Storm over Post Office's R520m lease

2011-07-17 10:31

Johannesburg - The South African Post Office Group is embroiled in controversy after it allegedly entered into a R520m lease agreement without following regulations.

Questions have also been raised as to why it started paying rent exceeding R20m 10 months before taking occupancy.

According to Treasury regulations, tenders worth R500 000 or more should be advertised and undergo a competitive bidding processes.

The South African Postal Workers’ Union (Sapwu) insists that the Post Office did not advertise the tender as per the regulations.

Government, the Post Office’s sole shareholder, has confirmed that it is aware of the allegations against the mail and banking parastatal.

The R520m contract involves transferring the Post Office headquarters from Pretoria to the Eco Park Estate in Centurion.

Sapwu revealed accounting records showing that the Post Office paid R21m to rent office and parking space 10 months before the mailing and banking parastatal’s personnel could move into the majestic building in Centurion’s prime business location.

The R2.1m monthly rental for Eco Point, a building located in the estate, in May climbed by 9.5% to R2.3m. If the contract is fixed on the 9.5% increase a year, the Post Office would have forked out R520m when the 10-year lease agreement ends.

Post Office non-executive board member Shu'ayb Patel declined to address specific questions linked to the lease agreement, reasoning that this could compromise an investigation about the parastatal making the deal.

“We have been doing a review since May 2010 on the decision to move the head office to Eco Point. This review is a sensitive process and there are governance procedures we are adhering to,” said Patel.

He said that the investigation had been dragging on for 14 months without completion because it is “extremely detailed”.

“We are now at an extremely sensitive stage and if we deal with the details of the review, I will be compromising the process and individuals involved,” said Patel, who added that it could take few weeks for the investigation to be finalised.

No response from Post Office

Two weeks ago, Sapwu requested Public Protector Thuli Madonsela’s office to inquire into why the contract was never advertised and there was no competitive bidding process.

In the application, the union names Post Office Group chairperson Vuyokazi Mahlati and executive director for human resources Maphutha Diaz as people who were notified about the lease allegations.

An official whom City Press was referred to by the company that owns the property’s marketing department but who declined to give her name, confirmed that the company did not bid for the Post Office tender.

She said the company, M&T, was introduced to the agent and never actively sought the Post Office as a tenant.

“M&T did not get involved in any tendering process with the Post Office but we were introduced to the parastatal by an external broker.

“This means that we did not have to source the client because the client came to us,” she said.

She declined to name the middleman - citing a confidentiality agreement.

She estimated that the Post Office would have paid approximately R350m had it opted to buy the building for cash, thereby saving a whopping R170m.

She refused to comment when asked about why the Post Office started paying rent 10 months before occupying the building.

“You must ask the Post Office that question,” she said.

The union gave City Press a name of the man who had allegedly fixed the deal between the Post Office and the property owners, but he denied all knowledge of the transaction.

Communications department spokesperson Tiyane Rikhotso said that the minister, Roy Padayachee, had requested that the Post Office board furnish him with a detailed report on the lease agreement.

“Those issues have been brought to Minister Padayachee’s attention.

“He has asked the board to provide him with a detailed report and he will figure out what action to take as soon as possible,” said Rikhotso.

Sapwu’s labour-law specialist Tutu Mokoena said the union decided to refer the matter to the public protector after failing to get a response from the Post Office on the complaints.

“We requested an audience with the Post Office chairperson Vuyokazi and human resource executive Maphutha with the aim of raising the allegations but they did not respond,” said Mokoena.

- City Press

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  • Ross - 2011-07-17 10:50

    Here we go again. These incidents are never ending.

  • BigMoose - 2011-07-17 10:55

    Stamp out corruption at the Post Office.

      OZNOB - 2011-07-17 14:59


      York Hunt - 2011-07-18 09:46

      Very punny Big Moose! LOL

  • Donovan Jackson - 2011-07-17 11:02

    Open season, huh, the comrades have realised this is how you get the honey from the pot.

  • USSA - 2011-07-17 11:02

    I am noticing a positive trend here concerning the post-police head-quarters lease debacle. It seems that Madonsela's office is making enough waves in such a fashion that she is being asked to investigate more and more issues related to government and parastatal lease agreements. A vote of confidence in her seems to grow as she is taking on some big guns currently amidst the possibility of personal peril. Active investigating of this post-office debacle could imply that the rule of law may (in this case and the Cele case)return to capture some glory, something that has long been missing in the new regime. I do hope that this investigation becomes and remains transparent for all to see. Most of all I believe that if success (open to interpretation)is reached in exposing corruption on this level, the confidence in the Public Protector's office and their capability to investigate without favour would be a huge step towards rooting out corruption.

  • croix - 2011-07-17 11:08

    "We demand"...... A-C-C-O-U-T-A-B-I-L-I-T-Y !!!!!!!

  • Peter Leonard - 2011-07-17 11:15

    When will it end ?? Both the corruption and the useless governance of the ANC......

  • pierre.hough1 - 2011-07-17 11:15

    It must be abundantly clear to everyone, even the criminals, that by now we have slid into the category of a failed state. The only way out of this is a regime change (which is nigh impossible) or for people who are serious about their future to withdraw from all of this and start again, somewhere else. Think about it ...

  • pierre.hough1 - 2011-07-17 11:21

    The Taiwanese Connection. I conducted forensic investigations into serious crime where SARS was scammed, big-time. The Pretoria (Tshwane) Municipality and Post Office share something in common - corrupt officials in the pockets of the Taiwanese.

  • PMG - 2011-07-17 11:24

    Hey Moderator - Where's my comment?

  • Bill - 2011-07-17 11:26

    Bloody hell...! when does this mayhem stop! Zuma, bow out, you are not fit to run this country!

  • Captainmorgan - 2011-07-17 11:30

    First port of call , check who owns the prenises involved

  • thabo.tebele - 2011-07-17 11:32

    Here is your daily dose of corruption people.Its nothing new to most of us.

  • Kosmonooit - 2011-07-17 11:41

    One word explains it: Graft.

  • call a spade - 2011-07-17 11:53

    Vat hulle Thuli.

  • grant9 - 2011-07-17 11:56

    Ah (sigh) another day, another scam. I did not struggle against apartheid so that a few ANC fat cats could enrich themselves at tax payers expence. No sir! I infact was one of the few who tried to maintain the old system. Having gone through the change from Rhodesia to Zim, I tried to warn voters in 1992 but would they listen? NAF!

  • Fowlie - 2011-07-17 13:52

    I suggest that everybody stop paying tax, then the thieving bastards have nothing to steal. Indirectly, or directly, they are stealing from each and everyone that pays tax! Think about it. I suggest that a campaign should start to encourage everyone to stop paying tax to SARS until this corruption stops. They only know one language, fight fire with fire!We should all start to realize that we are dealing with 3rd world people trying to operate or function in a first world economy. It is NEVER going to work.

  • deminimus - 2011-07-17 15:36

    Think ahead. How many people will still be using a post office in 5 years time.Have they not heard of e mail.

  • Eric West - 2011-07-17 19:19

    Is Bheki Cele in charge of the Post Office?

      York Hunt - 2011-07-18 09:48

      If Bheki Cele isn't in charge of the post office deal, he must be peed-off because they stole his idea...

      Staalbal - 2011-07-18 15:25

      It's obvious that Cele is the middleman, he is franchising his businees concept.

  • John - 2011-07-17 19:43

    Yet more hands in the cookie jar . .

  • will294 - 2011-07-17 19:52

    The way things are going we will need a whole team of Public Protectors. Where will we possibly find sufficient people honest enought to fill the positions??

  • KFACTOR - 2011-07-17 22:43

    Many states have had to collapse before they could run efficiently, and corruption has been the root cause of the collape. RSA is not unique, it is still in Africa, despite what most South Africans would like to believe.

  • Sandy - 2011-07-18 08:40

    and the Tenderpreneurs get richer.....and build bigger houses...

  • York Hunt - 2011-07-18 09:24

    Thuli Madonsela must be very, very busy with all this corruption going on...

  • bryan hurd - 2011-07-18 09:47

    Looks like there is going to be no stopping this money crazy work hating bunch till there is NOTHING left,blame de klerk and our friends in the west as THEY KNEW this would happen,what a collectively rotten bunch.

  • York Hunt - 2011-07-18 09:57

    Hey FIN24. You need s new special section on your red banner above for corruption. You know like this: HOME - COMPANIES - MARKETS - ECONOMY - CORRUPTION - OPINION

  • Renaldo van Eck - 2012-02-27 19:42

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