West Bank: anger over IDZ tactics

Posted On Thursday, 23 March 2006 02:00 Published by eProp Commercial Property News
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Parastatal accused of luring locals rather than new investors

Gwyn BassingthwaighteProperty owners and developers are on a collision course with the Industrial Development Zone over the future of valuable industrial land on the West Bank.

They are accusing the parastatal investment company of luring existing East London tenants away from other areas with subsidies, instead of drawing in new investors.

Prominent industrial property developer, Pam Golding's Gwyn Bassingthwaighte believes the tactics the IDZ is employing could result in investors turning away from Buffalo City.

The dispute has reached such proportions that the local branch of the South African Property Owners' Association (Sapoa), which at one stage acted as mediator, has withdrawn from talks between the parties.

Sapoa chairman Mickey Webb sought clarification of the IDZ's investment and rental policies when he put a number of questions to IDZ chief executive Simphiwe Kondlo.

Instructed by the IDZ, attorneys Smith Tabata's Andrew Conroy replied that his client "will not be rushed into a response".

He also informed Webb that in future all queries should be addressed to the IDZ's law firm.

Sapoa, on behalf of some of its members, wanted to know from the IDZ whether private individuals could buy land in the IDZ's designated areas.

He also asked whether the IDZ was allowed to lure existing tenants of other properties to its designated areas.

Webb wanted to know what rentals the IDZ was offering to tenants and whether it should be allowed to subsidise rentals at all.

He also enquired after rent escalations and whether service charges were subsidised by the IDZ to its tenants.

The 50 questions were copied to Smith Tabata, IDZ chairman Zolile Tini, former Eastern Cape Development Corporation chief executive Kevin Wakeford, Portnet's Terry Taylor and the Border Kei Chamber of Business's Les Holbrook.

Until this week Webb has had no response from the IDZ.

In November last year Kondlo wrote to Webb, saying that the IDZ's property activities were circumscribed by the Department of Trade and Industry's national IDZ programme.

He agreed that the IDZ's initiatives should also attract investments from the domestic industry.

The IDZ, however, was not actively seeking merely to relocate industries from one node of East London to another.

Webb told the Daily Dispatch that Sapoa's difficulty came because the IDZ and the "concerned property owners" are both members of Sapoa.

He said: "We have been unsuccessful in mediating the dispute and they (the IDZ and the landlords) will now have to do their own thing."

Webb said the matter had been referred to Sapoa's head office but there has been no reaction because the organisation's national chairman, Neil Gopal, is overseas.

IDZ spokesperson Ayanda Ramncwana said it was his organisation's understanding that the matter would be dealt with "in terms of a process of engagement agreed with Webb".

In a March 2 letter to Conroy, Webb expressed his concern that "what was originally a co-operation and mediation between members (of Sapoa) is now taking on a litigious appearance".

This followed Conroy, in a letter to Webb, warning the Sapoa membership, "more particularly those that are considering approaching the press, that our client?s right to protect its good name and reputation remain fully reserved and (it) will not hesitate to do so".

Conroy's warning referred to a letter in which Webb said he had intervened to stop members going to the press.

 

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