ELIDZ spends R14m on old dilapidated factory

A building that the East London Industrial Development Zone (ELIDZ) bought for R14m in 2012 has become a white elephant.

The 11,900 hectare Waverley building in Fort Jackson, some 30 kms from the zone's trading radius of 5km, was bought “as is”, but the government entity said it was suitable for heavy manufacturing.

The purchase formed part of the ELIDZ's expansion plans beyond the industrial zone.

Immediately after the purchase, plans worth R34m were put in place to renovate the building.

The Dispatch was unable to ascertain whether renovations were approved as the ELIDZ refused to comment, saying the matter was sub judice.

A source who has an intimate knowledge of the project, told the Dispatch the purchase was a waste of state resources. He spoke on condition of anonymity.

The source said the purchase had been made just a few days before the end of the 2011-2012 financial year.

“As we talk about the other projects that are not finished by government in the Eastern Cape, the ELIDZ purchased a R14m property that was never used. The building is falling apart and they are doing nothing about it,”  the source said.

ELIDZ spokesperson, Sibusiso Ralarala said: “This relates to a matter that is sub judice and therefore the East London Industrial Development Zone SOC Ltd (ELIDZ) cannot make any comments on it.”

The Dispatch visited the site last week.

The building's roof has caved in and there was no tenant on site.

Sprinklers were broken and doors hung from their hinges while electric wiring in some areas had been ripped away.

The source said after the building had been purchased, it caught fire.

“The insurance company refused to pay as the building was already dilapidated, with a broken sprinkler system. The building was bought as is and that was a concern to some officials at the IDZ.”

The Dispatch has seen insurance documents from Hollard Insurance.

Hollard Insurance said in a letter to the ELIDZ: “We regret to advise, we at the same time confirm, that after proper consideration was given to the facts ... we are left with no choice but to reject the claim for the fire happening on 15 April 2015 at the risk address as stated in the policy.”

The insurance company highlighted that there was no water pressure in the grossly neglected fire reticulation system; the booster diesel engine to operate the water reticulation system was not working; there was no fire detection or alarm system as required and there  was no electrical compliance certificate

The Dispatch source said when the Fort Jackson building was purchased in early 2012, the valuators were called for a briefing session which was to be held on March 26 2012.

This call for a briefing happened although the ELIDZ had already sent a contractor to the same site three days previously to evaluate the building, he said.

“The call for valuators to come for a briefing on March 26 was just a formality as a person was already appointed and submitted an invoice on March 23. The same person visited the site in Fort Jackson on the same day. This factory was bought a few days before the end of the financial year and left us questioning the plans,” said the source.

March 26 was set aside as the date on which the valuators were to submit their proposals before being briefed. Subsequent to that, there was a date when they were supposed to submit their quotations and the tender would then be awarded.

ELIDZ CEO, Simphiwe Kondlo was only asked for the approval to appoint the valuator on March 30 — seven days after the work had already been done.