Questions over R180 million plus DoD rent payments to Armscor

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United Democratic Movement (UDM) leader, retired general Bantu Holomisa, maintains all is not well with the rental lease entered into between the Department of Public Works and Infrastructure (DPWI) and Armscor for office space the Department of Defence (DoD) occupies in the Armscor building.

In an effort to establish the details of an agreement going back over three years, he wrote to Patricia de Lille as the responsible minister and Parliament’s Standing Committee on Public Accounts (SCOPA).  The former two-star maintains the lease, apparently issued in February 2019 and signed this January, was not a factor in “processing or affecting the processing” of about R180 million for arrears rent in “a minimum of two tranches”. This he sets out in his letter to De Lille and SCOPA chair, Mkhuleko Hlengwa.

According to the letter, Holomisa was informed Mosiuoa Lekota (defence minister from June 1999 to September 2008) “apparently” wrote to the then Department of Public Works “instructing” it not to pay rent to Armscor. This was because “he apparently could not understand why rent should be paid for a building owned by the DoD”. Armscor is listed as a public entity reporting to “the Executive Authority” (vested in the President of South Africa, currently Cyril Ramaphosa).

Armscor’s latest available annual report (2020/21) states, in part: “The Minister of Defence and Military Veterans (DoDMV) is the sole shareholder and the Executive Authority of Armscor”. In essence the SOE reports to the Defence and Military Veterans Ministry, making current minister Thandi Modise the responsible civilian representative of government while at the same time paying rental to an entity under DoDMV control. Four other public entities – the Castle Control Board, Office of the Military Ombud, the Reserve Force Council and the Defence Force Service Commission – are in the same position as Armscor reporting to Modise.

Holomisa further asks De Lille and the public accounts oversight committee to establish if “kickbacks” were paid for processing the arrears rental payments.

He also wants the Minister to inform him “to who the rent is paid and by whom” as well as “why did it take three years to sign a contract” with payments allegedly made on the strength of an unsigned contract.

Holomisa further asks who owns the Armscor building and wants to know why it took three years for a rental/lease contract to be signed. The building, occupying a prominent location immediately east of the N1 highway, also known as the Ben Schoeman Freeway, was purpose-built for the State owned defence and acquisition agency and is owned by it.

At the time of publishing Holomisa had not received response from either Minister de Lille’s office or the Standing Committee on Public Accounts.