ADVERTISEMENT:

 

 
 

Green Belt property deal marred by controversy

Date: 30 April 2016 By: Isabel Venter

The municipality is preventing development and progress in Louis Trichardt, gambling with the future of the town and at the cost of residents.

This is the opinion of a local development company that has been struggling to develop the town’s Green Belt area north of Stubbs Street. For more than a decade now, this area has been "threatened by" or "earmarked for" development on numerous occasions - depending on one’s viewpoint.

Recently, the directors of the company Daybreak Properties 7 (Pty) Ltd. lifted the veil on their dealings with the Makhado Municipality. It has been a 12-year battle for this local company to conclude the deal on the development of the property.

Speaking on behalf of Daybreak, managing director Mr Vino Ramjee explained that the proposed development will comprise a shopping centre of 35 000m² with associated parking, a hotel, and two separate complexes (housing and office).

Of late, negotiations between the two parties reached a stalemate, with Daybreak describing the municipality outright as “corrupt to the core.” According to Ramjee, the manner in which the municipality dealt with them left them with no other alternative but to reveal the “true” state of affairs.

The last straw was when Daybreak learnt that the municipality is favouring other development projects above their project. Ramjee was referring to the deal the municipality struck last year with the Masingita Group of Companies that will expand the Makhado Crossing mall into a regional shopping centre.

Looking over the documents that Daybreak supplied the newspaper with, one can clearly see that dealings between Daybreak and the municipality have been marked with controversy from the onset.

For starters, the tender for the development of the remainder of Extension 9 west of the N1 was awarded to Wadanga-I-Tole Entertainment Park (Pty) Ltd, a shareholder company of Daybreak, by former municipal manager Mrs Faith Muthambi on 3 December 2004. The present-day Minister of Communications served a controversial term as the local municipal manager, a position from which she was abruptly suspended on alleged fraud charges in 2009.

Muthambi, on 27 November 2006, signed the Deed of Sale for the amount of R15.3 million. This was supposed to kick off the land transfer. The deal could not, however, be completed and after Muthambi got the boot, Daybreak ran into a lot of red tape in their efforts to conclude the transaction. The main holdup was caused by mediations regarding the procurement of bulk services for Extension 9, without which the transfer could not take place.

Finally, in 2012, the municipality confessed that the supply of electricity was proving to be challenging. “…this municipality can only make available a 100kVA for a new supply and up to a maximum of a 100kVA for any existing supply,” wrote acting municipal manager Mr L E Mugari on 24 April 2012. This was despite the fact that the municipality had stated in the original Deed of Sale that electricity and other bulk services were available “at the border of the property.” Furthermore, the municipality, after the contract had been signed, vouched for the availability of the services to the property three more times, on different occasions, in writing.

Of note is a certificate that another former acting municipal manager, Mr R H Maluleke, issued on 16 May 2008, stating that “the 179 residential erven … will be provided with the necessary services within a period of three months from the date of this certificate and the Council is prepared to consider the consolidation and the approval of the building plans in respect of the erven.”

Daybreak, in order to complete their development, will need in the region of  5 730kVA electricity. Subsequently, Daybreak was forced back to the drawing board to draft a counterproposal. They asked that the “environmentally sensitive areas” be excluded from the development, purchasing the useable 30.34Ha at a reduced price of R6,28 million. In addition, to sweeten the deal, Daybreak offered to install the electricity at their own cost and deduct the actual cost from the purchase price of the land.

At the beginning of 2013, the municipality came up with a counteroffer - Daybreak should rather assist the municipality “with funds for the upgrading of substations owned by the municipality.” Apart from this, the municipality also requested that a new contract be signed that includes a new price tag totalling a whopping R41 496 000.

More letters and negotiations followed, but with no favourable outcome for Daybreak as the company argued that it did not make good business sense to pay both the new purchase price and for the upgrade of the substations.

Finally, on 26 January this year, Daybreak withdrew their proposal to help out with the substations and reverted back to the original contract signed in 2006.

For more than three months the Zoutpansberger struggled to elicit a response from the Makhado Municipality regarding the deal. Countless emails to the spokesperson, Mr Louis Bobodi, yielded no results, other than an email that stated: “The deal with Daybreak Properties is going ahead, but can’t be discussed as it is private.”

Not satisfied with this response, the newspaper took the matter up with the current municipal manager, Mr Sakkie Mutshinyali. He was made aware that Daybreak was of the opinion that other developers, such as Masingita, were favoured above them and that this constituted corruption.

After emailing back and forth, the newspaper finally managed to arrange a meeting with Mutshinyali on Thursday, 14 April, which was also attended by Daybreak. The outcome of the meeting was, however, not in the least bit helpful but rather a heated debate between Mutshinyali and Mr Aaron Nyufunyufu, another director of Daybreak.

Mutshinyali explained that the municipality had been struggling for quite some time to secure funds for the upgrade of the substation. He further added that it was not only a problem for the municipality, but also somewhat of an embarrassment.  Until such time as the upgrade can take place, there can be no major developments in Louis Trichardt.

According to Mutshinyali, the upgrade could cost the municipality up to R100 million. He said that the municipality was currently not in the position to lay out this amount of capital for the necessary upgrades. “Over the years, we have run through several avenues to try and generate the necessary funds,” said Mutshinyali during the meeting.

In the meantime, Ramjee lamented the fact that the municipality continued “to drag their feet in the finalization … and is acting to the detriment of the local community.” He indicated that if the municipality was not willing to stick to the original sale contract, Daybreak would approach the High Court for assistance. The company feels that they have already bent over backwards to fulfil the requirements of the contract. “We procured the environmental report, supplied bank guarantees, the works … we are tired of the municipality’s corrupt ways, and will force them to stick with their word and continue with our development,” said Ramjee.

 
 
 

Viewed: 1044

 

 
 

Isabel Venter

Isabel joined the Zoutpansberger and Limpopo Mirror in 2009 as a reporter. She holds a BA Degree in Communication Sciences from the University of South Africa. Her beat is mainly crime and court reporting.

 
 

More photos... 

ADVERTISEMENT

 
 

ADVERTISEMENT:

 
 

ADVERTISEMENT