that Modise would not have been privy to the valuation process for the property, and referred queries to the public works department. The provincial public works department did not respond to media queries sent to them as early as Wednesday this week.

Kgwele said Modise negotiated with the department for a reduction of the price as it was “extremely dilapidated and [un]inhabitable.”

“Then speaker Modise did not receive any preferential treatment or use her position to acquire the property.”

The R45 000 discount was “similar to all other first time purchasers of properties from the provincial government”, Kgwele said.

He dismissed the allegations of wrongdoing and said Modise welcomed any investigation into the matter to clear her name.

Kgwele suspected a political conspiracy behind allegations against Modise.

“[The allegations] are part of a smear campaign launched by a corruption network involving politicians and officials that are threatened by Premier Modise’s anti-corruption drive,” said Kgwele.

The North West, especially the ANC in the province, is divided along factional lines, and some in the party were not happy with Modise being appointed the premier in 2010 after Maureen Modiselle was removed due to partisan infighting.

Unanswered questions remain around the procedure leading up to Modise purchasing the house.

In 1999, the North West executive council adopted a policy for the disposal of redundant state owned houses.

The policy stipulates that:

l Redundant houses have to be sold by tender.

l The tender should be widely advertised

l Preference would be given to previously disadvantaged people who have not owned a house before. They would qualify for a 20 percent discount.

l Those who had previously owned a property would qualify for a 10 percent discount.

l Public servants who occupied these properties would be given first option to purchase the residence at a market value.

Kgwele told The Sunday Independent that Modise did not live in the house and had “made an offer like all members of the public”.

However, Elisha admitted in the legislature that the property was not advertised in the print media as required.

“No offers were invited nor received, since the first option to buy is afforded to the sitting tenant as the policy guidelines [recommend],” he said in a May response to DA North West leader Chris Hattingh.

Responding to questions from The Sunday Independent, Hattingh said Public Works and Modise should explain what happened.

“This is not an isolated incident. Public Works has been selling property for below market value to a privileged few. I would say that property was worth R2m or R3m.”

But Elisha says the state had “realised a sizeable savings in the transaction as the property was redundant, uneconomical to maintain and (un)inhabitable at the time of the sale”.

The Sunday Independent has seen a copy of the 2007 valuation, which priced the property at R1m and a later valuation, from last year, where it escalated to R2m.

The property is centrally located within walking distance of shops and the business district.

According to the 2011 valuation, the house has four self contained living units, each with its own bathroom and toilet.

There is also a communal area consisting of a lounge, a dining room, two reception rooms, a scullery and a kitchen. The property has a swimming pool and a covered entrance porch.

The 2011 valuation had been done by property valuer Eben Zietsman, who had also done the 2001 valuation.

In his latest valuation Zietsman had said if the property was “in good physical and functional condition” it would be worth R3.2m.

Zietsman confirmed having done several valuations on the property but said he could not discuss them because of client confidentiality.

When The Sunday Independent visited the house, it was evident that renovations were under way.

Neighbours said nobody had lived in the house for several years and they saw contractors at the house over several months.

candice.bailey@inl.co.za

dianne.hawker@inl.co.za