Cape Town - Mayor Patricia de Lille has ordered a forensic investigation into the auction of prime City property on the Foreshore that was severely undervalued.
“I discussed the matter with the City manager, Lungelo Mbandazayo, and this week wrote to him to request that he initiate a forensic investigation. There are allegations that the land was severely undervalued and that this resulted in a loss of R58 million,” De Lille said.
Last month, social housing advocacy group Ndifuna Ukwazi sounded the alarm after they obtained documents which raised serious questions about top City officials allegedly implicated in a so-called botched auction of the prime piece of land.
The City gave notice in local newspapers of an application by Growthpoint Properties Limited to develop Site B - a 3 932m2 piece of prime land on the Foreshore.
Growthpoint plans to develop a skyscraper that “aims to be a world-class, timeless, innovative, sustainable building, which will serve to inspire future buildings”.
What caught the organisation’s eye in the City’s notice was that Growthpoint was asserting it already has the rights to build 46000m2 of bulk on the land. The balance of the floating bulk on Blocks A and B is therefore approximately 46 000m2 and is available in the area described as Block AB, which includes the site of the Icon building.
When Block B1 was bought by Growthpoint, it only purchased 17 500m2 of that bulk.
“I wrote to the city manager to express my concern at this alleged loss of public funds and also stated that the City could also run the risk of an audit query from the auditor general or as a result of a member of the public reporting the matter to the public protector,” De Lille said.
Jared Rossouw, co-director at Ndifuna Ukwazi, said: “At this point we welcome the forensic investigation. It must be swift, the results must be made public, and those officials and politicians who are responsible must be held accountable.
“In our opinion, if the City were able to own and sell bulk rights it would fundamentally change the land and property regime as we know it in South Africa. This would be welcomed - progressive cities across the world do retain ownership and trade bulk rights in order to capture and redistribute the value of land for the benefit of all residents - but it would seem this is not supported by the current policy and legislative framework,” Rossouw said.
Over the weekend, Reclaim the City members held a demonstration during DA leader Mmusi Maimane’s speech at the launch of the party’s election campaign.
“He said his party stands for ‘clean and transparent’ governance. We wanted to ask why he was silent when Cape Town deputy mayor Ian Neilson lost up to R140m on Site B on the Foreshore. That money could have been used for housing,” spokesperson Sammy Mohaleamalla said.
Growthpoint Properties said: “We are engaging directly with the City of Cape Town regarding this property, which we acquired through a public auction with a vision to create a precinct together with two neighbouring office properties that we already own.
“While the development is still in the planning stages, we are committed to building a landmark property that creates jobs and opportunities and is an asset for the city, its people, and the environment.”