Durban - THE Msunduzi Municipality is looking to recover millions of rand lost through the purchase of a piece of land, meant to develop a cemetery, that was overpriced and not suitable for a gravesite.
A few years ago, the municipality purchased the land in Lamontsvale Farm for the development of a cemetery, as it was running short of burial space.
Councillors were briefed on the investigation into the matter last month. Councillors declined to speak when contacted, as the issue was discussed by council under confidential items.
However, The Mercury is aware that an independent investigation into the matter found that the land was overpriced. It also found that the municipality paid about R23million for the land which is said to be worth only R6m. It was also revealed that less than half of the land was suitable to be developed as a cemetery.
The council recommended that, if possible, the purchase should be reviewed and set aside, and action be taken against the officials involved.
It was also recommended that the council engage with the director of public prosecutions on whether a crime had been committed.
Many of the officials implicated had left or were fired by the council on other allegations. The council was also planning to go after the official in charge of the land valuation process, as the official has been accused of being negligent.
The investigation alleged that the council was duped by a valuer, who placed the value of the property at R27m. The council transferred about R23m for the land. This price excludes VAT, which increased the costs to R26m.
“It is not just that we overpaid by millions of rand for a piece of land, the purchase is also in breach of the need for the land. The contract for the purchase is that 80% of that land should be suitable for a cemetery, but we have since discovered only about 40% of the land can be developed as a cemetery,” said a source in the municipality, who asked not to be named.
The report concluded that the price of R23m was highly inflated. It found that just three years earlier, a property of a bigger size in the same area and in the same condition was valued at about R1.5m, therefore the price of R23m didn’t make sense.
It said a different professional valuer and sworn appraiser valued the property at about R6.3m.
Municipal manager Madoda Khathide declined to speak on the matter. He would only say the matter was before the law enforcement agencies.
“I do not know where you got the information as it is confidential, and to respond to it would be in violation of council protocols,” he said.
The Mercury