R64m 'dodgy' land sale now in SIU's sights

A BLAME game has ensued with no sphere of government wanting to take ownership of a project which saw a piece of Table View land purchased allegedly at an inflated price for the relocation of residents of an informal settlement.

Seven years later, the project earmarked for the piece of land purchased by the DA-led provincial government for over R64 million, has yet to start.

The land acquisition is now being assessed by the Special Investigative Unit (SIU) to determine whether it falls within the unit’s investigation under Presidential Proclamation 265 into corruption involving provincial Human Settlements Departments and the Housing Development Agency.

SIU spokesperson, Kaizer Kganyago, said: “At the moment, the SIU is currently going through assessment processes to ensure that this specific piece of land and the acquisition thereof fall within the scope of the SIU investigation. Should it not fall within the scope of the current proclamation, the SIU will consider applying for an amendment of the proclamation.”

In his capacity as Transport and Urban Development mayco member in 2018, Brett Herron, the current GOOD party MPL, said he was acting on the advice of the City’s own land acquisitions specialists when he opposed the purchase of 17 hectares of land in an industrial park in the Killarney Gardens precinct.

“The Western Cape Government must explain its irrational purchase of a piece of land in the Table View area for R64.4 million, when it paid just R9 million for a larger, more developable piece of land right next door. The pretext for the purchase was the “urgent” relocation (in 2018) of the Siyahlala informal settlement, which had spilled onto the rail reserve in Dunoon. However, seven years later, the relocation has still not occurred, and the trains are unable to run. Besides the radically inflated cost, the purchase was unnecessary because the City of Cape Town already owned land suitable for housing development in the immediate vicinity,” said Herron.

He said the land was also not suitable for housing, as seven of the 17 hectares form part of a wetland.​

The provincial human settlements department, however, proceeded to purchase the land through the Housing Development Agency.

“The City experts estimated the land to be worth about R20m, while the Industrial Park Owners Association (where the land is located) estimated its worth at about R21 million. The most recent comparable transaction at the time, land bought for housing development in the Annandale area, had cost R225 per square metre, while the developable portions of the land offered to the City would cost R542 per square metre. That’s nearly three times higher. The City had recently acquired developable land in Doorenbach at a cost of R9m for 130,000 square metres. This deal proposed a price of R64.6m for 100,000 square metres of developable land right next door. That’s an 820% premium," he said.

The City also already owned land adjacent to Potsdam Road, just down the road, close to a taxi rank and eminently suitable for housing development, Herron said.

“I am hopeful that the public will finally find out why this land deal was pursued and whether the state acquired land at best value for money as is required by GIAMA (Government Immovable Asset Management Act). Land has become an opaque and convenient currency for corruption,” said Herron.​

The Western Cape Department of Infrastructure said it welcomed any investigation and would "cooperate fully".

Melt Botes, spokesperson to Provincial MEC Tertuis Simmers said: “This matter has served before the Standing Committee on Public Accounts (SCOPA) in the Western Cape, where all the factual information was tabled, including the cost analysis. It is important to state plainly that allegations of overpayment are unfounded. The price was determined, offered, and supported by the City of Cape Town.

“The facts are clear: in 2017, Mr Herron’s then own administration offered to buy the land for R64 million after revising their initial R58 million offer. When the City could not finalise the procurement, they approached the Province in 2018 to purchase the property urgently, confirming that they had also identified it for Doornbach expansion. The province simply acted on the City’s request and paid the same price they were willing to pay. For Mr Herron now to call the price “radically overpriced” is both ironic and opportunistic. In addition, we have not seen any formal council resolutions showing that Mr Herron opposed the said acquisition on record."

On project delays, Botes said it stemmed from appeals lodged by the Racing Park Owners Association after rezoning was approved.

"As soon as the final appeals were resolved, the then Western Cape Department of Human Settlements proceeded with the installation of bulk services, as per the agreement with the City of Cape Town. Any matters related to relocation and the construction of top structure must be directed to the City of Cape Town. The Western Cape Department of Infrastructure considers its role in the process as concluded."

The City referred questions on the matter to the National Department of Human Settlements and the Housing Development Agency.

The national department and HDA did not respond to requests for comment by deadline.

Cape Times