In September, Joburg mayor Dada Morero’s office had its electricity and water cut off by his own City when an ANC property cadre and city landlord did not pay his utilities bill on time.
Without council approval, the Metro Centre, the City’s service centre, was abandoned in spurious circumstances, and the mayor moved to a private building in Braamfontein owned by Bayete Capital, the company of Lonwabo Sambudla, an ANC-aligned property mogul.
When he tried to refinance the building, along with two other properties in which the council leases office space, Sambudla did not pay his bills and racked up debt of R22.1-million, according to a City document in possession of the Daily Maverick. The City is deep in the red and is on an enhanced debt collection drive to lower a deficit of R4-billion a month, as declared by Morero last year. Finances have gotten worse since.
Bayete paid most of the debt after the cut-offs, but the incident revealed how private property deals corrode the City and soak up money the mayor should plough into services such as water supply.
Officials and other sources told the Daily Maverick that three properties owned by Bayete and which house the mayor, the city manager, the transport department, the Johannesburg Roads Agency and other parts of the city administration had not been able to operate after the City cut electricity and water from September.
The Johannesburg Property Company (JPC), run by CEO Helen Botes, is at the centre of the story. Botes oversees the City’s property portfolio and also signs all private leases. Botes is an uber-powerful official, and like a cat with nine lives, has survived a series of adverse investigations related to the underwhelming management of an entity that owns and oversees 29,001 properties but still leases private properties.
“It is understood that when the landlord issues a rental invoice to the tenant, it is accompanied by the municipal services [statement] that should be followed by payment of municipal services by the landlord. This would then suggest that the City has effected rental and municipal services to the landlord yet the municipal services have not been settled which contravenes the signed agreement in care of JPC,” the City’s chief financial officer, Tebogo Moraka, wrote in a letter to Botes.
This means that the City paid Bayete even though it did not pay its utility bills, which placed the metro government at risk. The City also cut utilities to another landlord who rents to the City – Mutodo Properties, which owed R29-million.
“The City’s policy is clear that service providers should not be 90 days in arrears with the municipality. The City will first deduct the money that is owed for municipal services before paying the service providers,” said Kgamanyane Maphologela, spokesperson for the City’s Group Finance, when he announced the City’s plan to collect R1-billion in debt by the end of 2024.
“Landlords in arrears will attract credit control and where the City is inconvenienced as the occupiers of the property, they will pay the municipal debt and set it off against the rent,” Maphologela said.
JPC spokesperson Lucky Sindane said: “The water and electricity supply were cut at Sappi [the former Sappi building in Braamfontein which houses the mayor] and Old Mutual [the former Old Mutual building in town that houses transport and JRA] as part of the revenue collection drive, and the landlord [Sambudla] was in the process of refinancing their properties and needed clearance figures from the City.
“The process to obtain clearance figures was delayed and arrears were incurred. The landlord made full payment as soon as they received clearance figures,” Sindane said.
“As part of the City’s aggressive cut-off operation in September 2024, whereby Bayete Capital, who was part of those targeted customers, paid a substantial amount to reduce its debt. The City can confirm that the company is paying its current debt,” Maphologela said.
According to a Bayete Capital statement, “the disconnections were the result of a misunderstanding that occurred during an ongoing refinancing process. As part of this process, we requested clearance certificates, and discrepancies in amounts due were identified. These have since been resolved, and all properties were reconnected.”
Daily Maverick visited the properties affected by water and cut-offs in November. The City said bills still had to be paid when disputes arose while queries were logged and investigated. The dispute arose from a vandalised water meter, Bayete said.
City of Joburg dusty reception. (Photo: Shahdia Johnson)
(Photo: Shahdia Johnson)
Joburg owns 29,001 properties – why rent?
The bigger question this raises is why the City rents expensive properties when it is in the red and has a portfolio of 29,001 properties valued at R10.2-billion, according to its most recent report.
The mayor and all the City’s staff, from its legislative, executive and administrative arms, moved out of the Metro Centre under a contested scheme to prepare for the refurbishment of the building.
City officials have since abandoned the 15-floor Metro Centre, though it is still fully furnished and equipped with printers and other unused equipment, and likely worth hundreds of millions of rands.
Residents, developers, lawyers and service providers have no central hub in one of Africa’s leading cities. Instead, officials are scattered across private buildings without clear communication on who is where.
In December 2023, Daily Maverick reported that the JPC was trying to ram through a deal to empty the Metro Centre for between five years or nine years and 11 months, costing R900-million, possibly rising to R2-billion – money the City does not have. Leases under 10 years do not have to be registered with the deeds office, so you can’t see who benefits from the lucrative deals.
While the decant and refurbishment of the Metro Centre were contested in council as too expensive and unnecessary, they have gone ahead. Asked if the Metro Centre had been emptied of staff, JPC’s Sindane said: “Yes.”
Bayete Capital had proposed a massive and expensive refurb of the Metro building through a private-public partnership (PPP). “The PPP is registered with the National Treasury, and they are in the process of appointing a transactional adviser,” Sindane said. However, the PPP does not appear to have been approved by the metro’s council, as it must be.
News24 reported here how Sambudla previously won lucrative deals with the JPC but did not deliver.
Asked about the cost of the private leases to temporarily house staff, Sindane said: “Late last year, we had about 13 [applications for] requests for proposal for office accommodation. It takes 15 months to conclude; some agreements have been concluded, and we are busy finalising the balance.”
He did not provide the cost, but said: “We remain committed to maintaining open communication throughout this process, and we will keep the public and stakeholders informed of further developments as they arise.”
The JPC promised this a year ago and has yet to communicate publicly.
The ANC effectively runs the JPC board in Johannesburg, where Botes is a party member. It is stacked with deployed cadres from the chair, Simon Motha, who is deputy chairperson of the ANC in Johannesburg, and six others, according to a Daily Maverick audit of the board.
The images of the Metro building show that while the JPC says it is hazardous, many parts seem to be habitable. However, the adjacent municipal information service building has been gutted by fire and equipment removed by cable thieves and vandals.
The vandalised and burnt-out interior of Johannesburg’s Management Information Services offices. (Photo: Shahdia Johnson)
The exterior of the offices that used to house Johannesburg’s Management Information Services. (Photo: Shahdia Johnson)
Management Information Services bricks. (Photo: Shahdia Johnson)
Management Information Services building. (Photo: Shahdia Johnson)
Complete response by Bayete Capital
“Bayete Capital wishes to address recent events concerning service disconnections at specific properties under our management.
The disconnections resulted from a misunderstanding during an ongoing refinancing process. As part of this process, we requested clearance certificates, and discrepancies in the amounts due were identified. These discrepancies have since been resolved, and all properties were reconnected.
“One factor contributing to the confusion was a previously reported vandalised water meter at one of our buildings. The meter had not been repaired despite notifying the relevant authorities, and billing was based on estimates. When applying for clearance certificates, it became evident that readings were required, leading to further delays. The matter was resolved by replacing the water meter and settling the clearance certificate amounts fully.
“Bayete Capital remains committed to maintaining open communication with all stakeholders and ensuring the smooth operation of our properties.” DM