Another dodgy R48.9 million Free State Government property deal
19 July 2018
The DA has for more than a year been investigating a suspected dodgy property deal involving the Free State Provincial Department of Public Works and Infrastructure. The Department alienated a portion of land at the Free State Psychiatric Complex (Old Oranje Hospital) to the value of R48,9 million.
In reply to a written question submitted by the DA to the MEC for Public Works and Infrastructure, Ms Dora Kotzee, in June last year, it was revealed that the portion of land was sold to SEDTRADE, but that the date of deed transfer was dependent upon the full payment. To date, as far as we are aware only R5 million has been paid to the Department, while SEDTRADE proceeded with development of the area and construction is now at an advanced stage.
It appears that the Department has entered into a vendor financing scheme with SEDTRADE and the DA is of the opinion that this is irregular in the extreme, especially since SEDTRADE enjoys unfair advantage with regards to Free State Government contracts.
We believe this is due to a close relationship between the owners of SEDTRADE and former Free State Premier, Ace Magashule, stretching as far back to the run-up to the 2010 FIFA Soccer World Cup. Questions remain over several contracts awarded to SEDTRADE at the time.
Since then, the company has received numerous lucrative contracts for the construction of schools, libraries, roads, the supply of sports paraphernalia and the distribution of medicines to Free State public hospitals and clinics.
The DA submitted an application under the Promotion of Access to Information Act (PAIA) to the Department requesting the Valuation Certificate of Property, the Offer to Purchase, Invitation to tender, all tender documents, Minutes of the Bid Adjudication Committee including Minutes of Decision, Departmental Minutes of Decision of Sale, the Contract (Deed of Sale) between the Department and the SEDTRADE Consortium, and the actual payment schedule up to the latest date for which information is available for. See the application here.
The Department requested an extension in October 2017 on our application, which we granted. In March 2018, we requested an update on our application and shortly thereafter, in April 2018, we were informed that our application has been denied. We then lodged an appeal to MEC Kotzee in May 2018, but by June 2018, we have not received any indication from her on the decision of appeal.
Earlier this month we submitted a letter to MEC Kotzee requesting her to forward us her decision by no later than 02 July 2018, after which we will consider the request denied and that we reserve our rights in this matter as allowed for under PAIA.
If the sale of the property was above board, then payment should have been made immediately. Moreover, access to the site should have been allowed only once full payment has been received. That MEC Kotzee and the Department has pulled a veil of secrecy over this deal simply reinforces our suspicion. The DA is now considering options available to us seeking recourse to compel the Department to disclose information requested.
Issued by Leona Kleynhans, DA MPL, 19 July 2018
