DA awaits report on Transport’s Ocean Echo accommodation contract

By Pule Thole MPL, DA Northern Cape Provincial Spokesperson of Transport, Safety & Liaison:

The DA is waiting on the Northern Cape Department of Transport, Safety and Liaison for a report on the terms of its controversial contract with Ocean Echo for office accommodation.

This comes after the department admitted during its annual report presentation last week that, much to their chagrin, they are legally bound by the costly contract for another eight and a half years. MEC Martha Bartlett also conceded that the Ocean Echo building, on the corner of Phakamile Mabija and Lennox streets in the Kimberley CBD, is in fact her biggest nightmare.

According to the annual report for 2014/2015, the multi-million rand contract is valued at R88 099 562 and sees the department paying a monthly installment of R531 233 per month. The contract has a material leasing arrangement with an 8% annual escalation.

In response to my question to ascertain whether it would not be cheaper for the department to rather procure alternative office accommodation, the department indicated that they do in fact want to move out but before they can discuss alternative procurement, they first need to find alternative tenants to take over their lease because they are legally bound. The department further indicated that they are currently “managing the contract”.

The Ocean Echo contract has been the cause of a large chunk of the R29,267 million worth of irregular expenditure incurred by the department in the 2014/2015 financial year. According to the department, this was due to the Ocean Echo building not having been completed on time, which in turn resulted in them having to extend the contracts for their old office accommodation on a month to month basis.

The contentious 10-year lease with Ocean Echo was initially entered into by the department under the leadership of former Head of Department, Steven Jonkers, in spite of an instruction from then Minister of National Treasury, Pravin Gordhan, not to entertain the lease. At the time, this instruction was also ignored by former MEC of Provincial Treasury, John Block. Block has since been found guilty on charges of corruption, fraud and money laundering while Jonkers’ employment contract was not renewed when it came to an end in June this year.

It is increasingly clear that the contract with Ocean Echo has been entered into under suspicious circumstances and to the detriment to the public service.  The problem now is that millions of rands worth of taxpayer’s money continue to squandered on this dubious deal.

The DA will await a report on the contract from the department whereby we will scrutinize this costly transaction and come with proposals to the portfolio committee.

There is no doubt that an investigation is needed into the signing of this contract. We simply cannot tolerate a situation whereby money is unnecessarily lost on accommodation expenses at the expense of important transport and safety initiatives that could largely improve the lives of the people of the Northern Cape.