Metro staff in R31m land scam

Meyersdal Nature Estate

Ekurhuleni metro officials have sold themselves dozens of parcels of municipal land in dodgy deals since 2004 that cost ratepayers millions.

Reports on an independent investigation into the deals were handed to an Ekurhuleni council meeting in Germiston on Thursday. Discussion was deferred until next week.

The metro may have lost "a minimum of R31-million" on land deals in the Meyersdal nature area alone, metro manager Patrick Flusk said in a summary of the reports.

"This can be considered irregular expenditure," he said, which must therefore be reported to the Auditor-General, the Treasury and the police.

The metro is paying R7,5-million to try to unscramble the deals

Flusk has started disciplinary action against municipal officials, and three have resigned. Another three who were implicated also resigned.

In 2006, an anonymous tip-off to the national anti-corruption hotline warned authorities to take a closer look at a land swop in which the metro traded land in Meyersdal for farmland from a developer.

The developer later turned the land he got from the municipality into the Meyersdal Nature Estate, and the tip-off noted that the land Ekurhuleni handed over was grossly undervalued.

In August last year, Flusk hired Pasco Risk Management to investigate.

Flusk said there was "a concerted attempt to frustrate the process, which includes intimidation and threats" to him.

Pasco reported that:

• Since July 2004, the metro's land alienation policy was not in line with the law. Since then the metro has alienated at least 1 330 erven with a minimum value of R202-million. This includes 306 transactions, worth at least R77-million, which need "thorough investigation".
  
  
• A metro councillor and 162 municipal officials bought some of the land, losing the metro at least R35,5-million in just three of these deals.
  
  
• There was "poor, negligent or incompetent administration" and "evidence of large-scale, systematic non-compliance" with metro policies.
  
  
• The metro's corporate affairs portfolio committee, chaired by councillor Mahomed Akoon and including councillor Neil Diamond, who benefited from some deals, decided what land to sell, while the sales were done by the metro's legal and administrative services department.
  
  
• Officials and councillors used their positions to "manipulate and abuse" the system to get development rights over land in Meyersdal.
  

Pasco recommended action against some councillors and officials, possible criminal prosecutions and an overhaul of the land development process.