Willem Steenkamp  January 29 2005 at 03:54PM  

The City of Cape Town has lost at least R50-million - enough to build 2 000 houses for the poor - through the sale of council-owned land at a discount in the prime Big Bay seaside development in Bloubergstrand.

Last week Weekend Argus exposed the latest sale, a deal in which a select group of black empowerment companies - mostly with strong African National Congress links - were offered tranches of land at discounted prices without having to tender for them.

Last year the city lost at least R30-million when it sold a prime 14ha piece of beachfront land to the lowest of three tenderers.

The R115-million bid by Jonga Entabeni, the property group of former Gauteng premier Tokyo Sexwale, was accepted by the council even though other companies bid R151-million and R147-million.
Recently the city lost another R5-million on a Durbanville property sale by awarding it to a company whose bid was R5m below the best offer.
In the latest Big Bay transaction, the city stands to lose an estimated R20-million by selling land at substantial discounts to 17 empowerment companies picked by the city.

Democratic Alliance councillor Ian Nielson said the city would have generated at least R20-million more if the land had been sold at market prices.

After being given the opportunity to buy the plots at a discount, many of the 17 companies immediately put them back on the market at much higher prices which people say are a true reflection of their value. Weekend Argus has a list of the prices at which the properties were put back on the market.

Nielson said: "With R50-million they could have built 2 000 houses for the poor. This is shocking. I would not be surprised in the least if civic-minded ratepayers were to lay formal charges of maladministration against the city.

"The picking of specific companies or individuals who benefit through these deals has little to do with empowerment and everything to do with the enrichment of individuals," said Nielson.

"We have consistently said the city is following the wrong (empowerment) strategy. If the intention is to improve the circumstances of the poor, the right strategy is to sell at full market value and to use that money to provide services to the poor."

After Weekend Argus exposed the existence of the list of preferred recipients of valuable Big Bay land and the lack of any tender process, Cape Town mayor Nomaindia Mfeketo instituted a forensic investigation.

While Mfeketo claimed the list "was compiled without any input from the leadership of council", opposition parties say the mayor was fully aware of the matter and both the DA and the Independent Democrats had in fact desperately tried to convince Mfeketo at a December 8 council meeting to take the Big Bay empowerment plan on review.

However, the mayor had refused to bow to pressure from the parties.

Weekend Argus is in possession of a letter dated November 22, 2004, written by the city's director of property management, Ruby Gelderbloem, which gives the issue some clarity.

Regarding the Big Bay land sale, the letter states: "The process and procedure to be followed with regard to the sale of these properties were subsequently approved by the executive director: development and infrastructure and submitted to the executive mayor for information purposes."