Former ministers, MPs and top firms receive warning letter about unpaid rentals
Public works minister Patricia de Lille has fired off dozens of letters of demand to serving and former ministers and MPs, pleading with them to cough up millions of rands in unpaid rent for their taxpayer-subsidised homes.
De Lille is attempting to recover almost R8m from the MPs and ministers, which is a fraction of the R3bn owed to the department of public works & infrastructure, part of it by some of SA’s top companies and even government departments.
Her predecessor, Thulas Nxesi, sent similar letters to his colleagues in 2018.
The unpaid rentals came to light in reply to a question to De Lille in parliament by IFP MP Mthokozisi Nxumalo.
The Sunday Times has seen a list of debtors who include some of the big names in South African politics, including current and former ministers such as Nomvula Mokonyane, Fikile Mbalula, Bathabile Dlamini, Malusi Gigaba, Buti Manamela and Kebby Maphatsoe.
The Sunday Times has also seen copies of the letters — signed by De Lille — that warn of possible deductions from the debtors’ pensions. Some of the letters were addressed to Gigaba, Mokonyane, Dlamini and Maphatsoe. It is not clear if the letters were received as some pleaded ignorance this week.
Public works said De Lille sent the letters after correspondence from department officials was ignored. Some former ministers responded to officials and made payment arrangements.
Members of the executive are allowed to occupy two state houses, one in Cape Town and the other in Pretoria. Directors-general can request accommodation in Cape Town.
The members of the executive stay rentfree in one house and pay 1% of their salary to stay in the other.
Ministers, their deputies, directors-general and other officials pay their rental through a stop-order facility, though in some cases DGs prefer to pay rental (in some cases as little as R75 a month) by EFT for a full year in advance. It is not clear how they can default with debit orders in place.
The outstanding R3bn is money the government sorely needs, with budget cuts hurting society, notably in the squeeze on the public service wage bill and an apparent shortage of funds to meet the government’s commitment to free higher education for poorer students.
The nonpayment will also raise eyebrows because the rentals paid by public representatives living in state properties are nominal. For example, a property occupied by former deputy minister of sport Gert Oosthuizen, who owed R299,975, was let to him at a market rate of R30,000 a month when he left the executive. As a deputy minister, he had been asked to pay just R1,200. Oosthuizen has since settled his bill.
The biggest defaulters are government departments, state-owned companies, municipalities and big corporations. The department of correctional services alone owes more than R1bn. Corporations and private individuals together owe the state more than R1bn in rental fees. Among the big corporations that owe public works are telecoms giants MTN and Vodacom. MTN owes the department approximately R2.8m, and Vodacom owes R5.6m.
Public works acting director-general Imtiaz Fazel said the department’s CFO had recently issued demand letters to the CFOs of the telecommunication companies.
“Some of those companies are engaging the department. The department will be handing the matters over to the state attorney,” he said.
MTN spokesperson Jacqui O’Sullivan said: “MTN is aware of this matter, which relates to lease renewals that are currently with the department of public works for sign-off. MTN has full intentions of making the payments but is waiting on the department of public works to conclude its governance processes.”
Vodacom spokesperson Byron Kennedy said the network giant will “look into this specific matter”.
“Generally speaking, Vodacom pays rentals for a wide range of property, including for the purposes of building base stations to enhance customer experience through wider coverage and faster speeds. Vodacom will not unreasonably delay payments due and is committed to ensuring that it abides by contractual obligations,” said Kennedy.
The department claims it has not been able to recover monies owed by former min
I am hearing that for the first time from you … they should be making deductions for whatever it is Fikile Mbalula
isters, some of whom left office more than a decade ago.
But some of politicians named expressed surprise that they are on De Lille’s list, and some of the alleged debtors were up in arms, saying the department has never communicated to them that they owe money. They said if the public works figures are accurate, the fault lies in the department’s failure to deduct rent from their salaries.
Most said they are willing to settle their debt if public works sends them the bill. Former deputy minister Mcebisi Jonas settled his bill of R48,387 on Friday after receiving questions from the Sunday Times.
Of the almost R7.8m owed by ministers and ex-ministers and their deputies, MPs and top government officials, the department has recovered just R1.5m since De Lille started the recovery process.
Mokonyane and Maphatsoe denied having been made aware of their unpaid bills.
“I never received a bill,” said Mokonyane in a text response to questions about her R80,000 unpaid bill.
Maphatsoe said he was not aware that he owed R25,208 because the arrangement to pay rent, as he understood it, was that there were deductions from his salary through the ministry.
“When they arrange your salary advice, they also deduct that money that is supposed to go to public works … if indeed it’s true that they had not been deducting that money when I was deputy minister, if they did not deduct it, I will have to check with them why they did not deduct it. And I would not have a problem paying public works if the department did not pay it,” he said.
But the Sunday Times has seen copies of letters, signed by De Lille, addressed to Mokonyane and Maphatsoe dated 2019.
Mbalula, Manamela and sports minister Nathi Mthethwa all said they were not aware they have unpaid bills with the department.
Having left office in 2009, former deputy minister Aziz Pahad is said to owe the state almost R300,000. Ex-minister, Ngconde Balfour, is said to owe the state R8,700. Pahad could not be reached for comment.
De Lille said in parliament that the people and entities that are leasing properties from her department are doing so as a benefit provided for in various statutes.
In the case of properties occupied by user departments, the agreements are governed by the devolution framework as approved by the National Treasury. In her letters, De Lille pleads with former ministers to settle their bill or it would be deducted from their pension. However, after she dispatched the letters, she was informed by the Treasury that this was not allowed according to law.
Fazel told the Sunday Times that most of the debt referred to in the parliamentary question is historical.
In terms of process, public works has to inform non-returning members, ministers, deputy ministers, DGs and officials of their outstanding debt. “If there is no response and nonpayment, the department of public works & infrastructure must refer the matter to the state attorney to advise on debt recovery.”
Fazel said the recovery process for the use of state properties leased to public individuals and companies involves monthly statements that are sent to debtors, letters of demand issued as and when debtors default, and follow-ups before matters are referred to legal services for further action.
He said the recovery process that started when De Lille came to office in May 2019 had not fully yielded the desired recovery.
Fazel said stop orders for MPs’ rent are administered by both parliament and the department and that stop orders authorised by MPs are valid only for the duration of the MP’s tenure as an MP.
In some cases, after the stop order has ceased when an MP is no longer an MP, the department has difficulty tracing them.
Fazel said the responsibility is also with retiring MPs to check with parliament that there is no outstanding debt.
“These former MPs were provided with monthly rental statements during their tenure but still did not pay. Should they return to parliament and take occupation of a residence in the parliamentary villages, their new stop order would be reinstated only for the current rental,” he said.
Public works continued to send statements to the former ministers and DGs, but the challenge is that the department does not have their permanent residential addresses after they vacate state properties.
Approached this week for comment on why he has not settled his R8,782 bill, Balfour said: “That’s nonsense. I left government in 2009 when I finished my stint as minister of correctional services and I went to Botswana as high commissioner of South Africa and then I retired after that.”
Balfour said he was not aware of his debt. Deputy minister of human settlements, water & sanitation David Mahlobo (who is said to owe R68,632.07) declined to comment and referred the Sunday Times to the department of public works.
Mthethwa said he was not aware of his R42,000 bill and would take the matter up with public works.
Manamela, who is said to owe the state
R44,000, said he occupied a state house only in Cape Town and was therefore not subject to a rental fee. He said he would make repayment arrangements if the department had failed to collect money due to it.
Nkosohlanga Mboniswa, speaking on behalf of Jonas, said yesterday that the former deputy minister settled his bill after an inquiry from the Sunday Times. “After we spoke yesterday, I went to public works to inquire. After two hours they sent the invoice and then I asked Mr Jonas to pay.”
Mbalula said he had no knowledge that he owed R13,040.88. “I am hearing that for the first time from you. I will call my office to check what we are owing, because they should be making deductions for whatever it is,” said Mbalula.
Dlamini refused to answer questions about her R155, 000 bill, saying it was part of a campaign to tarnish her image.
Correctional services spokesperson Singabakho Nxumalo said his department’s facilities directorate is engaging with public works to get clarity on the amounts the department owes. “This also involves a portion allocated to the national commissioner [Arthur Fraser] as there are standard processes used in government to deduct such monies from officials,” said Nxumalo.
According to public works, the department of correctional services’ R1bn bill includes R594m for the current year.
“The client has been paying less than claimed amounts for the past two years, including the current financial year,” said Fazel. “The significant outstanding amount relates to rental for the use of state properties utilised by the department of correctional services.”
– Sunday Times