Mahlangu-Nkabinde blunders to cost taxpayer

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Blunders by the Minister of Public Works, Gwen Mahlangu-Nkabinde, in two police lease scandals could reportedly cost taxpayers more than R1 billion. The Sunday Times reports she faces dual legal demands from Nedbank and businessman Roux Shabangu over the compromised deal to shift police headquarters to the Sanlam Middestad building in Pretoria.

Nedbank agreed last year to loan Shabangu R220 million to buy the building, which he was to then lease to the police in a R614 million deal struck with police commissioner Bheki Cele without following tender processes, the paper reported yesterday. Nedbank is now demanding to be repaid its loan, while Shabangu has started legal proceedings to recoup R1 billion from Mahlangu-Nkabinde.

Public protector Thuli Madonsela two weeks ago announced the lease to be “invalid” and the process to be “unlawful” and littered with “improper conduct”. She urged President Jacob Zuma to take action against Mahlangu-Nkabinde for reinstating the lease despite two legal opinions declaring it unlawful. The building now stands empty, but racks up costs of R3.3 million a month.

Nedbank is demanding Mahlangu-Nkabinde pay up after her department committed in writing to honour the lease shortly after she took office in November. “The Sunday Times has seen confidential letters her department sent to Nedbank,” the paper says. In one, dated November 25 2010, the department assures Nedbank that “the investigation of the public protector and the Special Investigation Unit will have no effect on the validity and enforceability of the lease”.

Shabangu said on Friday he had hired “the best lawyers and advocates in the land” to recoup more than R1-billion from Mahlangu-Nkabinde for “defaulting” on the lease and had already served letters of demand. “Now we’re hitting them. Government has been caught with its pants down,” he said. He claimed Mahlangu-Nkabinde’s department offered him a R50 million settlement to walk away last year.

Taxpayers narrowly avoided being liable for a second lease deal involving Shabangu worth R1.16 billion for police headquarters in Durban. That fell through when Shabangu failed to get bank guarantees. Madonsela’s report found the rental amounts for both leases to be vastly inflated.

The Presidency Friday said it is “currently attending to the contents of the report”. In a statement President Jacob Zuma’s office said he has to, amongst other things, “engage with the Minister of Police, Nathi Mthethwa and … Mahlangu-Nkabinde on the content. In dealing with a matter of such seriousness, it is imperative that due process be followed.” Zuma, himself, has yet to comment.