'Telkom decision on property sales will damage rel
'Telkom decision on property sales will damage relations'
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Developers wonder whether utility can be taken at its word
Property Reporter
TELKOM's cancellation of a tender to sell part of its property portfolio has raised questions about the parastatal's sincerity in its dealings with the private sector.
The handling of the proposed sale has attracted controversy since it was launched in September. Telkom called for a R50000 nonrefundable deposit from property developers wanting information on the deal. This was to attract serious and suitably qualified investors.
But at the time developers called on Telkom to retract and change its tender, saying the criteria were too vague and the deposit too high.
Telkom said on Thursday it had terminated the bidding process because it "failed to produce a commercially acceptable solution".
This raised the ire of property developers, who will not get back the R50000 they shelled out to acquire information on the deal.
Finlay & Associates, one of the participants in the tender process, said it was "extremely disappointed" at Telkom's decision.
MD Lynette Finlay said there was no recourse for consortiums and companies who paid the R50000. "We went in with our eyes open and knew if we weren't successful we'd lose the R50000."
SA Property Owners' Association CEO Brian Kirchmann agreed with Finlay, saying Telkom was shooting itself in both feet. "It's not just the R50000. We're talking about a lot more time, money and effort spent on preparing documentation and getting the consortiums together to handle the size of the actual tender portions that went out.
"When the tender initially went out, they (Telkom) didn't state what their intentions were except to say these properties are on offer and please put your proposals forward."
Kirchmann said Telkom's move would damage government's public-private partnership as the property industry would be "reticent about private-public partnerships for fear of all efforts being wasted in other government initiatives.
"The industry wants to involve itself in public and private partnerships because it sees the value of them, but sadly, because of the manner in which the Telkom tenders were handled, I believe it will be very difficult to convince the industry that the government is serious about these proposals."
There was also confusion surrounding Telkom's statements that it had terminated the bidding process as the industry was under the impression that some groups had made successful bids.
Gensec Bank, which, in conjunction with RMB Properties, Rand Merchant Bank and the Kagiso Group, put forward a bid, said they were unsuccessful.
Ockert Goosen, who is responsible for security at Gensec Bank, confirmed its bid was not successful, but that Marriott's was.
Marriott Bank declined to comment on the cancellation of the bidding process, saying it was "involved in negotiations with Telkom".
Telkom national spokesman Andrew Weldrick was adamant that "no parties were successful" during the bid. "Telkom has terminated the information memorandum. No parties were successful.
"We have no intention of sending out another information memorandum at this point. It was understood from the outset it was a non-refundable amount."
Telkom did short-list bidders, but this "does not make them successful", Weldrick said.
Weldrick would not comment on whether the Marriott consortium was short-listed.
"That's confidential and I can't comment on it," he said.
Jun 09 2003 08:48:40:000AM Nick Wilson Business Day 1st Edition
Monday
09 June 2003
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