Response to allegations by Leader of the UDM

We have received media reports today indicating that the leader of the United Democratic Movement (UDM), Mr Bantu Holomisa, has requested the Public Protector to investigate the lease agreement the IEC entered into with its current landlord. We have not been contacted by Mr Holomisa or the office of the Public Protector in that regard but should their investigation proceed, we will co-operate fully with the office of the Public Protector (see report).

Without pre-empting the outcome of the possible investigation, in the interim we have decided to provide the following general information in the public interest and in the interest of transparency. The specifics will be provided to the Public Protector as and when required. 

- We required new and more spacious accommodation since the building in Sunnyside was over occupied to such an extent that ablution facilities could not cope, posing a health hazard. In addition we constantly had to rent outside accommodation for meetings and the like as even corridors were used as "office space." 

- We vacated our previous accommodation in Sunnyside during the course of September 2010, having taken occupation of the current accommodation on 13 September 2010. There was thus an overlap of rental payments for 18 days. The additional expenditure in that regard was formally sanctioned in advance by the Commission as unavoidable expenditure to provide time for the cleaning and restoration of the building we vacated after some 13 years of occupancy. 

- Our contract for the previous Sunnyside accommodation was formally terminated on 31 December 2010 after agreement with the landlord that the period from October 2010 to December 2010 would be rent free. 

- The Department of Public Works entered into a lease agreement for the building we vacated on behalf of another government department with effect from 1 January 2011. 

- As far as our present accommodation is concerned the following is of note:

In seeking new accommodation a request for proposals was widely advertised in the press. The requirements and criteria to be used in deciding the matter were part of the public advertisement. We, however, omitted to indicate upfront in the public advertisements that the 90:10 principal (90% price and 10% BEE preference) as prescribed in the Preferential Procurement Policy Framework Act (PPPFA), would be applied.

This is indicated in our financial statements for the previous financial year which have been audited by the Auditor-General. It must be emphasised that the prescripts were, however, correctly applied and that we accepted the highest scoring bid (which also happened to be the cheapest suitable option) that met the advertised requirements. We must also mention that we received a clean audit report from the Auditor-General for the previous financial year. 

The contract we entered into made provision for a so called turnkey solution and provided for the inclusion / installation of facilities that are not normally part of a rented building and for which the IEC would be responsible. This includes physical security elements, a generator, UPS, appropriate air-conditioning for a computer server room, computer cabling, raised flooring in the computer and training centres and the like. It would have been much more expensive to have had this work done post the completion of the building. The handling fee of 2% above actual cost is below market trends and was a practical and much more financially attractive proposition. 

The turnkey contract also provided for the acquisition of furniture for the new building. The furniture we used in our previous accommodation was mostly procured in either 1994 or during the period 1997 / 1998 and had long since had a book value of R1 per item. Due to their old age much of the furniture was either no longer serviceable or hardly serviceable and it was neither an economical nor practical proposition to move with it. The furniture that was still useable was transferred to a government department in terms of the applicable Treasury prescripts. 

The furniture we acquired was mostly purpose manufactured for the IEC to ensure appropriate quality and durability and contact was directly with factories, for example most desks have steel frames rather than the modern trend of glued wooden panels. Total handling charges on top of factory costs varied between 7% and 14.5% and were a cheaper alternative to paying ordinary retail prices where wholesale and retail margins add substantially to final cost. 

The facilities and assets referred to in the previous three paragraphs were acquired in terms of the provisions of our contract and with the IEC having complied with appropriate Treasury prescripts. Deposits were required on placement of orders and those deposits are the payments reflected prior to our occupation of the building. 

- Our records do not indicate a transaction or combination of transactions which amount to a single monthly payment to the value of R22.6 million or R26.9 million as alleged by Mr Holomisa. In fact the largest total monthly payment was R12.1 million during May 2010 when deposits were paid for furniture placed on order. 

- For the record it is indicated that over the last 14 months all payments to the Riverside Trust came to R88.746.806,47. Of this amount approximately R33 million was for rental, storage and parking as well as varying operating costs, including water, electricity, rates, refuse removal and maintenance and repairs - a monthly average in the R2.4 million range and R55.7 million was for assets. 

As already indicated, all documents relating to the Riverside Office Park will be provided to the Public Protector in the event she proceeds with an investigation. In the interest of transparency, Mr Holomisa and the media are also welcome to peruse these documents. 

Please note: Due to the possible investigation which the Electoral Commission does not wish to prejudice, other than this media release, no media interviews will be given or further comments made.

Statement issued by the Office of the Chief Electoral Officer, Independent Electoral Commission, Centurion, October 4 2011

Click here to sign up to receive our free daily headline email newsletter