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High rental of Gambling Board’s offices raises concern

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BARRY VILJOEN
>>barryv.observer@gmail.com

The Limpopo Gambling Board (LGB) currently pays more than R775 106 per month in rental for an office building that is leased from a company belonging to controversial local property magnate, Jimmy Kourtombellides. The area of the office space is 3 125 m² and 32 open parking bays are also rented at a rate of R171 per square metre, with 10% escalation, for both.
Langa Bodlani, Democratic Alliance (DA) Spokesperson on Economic Development, Environment and Tourism, says in a media release that at a recent portfolio committee meeting of the Department of Economic Development, Environment and Tourism (Ledet), it was revealed that the LGB is paying a staggering R605 000 per month (according to his calculation) to rent its administrative offices in the city. The lease started in 2013 at R500 000 per month and has an annual increase of 10% per annum.
“The lease agreement has a lifespan of 10 years and by the time that period comes to an end, the taxpayers would have paid R120 million. This is R70 million more than the National Gambling Board has contracted for its national head office in Sandton, Gauteng. If the Limpopo department would rather purchase the building it would cost R80 million. The choice by LGB to spend R70 million more than the entire National Gambling Board Head Office, and to spend R40 million more than purchasing the building is a blatant abuse of public funds,” says Bodlani.
According to Bodlani, the LGB is currently unable to conduct compliance audits on Limpopo’s gambling outlets because of financial constraints and says that the DA pushed for the department to explore all options including the purchase of the building or the cancellation of the lease and paying the penalty fee. Bodlani reckons that this will definitely be the more cost effective option and his opinion is that every effort to cut costs to save the taxpayers’ money, must be government’s priority.
Bodlani claims that the required lease space for the National Head Office of the Gambling Board was
714 m², yet the leased building is
1 800 m², at three times the going cost per square metre. “It appears that the Gambling Boards have become cash cows for greedy property owners, and the department is doing nothing to stop the waste of public money. The DA will probe this matter to get to the bottom of how the department agreed in the first place to bind itself to such an exorbitant rent,” says Bodlani.
Serobi Maja, Chief Executive Officer of the LGB, told Polokwane Obser-ver that the LGB Board entered into a lease agreement with Blue Chameleon Investments (Pty) Ltd with an option to purchase the building at any time during the duration of the lease period and that the current monthly lease is in fact R775 106,42. “This was after we have, as early as 2008, engaged into a proper tender process to invite developers to come forward with costed proposals to deliver a building that meets with our requirements. We are currently in discussion with the Department of Economic Development, Environment and Tourism to make funds available for the Board to purchase the building. We were assured at the commencement of the lease by the Public Works Department that the rental amount is in line with industry norms and standards. At the beginning of the lease period, the landlord indicated that the building could be purchased for R89 million, but due to budgetary constraints, it could not be purchased as yet,” said Maja.
Maja earlier said to Polokwane Observer that Kourtombellides is the owner of Blue Chameleon Investments (Pty) Ltd.
Kourtombellides could, at the time of going to print, not be reached for comment.