George Municipality withdraws claim against liquidated developer; accountability questioned

George Municipality has confirmed that it had to withdraw its claim for recovery costs of R10 million due to the owners, Neo Victoria Developments, being in a state of liquidation. Questions surrounding the sale of the property and its future were also a point of concern.

In a statement issued this week, the GOOD Party said it was deeply disappointed by the Municipality’s decision to withdraw its nearly R10 million recovery claim against the owners of the property where 34 workers were killed and 28 injured in last year’s tragic building collapse.

The municipality kicked back, stating: “The George Municipality wishes to clarify recent media enquiries and public interest relating to the liquidation of Neo Victoria Developments and the Municipality’s withdrawal of its claim for recovery costs. The property concerned is privately owned, and as such, any disposal, sale, or use of the property remains at the sole discretion of the owner or the appointed liquidator.

It added that the Municipality did not proceed with registering its claim, as the financial institution holding the bond is the preferred creditor.

Ntobeko Mangqwengqwe, Office of the Municipal Manager, explained: “The value of the bondholder’s claim exceeds the value of the property. Legal action against a liquidated company, using taxpayers’ money, is deemed to be irresponsible, fruitless, and wasteful because there is no guarantee that any money owed to the Municipality, as a concurrent creditor, will be recovered.”

The Municipality explained that it should also be noted that any outstanding municipal claims do not prevent the auction or transfer of the property from proceeding.

It said the Municipality’s Building Control Division confirms that any new owner who acquires the property may not continue with previously approved building plans.

“These plans are no longer valid and must be resubmitted for formal approval in terms of the National Building Regulations and Building Standards Act before any construction or development may proceed,” Mangqwengqwe stated.

“However, the property is privately owned and therefore not under the Municipality’s control. Any decision regarding the future use or disposition of the land rests with the owner or the appointed liquidator.”

Chantelle Kyd, GOOD Councillor of George, hit back, stating the decision painted a poor picture of liability for actions.

“This withdrawal sends the wrong message, that accountability is optional when it comes to powerful or well-connected property owners,” she said.

 "They(community) deserve to know why the Municipality would drop a legitimate claim for recovery costs, particularly when the same institution relentlessly pursues ordinary ratepayers for much smaller amounts. Furthermore, we join the community in calling for the Victoria Street site not to be turned into profit-making apartments, but rather to be preserved as a memorial site."

In September, the Portfolio Committee on Public Works and Infrastructure (DPWI) had not received the full forensic report, citing its "sensitive nature."

Committee Chairperson Carol Phiri stressed the urgency of a joint stakeholder meeting and a public participation process in George, stressing the lack of accountability and suggesting reluctance to pursue the contractor due to legalities.

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