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KZN’s R275m rent bill mostly goes to Indians and Whites

Durban – White and Indian South Africans own 80% of buildings the KwaZulu-Natal government rents.
That’s according to Ravi Pillay, the provincial MEC for Human Settlements and Public Works.

He said the provincial government spent R275 million a year leasing buildings from private landlords and the ownership patterns reflected where wealth in the province lay.

“This pattern is simply politically, socially and economically unsustainable,” he said.

Pillay was talking to the Daily News after reports that the KZN government wanted to exclude certain blacks (coloureds and people of Indian and Chinese origin) from BEE deals worth more than R50 million.

“After applying the legal framework which defines black, and provides for 80/20 and 90/10 points allocation for companies bidding for a government contract, whites and Indians are still the majority landlord beneficiaries.

“There is a need to level the playing field,” Pillay said.

To do this, the government is thinking about ensuring that, on all new leases, the successful bidder should be at least 51% owned by a black African.

“Whites and Indians who own buildings must seek partnerships with black Africans to maximise their chances of winning tenders in terms of the criteria we are setting,” Pillay said.

He said the government needed to find ways to incentivise black African property owners through its empowerment funds, and banks needed to do their bit to help fund emerging black African property owners.

After perceptions that Indians were getting a disproportionate number of tenders, government convened the 2015 Procurement Indaba.

An analysis of R1.3 billion worth of government tenders showed 34% of the tenders went to whites, 32% to Indians and 30% to black Africans.

“This should not have been a crisis but it showed a regression from a previous study a few years before which showed black Africans benefited from 38% of tenders,” said Pillay.

“One of the key resolutions of the indaba was that government procurement should strive to achieve a 60% black-African beneficiary profile.

“That’s not excluding whites, Indians and coloureds because combined they make up 13% of the population in KZN and have the remaining 40% to share,” Pillay said.

He said the government needed to look at how it could change the laws to get a different outcome, but in a “progressive” way.

Pillay defended the stance of Sihle Zikalala, the KZN MEC for Economic Development, who is spearheading the move to “reshape” the BEE policies to benefit black Africans.

Pillay said Zikalala was “truly committed” to social cohesion because he was removing a threat to social cohesion.

“We must deal with these matters in a way that does not polarise society.”

Several opposition parties have criticised the stance taken by the KZN government but Zweli Sangweni, the spokesman for the Mazibuye African Forum, said only laws could change the economic inequalities in KZN.

He said that, as things stood, black Africans would not succeed in government procurement.

“There are many buildings sold to minority groups by the government, leaving black South Africans out because of a lack of funding and government support.

“There is no government procurement policy which is meant to empower black (South Africans),” he said.