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Thursday Sep 27, 2012

Government to cough up an additional R30m after land purchase blunder

The government will have to cough up an extra R30 million for land bought by the Department of Rural Development and Land Reform because it failed to pay for the land on time, racking up a bill of R85 000 a day in interest.

In 2009 the department bought 15 properties for land redistribution purposes in Mpumalanga for R200m. The money was, however, paid only in July 2010, after accumulating R22.7m in interest, which the department refused to pay.

After an order from the Pretoria High Court obliging the department to settle the interest, it appealed to the Supreme Court of Appeal.

Last week, the Supreme Court of Appeal handed down a ruling ordering the department to pay the initial punitive interest of R22.7m, as well as R6.8m in interest on this amount, and legal fees estimated at R2m.

The DA's spokesman on agriculture, Athol Trollip, called yesterday for an internal inquiry into the debacle.

The Supreme Court of Appeal said that thanks to the department's poor handling of the matter and its decision to appeal against the high court ruling, "the public purse is much the poorer... for as long as the purchase price remained unpaid, interest accrued at R84 931" a day.

"To that must be added the costs of what can only be described as ill-advised and morally unconscionable litigation," the appeal court said.

Department spokesman Mphati Sehloho had not responded to questions by deadline.

The Freedom Front Plus's (FF+) spokesman on land reform, Pieter Groenewald, said the court ruling confirmed his party's view that the problem with land reform was incompetence in the civil service.

"People want to blame the willing buyer, willing seller policy for the delay of land reform. It's not true," Groenewald said.

To speed up the process, he said the department needed to be cleared of corruption.

"[The] Freedom Front Plus feels those civil servants responsible [for the delay in payment] should be fired because they wasted taxpayers' money," said Groenewald. '

Trollip echoed this, saying it was "this kind of mismanagement that hinders reform, not the willing seller, willing buyer model which the department expediently employs as its scapegoat for failure".

Because of poor management and decision-making in the department, about R30m had been "unnecessarily leaked" from the public purse.

Trollip said arrangements to purchase land for restoration to dispossessed communities needed to be honoured in accordance with the terms agreed because land reform was a constitutional imperative "and a highly emotive one at that".

"The department should therefore tread carefully with the limited resources at its disposal to avoid exacerbating the challenges of an already fragile process," said Trollip.

Cape Times

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