The Amatola Sun Hotel was not suitable for government offices and it would have been cheaper to build a completely new building or convert it at a cost of R10 million on top of the R5,5m purchase price, witnesses told the Pillay Commission of Inquiry into Eastern Cape government corruption.

The Amatola Sun at Bhisho was bought from East London businessman Tony Cotterell for R5,5m in March 2004 initially to become offices for the provincial Treasury Department. It was also subsequently decided to use the former hotel and casino as the headquarters for the House of Traditional Leaders.

However, none of these plans came to fruition and the provincial government subsequently sold the hotel to the Copper Moon business consortium. That sale has not been ratified and is currently being investigated.

The commission, chaired by Judge Ronnie Pillay, has spent time since Monday hearing about the haste that went into the purchase of the hotel by the Treasury Department, a special sitting of the Tender Board to ratify the deal and a report that said the hotel was not a viable proposition.

Denis Peens of HQZQ Consultants submitted a report to the Tender Board on the hotel in March 2004.

The Tender Board had specially convened in February to ratify the sale to the Treasury Department.

However, the board insisted on a valuation and a report before it could ratify the sale.

Peens in his report said the hotel building was not suitable for conversion into office accommodation as the stresses on the floors of the upper level were designed to deal with people staying in the hotel's bedrooms and not for the heavier weights required by office staff and equipment.

The layout of the building also did not lend itself to an easy conversion to office space.

The land the hotel was on was worth about R1,6m, about a third of the purchase price, but it was on the other side of a busy highway and there was municipal land much closer to the other government departments in Bhisho itself, said Solly Pretorius, the former deputy of property management in the Department of Public Works.

His superior Emily Nombungu told the commission that the Treasury was driving the sale although her department was normally involved in acquiring buildings.

"There seemed to be a hurry to get things done," Nombungu said, adding that Treasury had given the Public Works Department R10m for the deal which would come from Public Works' budget - R5,5m for the hotel and R4,5m for alterations or further development.

Pretorius later told the commission that when there were plans to start developing the site there was no budget for development and that he had been told the R4,5m was all gone.

Mvuyeseli Mboya, legal adviser in the Premier's Office and the Public Works Department until 2004, told the commission on Wednesday that he had been called in to look at a deed of sale for the hotel by PWD head Dumisane Mafu.

"The deed was a legal document and I also told him that I had heard it would cost more than twice the purchase price to convert the building to which Mafu said 'that's been taken care of'."

Mboya told evidence leader Philip Zilwa that he had not been asked for his opinion on the deal but just whether the deed of sale was a proper document. He also said the acting head of Treasury, Bulelwa Nqadolo had been present when the deed of sale was signed in March 2004.

She denied this.

Responding to questions from Pillay, Nombungu said it was hard for a civil servant not to go ahead with something that was wrong. If one refused "there were ways they could make it difficult".

In this instance if she had refused to co-operate she would be "treading on the toes of Mafu and Nqadolo".

She earlier told the commission she had been suspended in June last year and was still waiting for a hearing.

The commission will continue with its probe into the Amatola Sun sale on June 12.

Eastern Cape News
Publisher: I-Net Bridge
Source: I-Net Bridge