By Chris van Gass

Western Cape's provincial cabinet has approved a "revolutionary" plan to dispose of the controversial Somerset Hospital site that will involve black economic empowerment entities.

The plan is to lease the 8ha site to the highest bidder, which will then have to take on board a consortium of preselected empowerment groupings approved by the cabinet.

Premier Ebrahim Rasool said empowerment companies willing to take part in the project would need to comply with set criteria drawn up by the provincial government and be willing to join a consortium of empowerment groups.

The new approach follows allegations of favouritism. Rasool said his cabinet intervened because of the "contested" environment that prevailed.

The site, adjacent to Cape Town's Victoria & Alfred (V&A) Waterfront, has already attracted interest from V&A Waterfront owners Dubai World, Shoprite Checkers and empowerment consortiums.

Rasool said while he did not want to put a price tag on the lease of the land, it could "easily fetch R1bn".

Public works MEC Marius Fransman will explore the legal aspects of putting together the empowerment consortium.

Rasool said the site would be put out to tender by April and that it had been decided to follow the leasing route rather than an outright sale to ensure that the site would be maintained in the public sector and retained for future generations.

He said a panel of independent experts would adjudicate the transaction to ensure fairness, honesty and integrity.

Rasool said part of the plan was to provide homes for people earning R3,000-R7,000 a month, to meet the needs of local communities.

Business Day