Cape Town mayor Patricia de Lille orders probe into auction of prime plot
An allegation that the foreshore site was undervalued by as much as R140m causes a row and prompts Growthpoint to defend the deal
Cape Town mayor Patricia de Lille has ordered a forensic investigation into an allegedly botched auction of a prime piece of land in the city.
Site B on the foreshore was sold in 2016 to JSE-listed property giant Growthpoint Properties for R86.5m.
With organisations representing the poor constantly complaining that the city favours wealthy developers, an alleged R140m undervaluation of the land before the auction created a massive row.
There were allegations that the land had been severely undervalued and this resulted in a loss for the city, De Lille said.
'More than fair price'
Growthpoint CEO Norbert Sasse said on Sunday the company believed the price it paid was more than fair.
De Lille said that following "a barrage" of media reports related to the auctioning of Erf 165639 in September 2016, she discussed the matter with city manager Lungelo Mbandazayo.
"I wrote to the city manager to express my concern at this alleged loss of public funds and also stated that the city could also run the risk of an audit query from the auditor-general or as a result of a member of the public reporting the matter to the public protector.
"In light of these concerns and allegations, and in the spirit of transparency and responsiveness, I have requested that the city manager initiates a forensic investigation into what exactly transpired in this sale process," De Lille said.
According to Ndifuna Ukwazi, a Cape Town nonprofit law centre that has been campaigning for affordable housing near the city centre, had Growthpoint paid a market-related price for the land, the city could have pocketed between R185m and R240m.
The organisation said the auction documents inaccurately stated the maximum floor area for the land was 17,500m², when it was nearly three times more.