SAAME Building Renovation Project allowed to Balloon to over R217 Million under ANC watch
by Cllr. Tebogo Masenya — DA Spokesperson for Infrastructure and Real Estate Services in Ekurhuleni
Date: 30 May 2023
Release: Immediate
Type: Media Statement
The SAAME Building has stood as a white elephant in the City since construction began almost 6 years ago. Despite millions of Rands being pumped into the project, it seemed like the project was going nowhere with work standing still for months without progress.
When the DA took office in November 2021, one of the priorities was to get the SAAME building to a point of completion.
In May 2022, R37 million (R37 880 000) was allocated to the project in the Medium-Term Revenue and Expenditure Framework (MTREF) for 2022/23 to 2024/25 (budget) and upon inspection of the building, the former Executive Mayor, Alderman Tania Campbell was given a completion date of June 2023. At the time of this allocation, the DA was of the knowledge that the project had a mere R90 million injected into it, which included the initial total project estimation of R30 million. Although funds were allocated to the project under the watch of the Multi-Party Coalition, former Executive Mayor Campbell saw it fit to report the project to the Special Investigations Unit (SIU) for investigation due to the numerous project delays and the inexplicable escalating costs.
After the appointment of the new contractor, the project accelerated, and in a matter of only a few months, the empty shell of a building started to form into the artist’s impression posted on the billboard in front of it (See below images). This raised more alarms as the new contractor appointed under the watch of the Multi-Party Coalition was seemingly able to do more with less and within a shorter period, as opposed to what that which was done by the contractors and consultants which were previously appointed.
On the 25th of May 2023, Democratic Alliance (DA) Spokesperson for Infrastructure, Cllr. Tebogo Masenya asked Oral Questions in Council regarding progress on the upgrade of the SAAME Building in the Germiston CBD and was shocked to find that the project was over R200 million over budget, far beyond the estimations of the DA.
When asked when the building would be completed, the MMC responded with an extended deadline of 30 September 2023.
When asked what the initial projected/cost (total) of the Construction Project was when the project was first initiated versus the actual cost (current total cost), the MMC responded with a total cost of R217 million (R217 908 499.95), of which R57 million (R57 693 704.47) fees and R160 million (R 160 214 795.48) was contractor fees.
When asked what the main reasons behind the delay in the construction/ completion of the SAAME Building were, the MMC responded with the following reasons:
- Flagrant construction violations when the building was originally built;
- Various Designs and BOQs were prepared based on provisional sums and assumptions;
- Highly complex architectural and structural engineering components;
- No waterproofing in the basement (caused water ingress);
- Contractual dispute with DBSA and closure of site;
- Covid-19 National Disaster/ Pandemic and delays in delivery of materials;
- Lack of skilled and inexperienced labour (poor labour quality);
- Late payment to contractor and consultant (delays in production as a result of cashflow issues);
- Appointment of new contractor and consultant (delays in SLAs and design review);
The DA is shocked that the department did not provide adequate project management and that the costs of the project were not managed. It is concerning that the department has allowed the project to balloon from R30 million to over R217 million in just under six years. What is more so concerning is that the MMC for Finance, Cllr. Nkululeko Dunga, allocated an additional R46 million (R46 444 474) to the project in the Budget Address on the 25th of May 2023, despite the project already being over R200 million over budget.
We will be following up with the office of the current sitting Executive Mayor, Cllr. Siyuvile Ngodwana, to determine whether the SIU has responded to our request for an investigation and will be awaiting the outcome of the investigation.
The DA in Ekurhuleni has always remained firm in its resolve to close the taps of corruption to the ruling EFF and the ANC. During our tenure in government, we introduced numerous cost containment measures to prevent the wastage of financial resources and to curb maladministration and fraud. While in opposition the DA was active in holding the executive and administration accountable for irregular and wasteful expenditure and has been vocal about deplorable quality of service delivery. We are determined to see corrupt acts and their actors stopped in their tracks and prosecuted. Corruption cannot be swept under the carpet, and even our current position in Council as the opposition will not stop us from fighting against irregular and wasteful expenditure and acts of corruption. Left to their devices, the EFF and ANC will ensure the collapse of service delivery and of Ekurhuleni as a whole.
The DA will continue to put pressure on the administration to ensure that this project is completed within the given financial and time constraints. We will not sit by with arms folded and allow corrupt individuals to abuse state resources and use taxpayers’ money as a platform to enrich themselves.
Media Enquiries
Cllr. Tebogo Masenya
DA Spokesperson for Infrastructure and Real Estate Services in Ekurhuleni
083 986 4286
