PSA calls for probe into Gems hire of empty building

The Government Employees Medical Scheme 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 per month to Mowana Properties for its North West regional office in Borekelong House, in Mahikeng, since September 2017, without occupying it.

The rental expenditure has resulted in Public Service and Administration minister Ayanda Dlomo calling for an investigation into the matter.

Instead, Gems opted to rent office space from the Kobo Segole Guest House, which has allocated them the conference room at 29 Jan Smuts Avenue in Mahikengat, a cost of R31,000 a month.

Insiders said it had been categorised as “wasteful expenditure”, but no one had 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’ 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 September 1 2017.”

Dlodlo’s spokesperson, Mava Scott said: “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, those found guilty should be made to pay for this waste.”

The lease agreement between Gems and Monawa stipulates that during the first year of the three-year contract – September 2017 to August 2018 – the landlord would collect R53,000 monthly in rental from the tenant.

Mowana was entitled to R5,446 monthly rates collections and R1,500 for refuse collection every month, taking the overall total to R59,946 every month. Gems principal officer Dr Gunvant Goolab claimed Borekelong House remained unoccupied as it “needs to be refurbished and was up to now not ready for occupation”.

Goolab insisted “Gems intends to occupy the Borekelong premises before the end of this year”.