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AMABHUNGANE

Delinquent departments fail ‘disposable’ Phoenix Secondary School in Gauteng

Delinquent departments fail ‘disposable’ Phoenix Secondary School in Gauteng
Phoenix Secondary School, in Duncanville, Vereeniging, Gauteng. (Photo: Magnificent Mndebele)

Gauteng departments dithered for two decades over a school property they ‘erroneously’ sold to a politically connected business. They delayed action despite an expensive lease and a 2016 go-ahead to expropriate. Now matters are moving, thanks to sustained scrutiny from amaBhungane.

Major questions remain around how the Gauteng Department of Education (GDE) and Gauteng Department of Infrastructure Development (GDID) managed to dispose of a major asset in 2000, including a functioning school, and why they have failed to rectify the situation for more than two decades.

This is despite the fact that the land occupied by the school was sold for a mere R600,000 and that GDE is currently paying a rental of around R185,000 a month, nearly a third of what the landowner paid for the total asset.

A four-month investigation by amaBhungane shows that this is what has played out in the case of Phoenix Secondary School in Duncanville, Vereeniging, in the south of Gauteng.

In June 2000, the GDE via the Department of Development Planning (now residing under the GDID) sold off the school along with a 27ha land parcel that was auctioned for R600,000.

The final deed of sale was signed on 12 January 2001, but the transfer of the property only occurred in January 2006. The six-year gap is not explained.

The eventual transfer was to a company named Erf 4 and 6 Duncanville Vereeniging, whose directors are businessmen Muhammad Essop Dockrat, Firoz Saloojee and Bilal Dadoo, who took over from his deceased father, Abbas Mahomed Dadoo.

Phoenix Secondary School

Phoenix Secondary School in Vereeniging has been plagued by issues around land ownership with the Gauteng Department of Education. (Photo: Magnificent Mndebele)

Dockrat is a member of the politically connected family that owns the Sedgars group. The Dockrat family is reported as having been close to former Free State premier Ace Magashule and was also instrumental in helping fund a December 2016 Dubai holiday for ANC Secretary-General Fikile Mbalula and his family.

Dockrat’s lawyer, Raees Chothia, repeatedly denied there was anything untoward about the sale or the continued possession of the property by his clients. Chothia represents Erf 4 and 6 Duncanville Vereeniging as well as Sedgars.

Chothia told us his client simply offered the highest bid on a public auction and signed a valid offer to contract.

“To suggest that our client has surreptitiously acted arbitrarily or unlawfully in any manner, would be, with respect, a disingenuous attempt by the media to foist upon the public a misconceived narrative of and concerning our client…

“With respect, should the Gauteng Department of Education … aver that the school was erroneously auctioned with the rest of the land, or should they have felt in any manner aggrieved by the sale, it would have been incumbent upon them to notify our client accordingly and to have exercised the appropriate remedies available to them in law in order to rectify the transaction.” 

From 2006 to 2013, the deal appeared to be dormant and the school appeared none the wiser.

Then, in January 2013, according to a letter the school principal wrote to the department, the gates of the school were locked by the landowners who claimed the land was theirs. This, however, is an allegation the landowners deny.

“If educators were in fact locked out, the GDE would immediately be able to instruct the state attorney to bring an… application on an urgent basis to restore any interference with the GDE’s current undisturbed possession of the property,” said Chothia.

In his letter of 9 February 2022 – just one example from the school’s repeated efforts to reach out to the GDE – principal Andre Botha described what happened in early 2013.

Phoenix Secondary School

In January 2013, the gates of the school were allegedly locked by the landowners. The Gauteng Department of Education then began renting the property, entering into a lease agreement with the landowners. The department paid R1m in arrears and a monthly fee of R110,000. (Photo: Magnificent Mndebele)

“The lawyers of the Education Department came to the school and assured the principal that this matter would be resolved very soon. Needless to say, the department started renting its own building… for R110,000 per month at the time. As far as we know, the rent increased to R180,000 during 2019.”

Documents obtained by amaBhungane via the Promotion of Access to Information Act show that the GDE entered into a three-year lease agreement with the landlord, Erf 4 and 6 Duncanville Vereeniging.

The agreement was only signed on 5 November 2013 but was backdated to the beginning of the year. It reveals that GDE paid R1-million “in respect of arrear rentals” and a monthly fee of R110,000 (excluding VAT), escalating by 9% per annum.

The expropriation that never was

The records disclosed by the GDE show that as the 2013 contract neared expiry in December 2015, a decision was taken to begin the process of expropriating the land.

Former Gauteng Education MEC and now provincial premier, Panyaza Lesufi, wrote a letter on 27 December 2015 to then MEC of the GDID, Nandi Mayathula-Khoza, expressing the GDE’s frustrations and its intention to expropriate the property.

“The department is paying exorbitant amounts of rental which is not justified and far more than the market value of the property,” said Lesufi.

“I’ve instructed my officials to negotiate with the private owners to buy the piece of land where the school is situated. The private owners were not willing to sell and later were unreasonable and demanded a substantial amount of money which is higher than the market value of the property.”

In the letter, Lesufi informed Mayathula-Khoza that the landowners’ reluctance left them with no choice but to expropriate the property.

The expropriation route was widely endorsed and approved by several senior officials within the GDE.

“A case can be made that it would not be just and equitable to pay the full market value to the owner as compensation for the expropriation,” wrote the chief director of legal services and dispute management, Ntini Mtshizana, referring to the market value of the property estimated to be around R30-million in 2016.

In the documents released to amaBhungane by the GDE, there is a notice of intent to expropriate addressed to Erf 4 and 6 Duncanville Vereeniging (the landowner) that was signed by GDID MEC Jacob Mamabolo as well as a registered letter slip suggesting that it was delivered.

But there has been no further progress and the departments are unable to give a satisfactory explanation for why. 

Blame-game and excuses

“Unfortunately, the official at GDE who was leading the matter passed away and the State Attorney handling the matter also left the State Attorney’s office,” said the GDID when we asked about the status of the expropriation. 

“We do not have the information on how GDE finalised the matter.”

In response to the GDID’s attempt to attribute this failure to the death of the GDE’s senior legal adviser, the GDE’s chief director of infrastructure planning and property management, Hudson Baloyi, said this was just an excuse.

“The fact that somebody had left doesn’t necessarily mean that all the records that are with GDID would have not been available for anybody to follow through,” Baloyi said.

Phoenix Secondary School

Phoenix Secondary School, in Vereeniging. (Photo: Magnificent Mndebele)

“The running of that process is purely the responsibility of GDID. In other words, the MEC of Education would not have sent the request to GDID to expropriate if he had the powers to expropriate on his own.”

We asked the GDID – the custodian of state properties – why they failed to get back the land even though the GDE had officially issued a mandate in 2016.

“We were assisting them with the technical aspects of the case to draft the specification,” said the GDID’s chief director of communications, Victor Moreriane. He subsequently shifted the blame to the GDE.

“It was still their job as they are the ones who appointed the state attorney.”

Similarly, when asked to explain the decade-long delay, the GDE blamed the GDID.

“That question is best responded to by GDID. Remember, as the department, there is nothing much we can do, and the school must run. We don’t have an answer to that,” said the GDE’s director of legal services, Nombedesho Ngcobozi.

After 10 years of tiptoeing around the issue, the GDE’s head of department (HOD), Edward Mosuwe, told GDID HOD Thulani Mdadane that attempts had proved “fruitless”. 

As a result, the GDE has decided “to acquire the property rather than to follow the expropriation route as it’s unlikely to succeed”, said Mosuwe.

The records amaBhungane obtained do not explain why the expropriation was unlikely to succeed.

Could it be possible that the GDE is equally in the dark?

“At the expense of repeating ourselves, but that is the position,” Baloyi reluctantly admitted in a meeting with amaBhungane. “There is nothing that was given to us [to explain].”

The landowner’s version

The landowners claim the expropriation order was never served on them. 

“As far as our client can recall, it has never received a formal offer in writing from the GDE nor the GDID,” said Chothia. 

“If the expropriation process had commenced in 2016, surely by now the GDE would be entitled to the relief sought and there would be no basis for our client to refuse the sale.”

The landlord said it finds it “peculiar” that the GDE deems the lease to be exorbitant and or a wasteful expenditure. The lease agreement “was not unilaterally imposed on the GDE. It was signed by the GDE after our client and the GDE had negotiated the terms and both parties had reached a mutual consensus”.

Chothia said “the rental being charged is nominal, gratuitous and absolutely justified” considering the year in which they bought the property, the current market value of the property and the fact that they’re required to pay around R90,000 in levies and rates to the municipality.

We also asked the landlord to comment on Lesufi’s claims that they were either unwilling or unreasonable when the GDE attempted to buy back the land.

“Our client has requested documentary proof where our client expressed an intention not to sell. In addition thereto, our client has requested documentary proof where it unreasonably demanded a substantial amount of money,” said Chothia.

Who are the officials that Lesufi claimed to have instructed to negotiate with the landowners? Lesufi did not respond to our numerous requests for an interview.

The GDID said they were not involved in the negotiations that Lesufi cited.

Without ownership, no maintenance, no infrastructure 

Despite the 2013 lease running out at the end of 2015, the department simply kept paying the rent. According to one record seen by amaBhungane, this rose from R142,000 per month in January 2016 to R184,000 per month in January 2019.

The lease required that the “lessee shall not make any alterations or additions to the leased premises without the lessor’s prior consent”.

The GDE was also responsible for all maintenance and was required to keep the buildings in shape to be returned “in their original condition” at the end of the lease.  

Needless to say, the school could not convince the GDE to spend money on upkeep.

In March 2019, the former chair of the school governing body (SGB), JS Nkutha, wrote a letter outlining the problems.

Nkutha noted, “On numerous occasions the Department brought lawyers, inspectors, etc, to inspect the school. In 2014, the Department even came to collect the building plans of the school. Their plan was to buy back the school. They were never heard from again.

“I have taken upon myself to find out what is happening with this [expropriation] case. I phoned the legal department of GDE upon which I was told there is no current pending case.

“We had numerous problems in the past because of this land issue. When we were due to receive tablets and whiteboards, we were informed we are not getting any because of the land issue. When the matric teachers were due to receive laptops, we were informed we are not getting this because there is a land issue.

“The school also hired a civil engineer to determine the safety of the school building and we have a lot of issues that need urgent attention. According to the lease the department… is responsible for maintenance yet we are informed there is a land issue. Imagine our surprise to hear there is no ongoing case.”

In another letter sent to the GDE on 25 October 2021, the school principal and SGB chairperson, Stefans Tefo Molakeng, said: “Please take note that our bathrooms are in very bad shape and need urgent attention. No child should have to use a bathroom in this state.” 

Saloojee, one of the directors of Erf 4 and 6 Duncanville Vereeniging, called out the GDE’s failure to upgrade and maintain the property.

Their lawyer asked, “What steps were taken by the GDE in order to inform our client that it required the infrastructure to be improved and or repaired?”

We asked the GDE about its inability to upgrade or fix the infrastructure. 

The GDID should be the one accounting for upgrading the property, the GDE’s Baloyi, told us, passing the buck once more. 

“They should give you that policy on getting improvements done when government occupies buildings owned by private entities…. We carry the budget, but the actual rehabilitation is done by that other department.”

In September 2019 and February 2020, minutes show that representatives from the school held meetings with senior officials from the department. The plan was still to buy back or expropriate the school property, but the department had seemingly made no progress.

Instead, in March 2021 a new five-year lease was signed by Docket on behalf of the landlord, with Mosuwe representing the GDE. It is estimated that by the time the lease comes to an end in 2026, the GDE will have spent more than R32-million in rent – with no end in sight.  

How did the school find itself in this mess?

As an institution, Phoenix Secondary School was established in 2013. However, records in our possession suggest that the infrastructure has existed as far back as the mid-1970s. This is the period when Hoer Tegniese Skool (HTS) Vereeniging was still operational. HTS Vereeniging was an exclusively Afrikaans technical school.

In December 2012, HTS Vereeniging merged with Hoërskool Vereeniging to form the Gymnasium Hoerskool Vereeniging. It is this merger that opened a space for an English school like Phoenix, which has an enrolment of about 1,000 pupils.

We tracked down at least two of the five GDE senior officials who signed off on the disposal of the property in 1999.

We established that portion 12 of the Farm Duncanville, where the school is built, wasn’t the only property disposed of during this period. We also learnt that across Gauteng there were at least 42 more land parcels – whose status we didn’t verify – that the GDE earmarked for disposal at the time.

The then MEC for Gauteng Education, Mary Metcalfe and director of administration and buildings, Alan Moonsammy, said they were not aware that there was a school on the site when the land parcel was auctioned.

They were likely to have been misled by the unnamed district director who bore the responsibility for inspecting and authenticating the redundancy of the property before recommending it to be disposed of.

No one to account

But what role should the former Department of Development Planning and Local Government (now the GDID) have played before auctioning the property? Didn’t they equally have a responsibility to verify its status?

“GDID no longer has records of who conducted the site inspection prior to the property in question being auctioned,” said the GDID in a response on 7 June 2023. 

“Certain historical records pertaining to the 2001 auction are in archives. That being said, the current DID disposal mandate and practice requires that proper due diligence, which includes site inspection, must be done prior to any immovable asset being sold.”

The GDID emphasised the transaction took place before the current format for such transactions was in effect, and it therefore can’t necessarily be held accountable. If this is the case, what about the GDE?

The GDE admits, in its own records, that it apparently “erroneously auctioned” the property. But that doesn’t explain why the problem wasn’t picked up until 2013.

“If the GDE or GPG [Gauteng Provincial Government] was of the view that the school and sports field were not to be included in the sale, the obligation was on the GDE and or GPG to have taken the necessary steps to notify our client and rectify the transaction,” said Chothia. 

“Given that the property was auctioned subject to confirmation, why did the GDE and or GPG confirm the bid?”

A year later, the GDID is still ‘consulting’

In May 2022, to speed up the progress of reacquiring the school, the GDE gave the GDID four options to pursue with the landowners.

One, for the property to be donated back; two, for the landowner to be compensated with the original purchase price paid; three, for the purchase price to be the current market value as if the property were vacant. 

And if all these options failed, “as a last resort, for the purchase price to be the current market-related value of the property”. 

We asked how far the GDID was with these four proposals.

“GDID is still consulting internally on the matter,” it said in its response on 7 June. 

“Such consultation will include sourcing a legal opinion on the best approach, taking into consideration the history of this matter.”

If this tiptoeing continues unabated, the GDE is unlikely to ever recover the school.

In the past 10 years, the land quagmire the school is trapped in has passed through at least two GDID MECs, who have come and left, as well as two GDE HODs and one MEC, who is now a premier. Yet, all have failed to reacquire the property.

After much back and forth, amaBhungane has learnt that the GDID finally decided to act on the GDE’s proposal and has approached the landlord on 28 June to negotiate for the property.

“It (the GDID) requested our client to provide it with an offer within five working days,” said Chothia.

“It seems that GDID and GDE want our client to now make a proposal to them. If all our clients’ previous proposals were unreasonable and our client demanded substantial amounts, why would the GDID afford our client the latitude of making a further offer?”

Perhaps because of the persistent questioning from amaBhungane? We can only hope that the landlord does the right thing. DM

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