Gems splashes on office space for rats and roaches to enjoy
It doesn’t seem as if the government agency plans on moving into the office it pays R60,000 rent for every month any time soon
The Government Employees Medical Scheme (Gems) has admitted to blowing hundreds of thousands of its members’ contributions to pay for an empty building for a year.
Gems has been forking out more than R60,000 a month to Mowana Properties for its North West regional office on the Borekelong House ground floor in Mahikeng since September last year without occupying it.
The rental expenditure has resulted in Public Service and Administration Minister Ayanda Dlodlo calling for an investigation into the matter.
This is the same office space that was vacated by the office of the premier in 2014.
Instead, Gems opted to rent out office space from the Kobo Segole Guest House, which has allocated them the conference room at 29 Jan Smuts Avenue in Mahikeng at a cost of R31,000 a month.
Insiders said that had been categorised as “wasteful expenditure”, but no one has been held responsible.
Mowana Properties on Friday confirmed collecting monthly rentals from Gems coffers as per the “legally binding” lease agreement between the two parties.
Company spokesperson Ignatius Sathekge said Mowana was not responsible for Gems’s failure to occupy the office space as, “the building should have been occupied by now”.
“The lease agreement was duly signed by both entities last year, for the lease commencement date of 1 September 2017. As per this agreement, the building was handed over to the tenant. We are not sure why Gems have not taken occupation of the building as of yet,” said Sathekge.
Dlodlo’s spokesperson Mava Scott said: “Our position is that no government department or entity can afford any form of wasteful expenditure, whether they are in a healthy or unhealthy financial position.
“This is why, if the alleged wasteful expenditure is proven against Gems, the minister will instruct the board to institute disciplinary measures once an investigation finds this allegation to be true and those found guilty should be made to pay for this waste.”
The lease agreement between Gems and Mowana stipulates that the landlord, during the first year of the three-year contract – September 2017 to August 2018 – will collect R53,000 monthly rental from the tenant.
Mowana was entitled to R5,446 monthly rates collections as well as R1,500 for refuse collection every month, taking the overall collection to about R60,000 every month.
Meanwhile at the guesthouse, where Gems employees are operating from, the scheme has been paying R62,700 including rental, storage and service fees to the agent every two months.
Gems principal officer Dr Gunvant Goolab said management was aware of this, and had since delegated chief financial officer Karyna Pierce to “ensure that it is resolved as soon as possible”.
Goolab claimed Borekelong House remained unoccupied because it “needs to be refurbished and was up to now not ready for occupation”.
He, however, did not give reasons why Gems signed and paid for office space that was “not ready” for a whole year.
“The scheme acknowledges and accepts that the process to get the building ready for occupation has taken significantly longer than had been anticipated, but Gems intends to occupy the Borekelong premises before the end of this year," he said.