A DA province exposed; an ANC municipality exposed; many taxpayers left in the cold
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Oudtshoorn. 10 October 2012. 07h35. A JEF reader opened the Bitou Wavelengths… “thing” again within the last few days.
Below is the text of the JEF opinion piece.
But first a note:
The Wavelengths fiasco is a management fiasco. It clearly indicates that the Western Cape provincial government and the Bitou local government do not have the faculties to manage the affairs of taxpayers and ratepayers… And cannot provide, even with money available!, for the destitude.
And on 29 September I was aghast to learn that the Western Cape housing minister shared a “best department” award!
Here is the JEF text:
Let me add my reaction to the debate regarding the Plettenberg Bay/Wavelengths debacle. As a fellow South African and investor, I am too like many others concerned about the political dispensation and how those in power disregard the rule of law and act with impunity. We need to know where we heading and how to plan our future. This to me was a great opportunity to use as bench mark for my own understanding and planning.
As a retired 14 year veteran involved with the inner workings of governmental processes and accounts I fail to understand how, with all the controls, procedures, auditors, internal and external, the minister could allow a contract to be signed, R 29 million in funds procured and paid over to the powers that be for a property worth R2.1 million. This is a no brainer.
The media reaction and subsequent handling of the situation was to me suspicious and obviously questionable. I decided to do a little research and used information readily available to all, inclusive the provincial government and the minister.
How can a municipality or individuals who are not in control of the checks and balances of a provincial government convince government to make such an error?
It is not as if one can walk into an office in Cape Town, open a safe and remove the funds for such a venture. Valuations are notoriously subjective but what we know was that the 3 parties concerned were in agreement when it came to the price to be paid, for the property. The process was finalized up and until the funds, now short, had to be paid over to the seller.
If this was a war and the minister were the general in charge we the public would certainly have perished as a result, in scale and size, of the errors made.
In asking around I found the shareholders of Wavelengths to be a local family who predominantly acquire properties, add value through development and mainly keep such as long term investments from which they derive rental income.
I checked the deeds office to determine the acquisition price and were surprised to find that inclusive of holding cost, the value in cost to Wavelengths over the 5 year period they owned the larger part of the property, were approximately R14 million. This placed a big question mark over the R2.1 million reported in the media. I also learned that they started a process of re-zoning with the intention to develop the 37 Hectare property.
In property circles I found a general feeling on the developed value of the property to be , taking into account that we are talking about Plettenberg Bay and not Sannieshof, 3 times the R29 million in any one of the residential, commercial or industrial market. A value the minister at first accepted. It stands to reason that 37 hectare will be more sought after in Cape Town center for example than Koekenaap and therefore a difference in value.
Why then were they happy to sell?
It was suggested that, when powers that be at the time, learned of the potential development the expropriation threat were mentioned. The property was needed for low cost housing and that support for another type of development would not be supported.
Is the property that good I wondered and made the effort to visit it? I found to my astonishment that the minister, the municipality as too the seller were justified in their understanding of its value. The 2.1 million valuation that later became the contentious issue obviously referred to a valuation for agricultural land, but both the minister and municipality new that they are the only powers in control and authority for the re-zoning of the property. Something they obviously new they were going to do. Once done, mere mortals would not have had the funding for its acquisition.
37 Hectares, on the main road, within the urban edge, located between the residential areas of New Horizons and Kwanokutula, next to a school and close to others, infrastructure for municipal services in close proximity, commercial infrastructure of shops and transport within a stones through. Even governmental infrastructure like The Department of Home Affairs is located within a 5 minute walk.
Considering the Guide Plan for a minimum of 25 units per hectare and one can imagine how many units could have been built on the 37 hectares and how many of those destitute be accommodated.
Why then did it become a hot potato?
Political rivalry. An ANC held municipality and a DA held province were one of my immediate thoughts.
It was a closely held ANC constituency and a very plausible potential DA takeover. Both needed the land for the underprivileged vote. Neither was going to allow the other to take advantage of such a situation. It also became common knowledge that the land will be acquired. The Minister visited the property and even advocated for it in the Bitou Council Chambers. The transaction was also advertised in the Government Gazette. The purpose and result of which confirms and validates the full and final acceptance and merit for the transaction. Both parties new its value and its political importance and for the minister to later claim misconduct by others place a question as to the integrity of his Office. The Office of The President is not about an individual but the institution of President.
The ANC controlled the municipality, the town and current electorate and the DA controlled the money for the project. The voters believed their respective candidates that they will be the benefactors after the election of a new housing project. The political control still undetermined but as both advocated for the project they had every reason to believe in its future.
I think the Minister thought he had a fail proof strategy.
Behind in the election race, denying the funding, would be disastrous for the DA. Approving the funding could benefit them tremendously. If they lost, they could claim misconduct on the part of the ANC especially with the past record of the ANC in general. If they win however they would not only control the Bitou municipal area but also the money appropriated for this purpose but to be used at hearts content. They could still claim misconduct and arrange for the necessary measures as so called proof. The media for one is always willing with the hangman’s noose in such cases.
My second thought:
All this happened close to the end of March, the end of the fiscal year. It is required by National Government that all unused funds be returned to Treasury at the end of the fiscal year. Most governmental departments are always in need of more funds than what were approved in budget and if some can be diverted to the next fiscal year from the previous year, shortfalls can be provided for. Dumping funds in unfinished projects is an old strategy used for circumventing such a situation.
Was this the case? It certainly looks as if it could have been.
The unforeseen problem seems to be that after the election and by the time that the DA took over from the ANC a substantial amount of the funds was utilized for other purposes. Add to that the recessionary situation, the fact that the building industry was in tatters, a necessary source of income for developing infrastructure for low cost housing and one can understand that they were now faced with an unenviable difficult situation.
No longer will they be able to pay for the land bought but also will they not be able to develop the land into much needed housing for those who needed it and voted for them.
Mudslinging, unsubstantiated criminal charges and court cases followed. Cost of litigation after all is much cheaper than following through with the project. As the party in power they will be able to buy time for solving the problem with the electorate at a later and more convenient stage. The ANC is after all to be blamed would be the appropriate argument.
This should have been a win win situation for all considered. I for one believes and I also know of well known developers and business people who agree that it was an ideal transaction for all considered.
There are single residential properties in Plettenberg Bay for similar amounts, business people paid that for one buffalo, a 37 hectare wine farm will cost more and let me remind those in doubt of the R100’s of millions paid for a similar piece of land in Knysna a few years ago. Those who buy these properties in the private sector understand their value and how to turn a profit from them.
Political parties however should not take advantage of such opportunities and that to the detriment of the people they profess to serve.
The difference being that thousands of people, men women and children would have benefited had the political brains trust found an amicable solution to the problem. The politicians are after all claiming to be the experts and profess to be qualified to make decisions on our behalf and work for the benefit of us all.
This might still come to haunt them, maybe not those who were involved, but certainly the political institutions as the human memory is long and unforgiving, especially when it comes to the well being of the children.
This is one the DA allowed to slip and I believe they should remedy and salvage.
Past and present ruling parties has used the infrastructure of the state to their benefit and as a DA supporter I urge those in charge not to stoop to these tactics and methods as it will be disastrous and counter productive. I for one support the DA as I believe in the integrity by which they govern and conduct themselves in general. I am however willing to speak out if I believe a wrong was done irrespective by whom.