Tshwane in bid to enforce use of pre-paid meters

Tshwane in bid to enforce use of pre-paid meters

The Tshwane Metro Council is looking at passing a by-law compelling households to have pre-paid meters within three years to improve its revenue collection.

Agreeing on a three-year prepayment roll-out strategy at the monthly meeting, executive mayor Kgosientso Ramokgopa said the council should pass a by-law compelling every household to be have pre-paid meters.

He said the debt for municipal services (water, electricity and rubbish removal) stood at R3.9 billion.

"At the current rate the municipality is unsustainable. The installation of pre-paid meters will alleviate this problem," said Ramokgopa.

According to the municipality, the credit control measures are not yielding the results hoped for and the debt is increasing while projected revenue is dropping.

If the status quo remains, the projected revenue will decrease beyond the municipality's sustainability.

The council agreed that all accounts exceeding R3 000 over 60 days be changed to pre-paid meters and that pre-paid meters be compulsory for new electricity accounts for rented premises and residential dwellings with high tenant turnover.

All accounts where a tenant's premises cannot be accessed for more than two months or where electricity meters are installed

Tshould be placed on the pre-paid meter system.

Tenders for meter installation have been invited with five service providers, and a third-party vendor tender is in place for three years for the extended reselling of electricity at retail merchants, including petrol stations and spaza shops.

DA councillor Professor Duncan Baker said the rolling out of prepayment electricity was a welcome development.

He said: "Following problems with getting clarification as to (their) electricity accounts, many residents have indicated an interest in using such meters.

"The reasons include the avoidance of electricity account queries, as well as allowing them to monitor their usage."

Baker said the municipality should start a programme to roll out devices that can cut the power to geysers remotely.

"The older example is the ripple relay system.

"Today, this can be done effectively using radio transmitters and receivers. Blocks of users could have the geysers turned off selectively."

Baker urged the municipality to investigate this option, "before Eskom starts to charge exorbitant rates whenever our peak demands exceed a certain level".

"With this in mind, we are reminded that Eskom, those 'princes of darkness', are again warning of power cuts this winter.

"I urge the council to take the matter of demand side management seriously."

Hyprop total distribution up 7.3%

Hyprop total distribution up 7.3%

Half-year distribution growth 10.4%.

(I-Net Bridge) - The country's largest listed specialised shopping centre fund, with 12 directly owned shopping centres, Hyprop Investments (HYP,) has declared a total distribution for the year ended December of 383 cents per combined unit, an increase of 7.3% on the previous year.

The final distribution of 137 cents, together with the special distribution of 65 cents paid on 17 October 2011, reflects aggregate growth of 10,4% compared with the corresponding period in 2010.

Headline earnings per combined unit for the half-year were 406.3 cents versus 465.8 cents previously.

Like-for-like growth from Hyprop's shopping centres in revenue and distributable earnings was 8.0% and 7.4%, respectively. Property expenses increased by 9%. Canal Walk and The Glen performed particularly well during the year, with distributable earnings growth of 9% and 10%, respectively.

Distributable earnings from hotels reduced due to a net loss at The Grace (prior to sale) as well as underperformance at Southern Sun Hyde Park.

Distributable earnings from listed property securities increased by 10% as a result of improved distribution growth from Sycom and due to the addition of 8.9 million Sycom units, acquired in terms of the Attfund Retail acquisition.

Distributable earnings in the second half include a once-off benefit amounting to 3.7 cents resulting from a deferred payment in respect of the 15 million Attfund Retail consideration units which were re-purchased by the company.

Non-core income includes Hyprop's investment in Word4Word Marketing (Pty) Limited and fee income from Vunani Property Investment Fund (VPIF).

Income from associate relates to distributions received from VPIF. This income reduced due to Hyprop selling 50% of its interest in VPIF concurrently with VPIF's listing on the JSE.

Notwithstanding the larger portfolio, total arrears at 31 December 2011 were R41 million (2010: R41 million). Total provision for doubtful debts at year-end amounted to R17.4 million (2010: R20.8 million).

Total vacancies in the portfolio at 31 December 2011 were 4,1% (2010: 3,9%).
With regards to developments, Hyprop said the planned redevelopment of The Mall of Rosebank had progressed further with the commencement of demolitions on the Rosebank Gardens site.

"Redevelopment of The Mall itself will commence once town-planning approvals have been received and letting requirements have been met. It is anticipated that construction will start during 2012. Further information will be communicated to unitholders in due course," Hyprop said.

Further extensions to Canal Walk, to meet tenant demand, and the refurbishment of Willowbridge South were also planned to commence in the next 12 months, the group said.

Looking ahead, Hyprop said it would continue to focus on the disposal of non-core assets, the expansion and redevelopment of existing centres and improvement of operational efficiencies. Attention would also be given to alternative forms of finance to further reduce the overall cost of debt.

"Hyprop will continue to invest in high quality, sizable shopping centres. The board will consider investment in shopping centres elsewhere, including in the rest of Africa.
"Taking into account the implementation of the Attfund Retail acquisition and short term dilution due to higher gearing, Hyprop expects to show distribution growth of between 4% and 6% for 2012," the group added.

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EXCLUSIVE: Rael Levitt says it’s “personal”

EXCLUSIVE: Rael Levitt says it’s “personal”

Says allegations are a “well-orchestrated and well-funded” attack.

Allegations of foul play against Auction Alliance and its founder Rael Levitt are a “well-orchestrated and well-funded” attack on a company with a clean track record.

On Tuesday, Levitt stepped down as CEO of the company. In an exclusive interview with Moneyweb, Levitt spoke out on the allegations of kickbacks, ghost bidders and collusion levelled against himself and his business.

The claims stem from a Saturday Star report that a 13-year old paper trail revealed the company had paid kickbacks to attorneys, liquidators, and bank staff to ensure business went their way.

The report also stated that billionaire Wendy Appelbaum was disputing the legality of an auction where she bought the wine estate Quoin Rock.

The National Consumer Commission and the Estate Agency Affairs Board have confirmed that they are investigating Auction Alliance.

Auction Alliance’s board has also set up its own probe into claims of collusion between the firm and Levitt and banks, liquidators and attorneys.


SELF-SERVING ATTACKERS

“It is a personal attack on me. Because I started the business at the age of 20, I am the face of the brand - any attack on me is an attack on Auction Alliance. It has been well orchestrated and well-funded," Levitt said.

He added: “Three weeks ago we had an impeccable reputation and now we have been vilified by the media. It has come as an enormous shock to me that we have been dragged through the mud all through untested allegations, rumours and innuendo…

“My resignation must not be construed, in any way, as an admission or acknowledgement of any impropriety, illegality or wrongdoing on my part. I am voluntarily bowing out to allow Auction Alliance to be saved from the hysterical media scrutiny that has crippled our business with untested allegations, rumours and innuendos. I don’t think any reasonable private person could have withstood the one-sided media attention that I have over the last week – it simply was too much for me,” he said.

Levitt said that similar complaints had never been raised in the business’ 20-year history. In addition, he believes the largely anonymous sources quoted in the media are former Auction Alliance “employees now largely working in competitive auction companies”.

Referring to the recent Carte Blanche expose on Auction Alliance, Levitt said the coverage was “completely unfair, tabloid-style and selective. We are extremely disappointed with the manner in the way that Carte Blanche did not question the credibility and personal agendas of some of their sources.”

Levitt said only 15% of Auction Alliance’s business is generated from banks and liquidators and added that he was unaware of commission payments by Auction Alliance to bank employees, liquidators or court officials in their personal capacities. “… that said, we employ and have employed thousands of people and we are investigating each and every allegation through a firm of independent forensic analysts…


GHOST BIDDERS

“We have made it quite clear from the start that vendor bidding – what many people refer to as ghost bidding – is legal. The same applies to referrals to attorneys. What we have discovered is although they are industry norm and are lawful, the public finds them distasteful. That is one of the issues that our independent report will look into.”

According to the Consumer Protection Act, advance notice need to be given if a sale by auction is subject to a right to bid by or on behalf of the owner or auctioneer (vendor or ghost bidding).

“Sellers use vendor bidders, which is 100% lawful, to protect their reserve prices. Our role is to protect the seller’s asset and we thus use vendor bidders,” he said.

Levitt added that in the Quoin Rock case, the person bidding against Appelbaum was a proxy bidder and not a vendor bidder.

“At auctions we often have people who have either never bid before or do not want to bid themselves. In the case of Quoin Rock the R50m under bidder was bidding on behalf of a wealthy investor who was registered. He saw the media at the auction and specifically asked us to arrange someone to bid on his behalf. We arranged this through someone who has acted in the past as both vendor and proxy bidder for us.
“The mistake that we have made as a business is not clearly explaining the intricacies of auction methodology. Auction systems in South Africa, at Quoin Rock and globally are no different. And because we did not explain vendor bidding and proxy bidding clearly, the public finds it unethical and distasteful. For that mistake I have personally fallen on my sword. The mission of Auction Alliance has been to professionalise auctions and make them a first choice method of sale. The events of the last two weeks have taken our business and the auction sector back 20 years. It’s a devastating time for me to witness such a media disaster.”

...

EAAB appoints inspectors to probe Auction Alliance

EAAB appoints inspectors to probe Auction Alliance


Investigating allegations of foul play.
JOHANNESBURG - The Estate Agency Affairs Board (EAAB) has appointed independent inspectors to look into the allegations of foul play against Auction Alliance.

This comes after Auction Alliance’s board set up its own probe into claims of collusion between the firm and its CEO Rael Levitt, and banks, liquidators and attorneys.

The claims stem from a Saturday Star report that a 13-year old paper trail revealed the company had paid kickbacks to attorneys, liquidators, and bank staff to ensure business went their way.

The report also stated that billionaire Wendy Appelbaum was disputing the legality of an auction where she bought the wine estate Quoin Rock.

Appelbaum claimed she later found out she was the only genuine bidder and consequently lodged a complaint with the National Consumer Commission, citing irregularities. Levitt responded by suing her for defamation.

According to Margie Campbell, Acting HOD for marketing and communications at the EAAB, members of an independent auditing firm were appointed as inspectors.

“The appointed inspectors will, therefore, be investigating various issues that have manifested themselves from information received by the EAAB, which, has triggered the need for a regulatory inspection. The inspectors will have inspection powers both in terms of the Estate Agency Affairs Act and the Financial Intelligence Centre Act.

“The inspectors will investigate the matter without prejudice or favour and will, in due course, produce a report to be considered by the EAAB. Such an inspection is routine in any matter of this nature and will assist the EAAB in obtaining information to enable it to determine whether any further action needs to be pursued in this matter. It must be emphasised that there are no presumptions as to the outcome of the investigation on the part of the EAAB. Auction Alliance and Mr Levitt have indicated to the EAAB that they welcome the inspection and will cooperate fully with the EAAB in this endeavour,” she said in a statement.

According to reports, Appelbaum also approached the National Consumer Commission. The Commission could not be reached. – With Sapa

CoJ verdict will have far-reaching implications

CoJ verdict will have far-reaching implications

It’s the first comprehensive investigation into compliance notices.
The hearings between the City of Johannesburg (CoJ) and the National Consumer Commission (NCC) concluded on Friday without a verdict being handed down.

The hearings have been on-going since Wednesday with the National Consumer Tribunal (NCT) presiding over an application by the CoJ to have 45 compliance notices issued by the NCC against it set aside.


GROUNDBREAKING

While the two parties laid down their final arguments, the hearings are viewed as being ground breaking in terms of SA’s consumer legislation. This is because the NCT’s final verdict is likely to have far-reaching implications concerning the interpretation of the CPA.

Said the chair of the NCT, Professor Tanya Woker: “We are breaking into new areas. It’s the first comprehensive investigation into compliance notices… We have to apply our minds into these legal issues; its new legislation (so) there is nothing we can judge it by.”

She had indicated that findings will have implications for all of SA’s municipalities as well as the courts.

Owing to the far-reaching implications of the NCT’s findings, Woker has refrained from providing an indication as to when a verdict will be handed down, saying only that it will consider the matter thoroughly and provide its opinion “in due course”.


COMPLIANCE NOTICES

The compliance notices in question relate primarily to allegations that the CoJ has failed to provide its consumers with a “quality service” in billing for water and electricity and that the inaccurate billing of consumers constitutes unfair or unreasonable pricing as defined by the Consumer Protection Act (CPA).

The CoJ has also been accused of failing to provide a quality complaints resolution mechanism that would meet the reasonable expectations of its consumers.

Although the City has admitted that it has “problems” concerning its billing systems and its complaints resolution mechanisms, it is attempting to have the notices overturned based on arguments concerning the applicability of sections of the Consumer Protection Act (CPA) in this matter and on assertions that the NCC did not follow due process in issuing the notices.


JOHANNESBURG

In a nutshell, the CoJ is contesting the legality of the notices although it has not contested NCC’s allegations that it has dysfunctional billing and complaints resolution mechanisms.

Advocate Michelle Le Roux, acting on behalf of the CoJ, contests that the NCC did not follow due process when issuing the compliance notices as it did not launch a full and proper investigation into the complaints upon which the notices were issued.

“What we say is that an investigation needs to ascertain the facts… If the real concern is the complaints system, then you need to find out more about how that system works.

She asked “was the City aware that it was being investigated?” suggesting that a series of meetings that took place between the NCC and the CoJ prior to the notices being issued, did not constitute an investigation as would be legally required.

“The issue here was whether the complaint resolution system of the City works,” she said, adding the meetings were not “scrutinising what’s going on”.

Should it be concluded that the NCC had entered into a sufficient enough investigations to warrant the notices, the CoJ contests that sections contained within the CPA relating to unjust pricing of goods and services and a consumer’s right to demand a “quality service” do not apply to the CoJ’s billing of consumers or its complaints resolution mechanism.

Le Roux contests that the billing of customers is “incidental” to the City’s provision of a “good” such as water and electricity.

She has indicated that unless the billing and complaints functions were outsourced they do not constitute a service.


CONSUMER COMMISSION

However, the NCC’s director of legal services, Oatlhotse Thupayatlase, argues that at a meeting on April 15 last year, the CoJ had admitted that it had had problems with its systems and had agreed with the NCC on a “super-structure” of processes designed to deal with complaints directed to the NCC concerning the City.

“The system that was set-up had failed,” he said. “There was a superstructure that was set up to deal with complaints that were coming through… Either you commit to that structure or you don’t…

“There was clearly not commitment” on behalf of the CoJ, he said.

Following the failure of the City to meet its commitments, the NCC “got frustrated” and with no other avenue left to deal with the complaints, issued a compliance notice.

He argues that the NCC engaged in a “fact-finding mission” prior to issuing the notices and had engaged in a sufficient enough investigation to confirm that the City was failing its consumers as outlined by the CPA.

The applicability of the CPA to the CoJ’s billing system will be something that the NCT will have to decide, he said, although he has previously indicated that it would be “very difficult” for the tribunal to conclude that the City’s billing systems did not constitute a “service” as defined by the CPA.

Property developments lure businesses from Pretoria CBD

Property developments lure businesses from Pretoria CBD

Urban sprawl to the east and south of Pretoria and the trend of decentralisation from the Pretoria CBD have resulted in the formation of nine basic office nodes in the Tshwane Municipality, says Jan Oelofse, leasing and sales broker for JHI Properties.


Construction of the Podium n Menlyn is scheduled to be completed in mid-year.


"These nodes are Arcadia, Brooklyn, Hatfield, Lynnwood/menlopark - the old east as it is known - Menlyn/ Faerie Glen, Pretoria's eastern suburbs, the new east Centurion, and Highveld Technopark developed in the south.

"The office component in Pretoria's CBD has been and continues to be underpinned by government buildings and tenancies, but the private sector has to a large extent moved to the deconcentration nodes, a trend being followed by some government departments."

Factors contributing to this included poor public transport, which had encouraged private transport, which in turn had affected road congestion.

"The old town planning conditions restricted the provision of adequate parking in developments, so Pretoria CBD has insufficient parking facilities. Ageing buildings, designed for office use 20, 30 or more years ago, are inefficient compared with modern designs, and antiquated facilities including lighting are costly to maintain and incompatible with modern technology. Another factor is that CBD office rentals have been distorted by rental agreements entered into by government over the past five to six years."

Oelofse says rent for office space in the Pretoria CBD varies from R45/m 2 for C-grade space to R65/m2 for B-grade, with installation cost contributions by landlords under certain conditions. However, in the absence of new or competitive developments to satisfy the demand for space, government and the private sector are compelled to either accept rentals offered or to move to deconcentration nodes, where they can find acceptable rent in modern, economically designed buildings, with sufficient parking. And, new buildings generally provide for economical space planning and facilities designed to lower and contain operating costs.
He says Arcadia caters mainly for fring e CBD offices and embassies, with most developments comprising residential conversions.

Hatfield's main commercial activities and development centres on Pretoria University. Office developments are low-density office parks with buildings of 1 000 2 to 3 500m 2 on average, catering for 100m2 to 3 500m2 tenants, with average rentals for A-grade buildings R90 to R95/m2. He says Hatfield is relatively stable with a reported vacancy rate of about 6 percent. Industry data indicates a total of 104 476m 2 of A-grade space with 9 386m 2 vacant. However, development opportunities are restricted.

"Popular due to its proximity to Pretoria CBD, Brooklyn and surrounds provide about 162 000m2 of P- (modern, luxury space) and Agrade office space around a mall. The demand for this area is reflected in the low vacancy rate of between 2 and 3 percent for P- and A-grade space, which fetch gross rentals of R100 to R130/m 2. The average tenant profile varies from small (100m2) to medium (2 000m2) businesses, interspersed with government tenancies. Developments are low-density."

Developed in established residential areas and following retail developments, the Lynnwood/menlopark node is concentrated mainly along major arterial roads. The developments are mainly low-density office parks, for tenancies varying between 100 and 1 000m 2 on average.

However, Oelofse says with the vast improvement of accessibility and traffic flow due to major upgrading of the N1 and the on/off-ramp at Lynnwood Road, the growth of this node has been boosted with the Lynnwood Bridge lifestyle and office park being developed in phases.

This incorporates a City Lodge Hotel, 15 000m 2 of offices and 13 000m2 of retail space. The development will measure about 73 000m2.

Gross rentals for P-grade office space in Lynnbridge vary between R140 and R155/m 2, and rentals for A-grade space average around R100/m2. The latest reported industry figures indicate a total of 232 600m 2 of office space, of which 11 3316m2 is P- and A-grade, with a vacancy rate of 6.5 percent.

"Developed around the Atterbury/n1 on/off-ramps, the Menlyn/faerie Glen retail and office development node was the first real decentralised node in Pretoria, offering the potential for significant growth around the Menlyn shopping centre as a pivotal anchor. The upgrading of the N1 and the Atterbury Road on/off-ramps, and the new Garsfontein on/off-ramps to the N1 and the upgrading of the internal and arterial road infrastructure have greatly improved traffic flow and access to the node.

"The major Menlyn Main mixeduse development... provides for 2 100 000m of residential/ hotel, 44 000m 2 retail and 143 000m2 of office space. The planned developments will be high-profile modern buildings with generous parking facilities. The building design allows for the installation of most modern facilities and infrastructure which will qualify it for at least a four-star Green Star rating." A further two new developments,
2 providing for about 27 000m of space, are scheduled for completion in the second half of the year.

According to recently published figures the total P- and A-grade office space in Menlyn amounts to 209 600m 2 with rentals varying between R105 and R145/m 2. The new and planned developments will provide further 75 000m2 of P-grade space at rentals of over R155/m 2.

Oelofse says the Centurion/highveld Technopark development node has a combined supply of 817 892m2 mainly A- and B-grade office space, with a reported vacancy rate of 9.1 percent. This node was established to cater for commercial growth, so it is not subject to growth restrictions that apply to the other nodes.
However, this area has experienced difficult marketing conditions, mainly due to accessibility restrictions.
These problems have been greatly alleviated by the upgrades to the N1 and John Vorster Drive on/off-ramps, with an added advantage being the Highveld Park and Centurion Gautrain stations that serve these areas.

Weekend Argus (Sunday Edition)