Is the Johannesburg Property Company the worst performing city entity?

Scores:
JPC – ?/5
Caxton – 1/5

The Johannesburg Property Company (JPC) has buried its head in the sand, choosing not to comment on allegations of fraud, corruption and financial mismanagement, ostensibly costing the residents of the City of Joburg millions, if not billions of rands annually.

Read more: The Irish Club in Linden needs JPC to be responsive to the community

Questions regarding alleged money laundering through the buying and selling of properties, R470m in Covid-19 irregular fogging contracts, and the potentially irregular Civic Centre refurbishment set to cost the city at least R2b, have been put to the entity, with no response received.

These and other issues are all linked in an apparent spiderweb of deceit and corruption with current CEO Helen Botes seemingly being a thread through it all.

“She is a cat with nine lives – despite all the allegations and findings against her she seems untouchable,” says Belinda Kayser-Echeozonjoku, DA Johannesburg Caucus Leader.

The size of JPC’s portfolio seems unclear, even to the city itself, with the JPC website claiming numbers ranging from 30 700 to 64 000 properties, in different places on the site. This begs the question, is a forensic audit needed?

The value of the property portfolio ranges between R8 and R10 billion, which again raises questions about how an entity with such means can be financially strapped if the books are being accurately kept.

The latest annual report on the JPC website is for the 2021/2022 financial year, making researching current data difficult when the entity will not provide information.

CEO Helen Botes

Helen Botes has seemingly relied on powerful political connections to keep her in her position, despite several extremely serious allegations having been levelled against her.

A city architect who spoke to Caxton Local Media on condition of anonymity said Botes should have resigned in shame over many of the issues raised against her over the years. “It’s like she is made of Teflon where nothing sticks – it is incredible.”

PULL Quote: She should be in an orange jumpsuit in prison.
Some of the major allegations that have been raised against Botes include:

• The Special Investigating Unit (SIU) found irregularities in the 2020 R470m Covid-19 sanitising and PPE contracts. These were dropped when the ANC + EFF coalition was formed. The SIU found evidence of financial misconduct against Botes, yet no action has been taken.

• The SIU further implicated Botes personally in the Usindiso building fire where 76 people lost their lives.

• She was briefly suspended in January 2023 over irregular payments worth millions but was swiftly reinstated when the current mayor, Dada Morero was first in the role after then-mayor Mpho Phalatse was ousted.

Martin Williams, Ward 90 councillor says, “Botes is a spider in a money-making web – she earns more than R3m a year and yet it does not seem to be enough.”

The renewal of her current contract has raised eyebrows across the board, with the DA submitting a request for investigations into the process followed.

Leah Potgieter MP and Deputy Spokesperson of Public Service and Administration says, “It is alleged that the JPC Board improperly approved a five-year contract extension for Botes, bypassing the legislative requirements for senior management appointments within municipal-owned entities.”

While Botes seems untouchable, the tide may indeed be turning. Julia Fish, head of JoburgCAN, an Outa initiative, says, “City Manager Flloyd Brink has stopped Botes’ contract from being renewed for another five years, but nothing is certain at the moment.”

She says city assets like buildings, old-age homes and parks, which are not maintained have a massive effect on decay across the city.

Deaths at the hand of JPC

“The board of directors of the JPC must consider taking appropriate action against Ms Botes,” said retired judge Sisi Khampepe’s report that investigated the deaths of 76 people when a fire broke out in the Usindiso building in the CBD over a year ago.

She said the disregard for proper maintenance for several years prior made the building susceptible to the deathly blaze.

She said the JPC must face a thorough disciplinary process to look at evidence of contraventions concerning its obligations of property management. Had this been done, the tragedy could have been prevented as the group had been aware of the state of the building from as far back as 2019.

Williams says, “To date, neither the board nor the council have taken action against her as was recommended – because she is protected by someone or several people. It can be the only explanation.”

In August this year, a further four people died in a blaze in another hijacked building in Jeppestown.

Kayser-Echeozonjoku said, “How many more people have to die because city buildings are not maintained? The private sector who are willing to get involved or buy some properties say it is so difficult. One must wonder if is this deliberate to keep them out?”

Heather Dodd is an architect who said, “If you are not actively involved in managing a building you make it easy for it to become hijacked. If JPC is unable to cope, why do they not make it easy for the private sector to take over? Mismanagement of properties is a central theme of JPC.”

She describes different levels of hijacking.

“Some buildings are abandoned, and a few people move in as squatters, others are criminal syndicates who hijack buildings and make a fortune. Of the 400-odd people living in the Usindiso building who were maybe paying a few hundred each to live there, that is an absolute gold mine for the unscrupulous ‘landlord’.”

Where does the money go?

Kayser-Echeozonjoku questions where the money coming from JPC rental agreements and other money-earning contracts go.

“With at least 32 000 properties, many of which should be paying the city for rent, the income should be substantial. But when one looks at how poorly JPC maintains properties including sports clubs, halls and recreation centres, it is as if they are bankrupt.”

“Every year community buildings are left to decay and become dilapidated due to no maintenance and every year JPC is given a budget without records of income and funds generated through the properties. With property estimates reaching upwards of R8b, it is unclear why the company is struggling financially.”

JPC sold a property for R1

Questions were asked about a large Soweto property on Erf 2615 that was allegedly sold to a private company for R1. JPC is said to want to buy it back without any improvements for up to R45m.

Council chamber refurbishment scandal

The heart of local government is the council complex in Braamfontein, yet the city is spending millions renting alternative office space after ‘structural defects’ were discovered. Repairs are set to cost no less than R2b. Some estimates put the figure much higher though.

There seems to be some debate about whether the issues were severe enough to warrant the drastic move. Due to the lack of response from JPC, we were unable to scrutinise any engineering reports as requested by those critical of the move.

Andrew Marais, PR councillor in wards 45, 47, 48 and 129 says the closure of the complex is outrageous.

“The engineering report highlighted two fairly simple problems which could have been dealt with quickly and without much interruption to council and other arms of the city.

1 – Level A parking garage: some of the garage columns had become weakened due to water damage. The roof does not support any structure so the area could be easily closed off while repairs are carried out.

2 – The granite cladding was falling off the walls in some places. That too, he says, can be removed and replaced without much interference to city employees.

Kayser-Echeozonjoku says, “We need to get sight of which contractors have been appointed to carry out the work to check the paper trail to see who is benefitting from this job. The same is true for the rental properties.

Also read: Public land in Joburg being developed through JPC

Allegations have also been levelled against JPC and possibly some individuals regarding a large property along Beyers Naude for paying up to R50m to have their rental agreement lengthened by 30 years which is highly irregular.

Justin Jones, a former town planner, is outraged by the JPC and how it carries out its important mandate.

It feels like almost every single deal that the JPC has done has been irregular.

He says the central issue is people not being held accountable for funds generated and it should be, ‘for the benefit of the city and its inhabitants’.

Also read: Berario Scout Hall roof collapses after neglect by JPC

Important properties allowed to decay

• Old library building in Halfway House in Midrand
  This has become a drug den in recent years. A community member, who requested not to be named for fear of victimisation by the drug dealers, claimed that drug addicts bought drugs in the building and used them inside.

  

PHOTOS SPHIWE
The building is apparently out on tender now but why was it abandoned?

• Parkhurst Bowls and Soccer Club
  The illegal occupation of the site by waste reclaimers and those sleeping rough turned the venue into an informal settlement which locals say has led to an increase in crime and grime in the area, including of the nearby spruit.

  

Only last week after years of pleading has the site been cleared following a successful tender being awarded for a mixed-use development.

“Why did it take so many years for JPC to award a reputable company via a tender? Why, like so many buildings, are they allowed to degrade to such an extent and be destroyed? It has taken so much effort and energy by many role players to pressure JPC to act.”

Mary Gillett-de Klerk from the Johannesburg Homelessness Network said previously, “It is ridiculous that the city has so many properties it has allowed to go to rack and ruin when shelter is desperately needed for the homeless.”

She also bemoans that council-owned land and buildings are being used for private gain when residents of the city need social services more than ever. This is particularly important as the city’s largest shelter on Kotze Street was closed almost a year ago.

Of the 1 000 city homeless shelter beds catering for an estimated 20 000 homeless people, there are now 350 fewer

• Scout hall in Berario
  The Scout Hall in Berario was abandoned by JPC which led to it being used by people informally. Two years ago, the thatch roof caught fire and the structure became unsafe. To date, nothing has been done to either demolish or repair the site which can no longer be used for the benefit of the local community.

  

  PHOTO

• Rissik Street post office
  The building was erected in 1896 and has caught fire twice and was abandoned. It is unclear what the way forward is for this beautiful old building in the previous heart of the city.
• Johannesburg Library
  Despite calls from civil society and other bodies such as the Johannesburg Heritage Foundation, nothing has been done to reopen the library which has been closed since 2020. There are whispers that plans are underfoot to reopen in the next year if structural faults are fixed, but don’t hold your breath Jozi.
• Soweto Square
  The heritage site and home to the Hector Pieterson memorial has been left to wrack and ruin says Kayser-Echeozonjoku. “It used to be such a beautiful space, but JPC and provincial government have not done any maintenance or upkeep. It was a real tourist destination but not anymore sadly – it is just filthy.”

  

She says sites like this should be for the benefit of residents of the city but are destroyed over time.

JPC mustn’t hide behind laws that make evictions difficult – they should not be able to move in in the first place.

Jones estimates that there are more than 300 municipal buildings that have been hijacked. “It is a shame that this can happen. If there were proper oversight it would be difficult for people to move in to live or use as a business premises.

Outdoor advertising

JPC also oversees the outdoor advertising industry which brings in billions annually. It remains unclear where this money goes, and how the city benefits from it.
Kayser-Echeozonjoku questions where the money is going, as it is not, in her words, being used for the maintenance of public buildings and spaces.

Williams alleges that JPC has made a certain law firm the recipient of the outdoor advertising income, which has been reported to amount between R50m and R70m per month. This firm enjoys a 25% (ex-vat) collection fee on this money, before presumably paying the rest over to JPC. Why?
“People within the JPC must be making the money because it does not go into the central pot as it should,” claims Williams. “A forensic audit needs to take place.”

Under Botes’s watch, Fish says, “The dysfunction of JPC impacts the overall ability of the city to fund itself. The money that should be coming in from outdoor advertising revenue alone would enable many Capex projects to be carried out and social welfare projects could have an impact. The dysfunction has to be stopped.”

JPC spokesperson Lucky Sindane was asked repeatedly for comment on this feature. Despite acknowledging receipt of our queries, no response was received.
JPC CEO Helen Botes was likewise contacted twice for answers on specific allegations. No response was received.

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Related article: JPCs developments add to the value of the City