Construction boom leads to disputes over rights

Posted On Thursday, 11 January 2007 02:00 Published by eProp Commercial Property News
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As South Africa prepares to begin major construction projects around the country, heated disputes are set to erupt over the rights to develop lucrative sites

Construction IndustryAs South Africa prepares to begin major construction projects around the country, heated disputes are set to erupt over the rights to develop lucrative sites.

Professor Sipho Seepe, academic director at Henley Management College said that South Africans lived "in a culture of political impunity" and that cases of
irregularities in tender processes were rife across the country.

Recent cases that have been brought to light include Gauteng transport department head Sibusiso Buthelezi awarding a R5-million tender to the company of
Nomusa Mufamadi, wife of cabinet minister Sydney Mufamadi. Tshwane City Mayor Gwen Ramokgopa along with several council members have also been
accused of tender irregularities in a service delivery outsourcing contract.

Group co-ordinator of Afro-centric consultants Dan Mahasha is suing the Johannesburg City Metro Council and the Johannesburg Property Company (JPC) for corruption.

Mahasha said that in 2000 his group, trading as African Professional Consortium, was awarded the tender to develop Orlando Power Station into an entertainment and business centre in a deal worth more than R2-billion.

According to Mahasha the deal fell through when the current mayor, Amos Masondo, took up his post in 2001 and the new administration conspired against him as none of his associates were in alliance with anyone in the mayor's camp.

Seepe said he was not surprised. "In our experimental democracy, we find that people aren't placed in positions of power according to their expertise, but because of their political connections. People in power feel that because they are politically deployed and not by merit, their positions are temporary and they should get as much as they can while they are still in power."

"We had already entered into a provisional agreement with the municipality," Mahasha said. "From there all we had to do was wait for the city (Metro) to complete rezoning procedures. When Masondo came into office, everything was changed and the tender was re-advertised. They already knew who they had in mind."

Mahasha named JPC executive director Leila McKenna and speaker of the Johannesburg Metro council Nkele Ntingane as the main conspirators in ousting his consortium in favour for the Linsela Consortium. Both the JPC and City of Johannesburg declined to comment.

Seepe said that there were too many inconsistencies in the way politicians were relating to their jobs and the public.

"This type of politics is not sustainable, and corrections will only be made once people start asking important questions."

Construction for the Orlando Ekhaya centre began in July last year. The consortium chosen to develop the site includes Linsela Holdings, Old Mutual Properties, Standard Bank, and a new BEE trust formed out of Soweto-based businesses.



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