16 land deals in DA-led WC under Special Investigating Unit scrutiny

Allegations of inflated prices on land purchased for housing projects in several provinces have prompted the Special Investigation Unit (SIU) to investigate 16 land deals in the Western Cape. 

The SIU on Friday briefed the Portfolio Committee on the status of its investigation into serious maladministration in the affairs of the Housing Development Agency (HDA) and provincial human settlements departments, an inquiry expected to be finalised by June next year.

So far, a list of over 100 transactions are to be investigated across eight provinces. 

The transactions under investigation so far include 16 in the Western Cape; two each in Mpumalanga and the Eastern Cape; 17 in the Free State; 25 in Gauteng; 37 in the North West; and five in the Northern Cape.

While investigations are still underway, chief national investigations officer Zodwa Xesibe noted that several key findings have already emerged. These include that the price of land had risen alarmingly, from reasonable valuations to severe overpricing and much of the land purchased remains unused.

Detailing the nature of what they were looking into, Xesibe explained: “Provincial Departments of Human Settlements transfer funds to (the HDA) with the instruction to buy an earmarked land parcel. The (HDA) enters into negotiations with the landowner, three valuations in respect of the land in question are obtained. The first valuation is usually provided by the landowner. The (HDA) sources two additional valuations. The valuations sourced by the agency are meant to be compared to the landowner’s valuation to determine the competitiveness/ reasonableness of the landowner’s valuation. It is, however, alleged that the agency obtains the two additional valuations, which are grossly inflated, in order to manipulate the purchase price that the provincial departments of human settlements pay for the land in question. It is alleged that the inflation of the valuations is done at the instruction or through the influence of officials of the provincial departments of human settlements.” 

A purchase price is then negotiated with the landowner based on the three valuations. The landowner usually sells the land at a price that is closer to the grossly inflated valuation. A middleman is allegedly introduced at some point in the transaction, purportedly by officials of the HDA and/or the provincial department of human settlements in question. The land purchase agreement is drafted to include the middleman’s commission, which, at times, is calculated as a percentage of twice or three times the purchase price. 

“Land purchased at prices which were in excess of the lowest valuation and in some cases, the valuations and/or purchases were poles apart, with the result that the purchase price did not appear to be in the best interests of the State,” Xesibe said.

The HDA and the National Department of Human Settlements said they had met with the SIU and remained committed to supporting its investigation.

MK MP, Zelna Saira Abader said: "The land bought years ago remains unused while families continue to live in shacks. This is an institutional betrayal of the poorest and most vulnerable communities. We always speak about the dignity of our people, it's heartbreaking to know that we have land that we are not using. My recommendation is a full forensic audit and lifestyle audit of all officials involved with criminal referrals, where applicable, suspend with immediate effect any official pending SIU outcomes, accountability cannot wait for 2026."

National Coloured Congress (NCC) MP Sakeena Frenchman asked who would initiate the next steps regarding possible criminal charges once the investigation is completed, and whether the report would be made available to the public.

The SIU confirmed, once the investigations have uncovered evidence that points to any criminal action, "we are the ones that refer to NPA and we make sure NPA follows through. NPA would then rope in the Hawks to ensure the docket is prepared".

The SIU added that where a matter is in the public interest, they report publicly. 

Cape Times