Gauteng Social Development Department Plans to Acquire Building for Homeless ShelterGauteng Social Development Department Plans to Acquire Building for Homeless Shelter The Gauteng Department of Social Development (GDSD) intends to invest up to R70 million in the purchase of a building in central Pretoria for use as a homeless shelter. However, leaked documents suggest that the department initiated the search for a building before determining its intended purpose. Building Considered and Rejected One of the buildings investigated was the former Protea Hotel, which the department initially considered for a homeless shelter. However, it was deemed unsuitable due to its location on a busy road and proximity to potential risks. The building was also rejected for use as a drug rehabilitation center. Irregular Procurement Process Alleged Sources within the department claim that the procurement process followed was irregular. The department typically informs the Gauteng Department of Infrastructure Development of its building requirements and the latter issues a tender. However, it is alleged that this procedure was not followed. Inflated Rental Cost The former Protea Hotel was initially quoted a monthly rent of R5 million, which was significantly higher than the market rate of R1.5 million. The owner of the building denies quoting the higher figure and emphasizes the need for proper procurement procedures to be followed. Current Shelter Conditions and Future Plans The current homeless shelter in central Pretoria is in a poor state and has been declared uninhabitable. The GDSD plans to relocate the shelter to the new building once acquired. Funding and Timeline The budget for the building purchase was approved in 2023/24, but the funds could not be utilized due to procurement delays. The department has requested the provincial treasury to transfer the funds to the current financial year. The GDSD maintains that the acquisition of an existing building is more efficient and cost-effective than constructing a new one. The department intends to prioritize the purchase and conversion of the new building to provide shelter for the homeless in Pretoria.
- The Gauteng Department of Social Development plans to spend up to R70 million on the purchase of a building in central Pretoria.
- The ministry spokesperson says the building is intended to house the homeless, but leaked documents show the ministry wanted to buy the building before deciding what to do with it.
- The owners of one building the department investigated said they never heard from officials again after they said they would not make any deals without a proper tender process.
The Gauteng Department of Social Development (GDSD) is facing a cash shortage and plans to spend up to R70 million on the purchase of a building in central Pretoria.
In the November 2023 medium-term budget, Gauteng Treasury allocated the funds to the department “for the purchase of a new building that will be converted into a homeless shelter,” GroundUp reported.
However, a document leaked to GroundUp shows that the department was already looking for a building before it was decided what it would be used for.
One of the buildings they considered was the former Protea Hotel.
It has two wings with 106 guest rooms, a reception, a large dining room, offices, a meeting room and a large kitchen with two cold rooms and a freezer. It also has a swimming pool and parking for 49 cars.
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After the Protea Hotel closed, the building was leased by the Department of Public Works on behalf of the South African National Defence Force.
A delegation from the Gauteng Department of Social Development, led by then Department Head Matilda Gasela, inspected the property in July 2023. Gasela left under a dark cloud in late April when her contract was not renewed.
Portia Nemathithi, acting manager of social work at the Department of Partnerships and Finance, said in a report prepared after the site inspection that the visit was carried out “to assess whether the building meets the norms and standards for shelters for victims of gender-based violence (GBV).
In her report, she said the building was on a busy road and that there was also a nearby hostel “which poses a risk to victims of gender-based violence”.
The report also shows that the building is less than 2km away from two existing shelters funded by the department. There is also a third GBV shelter in central Pretoria, while Gauteng needs GBV shelters in townships, informal settlements and hostel areas, including Hammanskraal, Soshanguve, Mamelodi, Mabopane and Ga-Rankuwa.
Nemathithi recommended that the former hotel should rather be “designated for a programme other than the Victim Empowerment Programme that could benefit from it”.
GroundUp has received reliable information that the department also considered using the building as a drug rehabilitation centre, but this was also rejected.
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Spokesperson Themba Gadebe told GroundUp that the ministry now plans to purchase a building “as a homeless shelter, in response to the provincial homelessness priority”.
According to sources at the ministry, the procedure followed is highly irregular.
They told GroundUp that the department normally informs the Gauteng Department of Infrastructure Development (DID) of the requirements for a building and provides a supporting business case.
DID would then tender it and the social development department would then inspect the buildings that were successfully tendered. According to the sources, this never happened.
The hotel is located on Strubenstraat, the same street as the homeless shelter that provides shelter to approximately 500 people.
The shelter is located in a dilapidated town hall in the city of Tshwane.
GroundUp reported in October last year that the shelter was filthy and neglected, and that residents were concerned about their safety due to drug use on the premises and a lack of security. GroundUp visited the building last month and found the situation unchanged.
Gadebe said the residents had to be relocated because the city and a police report had declared the shelter uninhabitable.
In addition to the former hotel, two other buildings in Pretoria were also inspected: the Fedsure Forum Building and the ABSA Towers, both on Lilian Ngoyi Street, Gadebe said.
The R70-million budget to purchase a building was approved in the 2023/24 financial year. But due to lengthy stock change management processes, “the budget could not be spent,” Gadebe said.
The department has now submitted a request to the provincial treasury to transfer the funds to the current budget year 2024/2025. The request for this is being processed.
Gadebe said the department “has taken the decision to prioritise the acquisition of existing buildings, rather than embarking on the construction of a new building, given the long construction period and high costs associated with developments on a green pasture”.
Inflated rent
During the inspection of the former hotel, which has been vacant for some time, officials from the department met with representatives of Khulemani Masingita Holdings, the owner of the property, Nemathithi said in her report.
“During the meeting, Khulemani’s representatives indicated that the monthly rent for the building would be R5 million and the purchase would be R60 million,” Nemathithi said.
The building is currently for sale for R65 million.
But Michael Nkuna, Khulemani’s sole director, said the “market rent” for the property was just R1.5 million a month.
“The building was previously rented for R1.5 million by the Department of Public Works for the Defence Forces, the previous tenants, who used it for their war academy,” he said.
He added:
I don’t know where the R5 million per month figure comes from.
“We were approached by (the social development department) and told they were looking for a building. We said we would not do a deal because the building had to be put on the market first and then we would decide whether to bid on it.”
“We have made it clear that the correct procurement procedures must be followed.”
“The (department) people who did the inspection said that someone from the government would call us. We said we were not interested until a tender was issued for the property. We heard nothing more,” Nkuna said.
