Joburg valuation crisis long in the making

The latest property valuation crisis in the City of Johannesburg has its roots – as Noseweek readers will know – in a dodgy tender contract awarded to the same company that messed up the valuation roll on an unprecedented scale just five years ago.

The city is finalising its 2018 General Valuation Roll, having updated assessments of nearly 900,000 properties. The new valuations, which directly affect property rates, will be effective as of 1 July.

At the time of Noseweek’s going to print Mayor Herman Mashaba stated that 8,000 properties had been over-valued and he had ordered these to be redone. Mashaba blamed the “independent municipal valuer” for the cock-up.

Meanwhile Gauteng Premier David Makhura also chipped in by saying “these rate increases will negatively affect the real income of families”. Some properties reported increases of between 20% to 100%. The roll is currently available for comment.

Both politicians have quickly forgotten that their respective political parties, when in control of the city, appointed the same “independent municipal valuer”, Evaluations Enhanced Property Appraisals – a known ANC-backed company whose past is anything but stellar.

Noseweek has reported on this issue for nearly two years (noses202; 203; 211; 212 & 215). 

When undertaking the 2013 General Valuation Roll, Evaluations made such a hash of the process that the ANC-led city objected to a record 71,552 over-valuations in poor areas, while at the same time – for some mysterious reason – it failed to notice that the company had also grossly under- (repeat, under-) valued a large number of properties belonging to the super-rich, some even being blessed with a zero rating. They ranged from the Rupert company properties, the Guptas (obviously), the Oppenheimers, the Sexwales, and the madly wealthy Douw Steyn, to the flash Sandton and Melrose Arch buildings of some of South Africa’s best-known mega-corporations.

It was only after Howick-based pensioner and rates crusader Dr Robert McLaren uncovered the ludicrously low prices, that some were revalued. McLaren, a stickler for fairness has now been banned by both the cities of Joburg and Tshwane from lodging any more valuation appeals, presumably because they find the under-valuations so embarrassing.

The DA-led council, has disingenuously claimed it had no choice but to appoint Evaluations. They claimed the tender process was started when the ANC led the city and any delay when the DA took over would significantly prejudice the ratepayer.

Evaluations’ winning bid was R99,9 million. But that was not the first tender issued for the contract. Nearly a year earlier the exact same tender had been advertised and closed in January 2016.

Then, Evaluations was the third-lowest bid, at R167,2m, but somehow Bid A654 was never finalised or awarded to the winning bidder, DPP Valuers (Pty) Ltd.

The tender lapsed, which resulted in its being re-advertised and – behold! – this time around Evaluations found it possible to shave R67,3 million off their original bid price, undercutting everyone else. 

One of the bidders who lost (but asked for his name to be withheld as the industry he works in is small), said it was “not surprising” that Evaluations was facing problems.

“Their price was simply too low. All the other bids were upwards of R144m because that is what it would have cost realistically to value all the city’s properties”. The city had budgeted R320m for the contract.

He said Evaluations was simply running on too lean a team and more problems were likely. 

The city has tangled itself in such a knot with its crooked valuations process, it is destined to cause financial, administrative and legal mess in all directions. Imagine the havoc in the city’s already chaotic rates billing department! We’ll keep you updated.

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