NSFAS’ R2 million per month rental scandal

While most students from previously disadvantaged backgrounds are failing to pay for their tuition fees, the National Student Financial Aid Scheme (NSFAS) which was supposed to look after them, is paying almost R2 million per month to rent an office block.

United Democratic Movement (UDM) leader, General Bantu Holomisa, blew the whistle on the scandal in a letter sent to the Hawks head, General Godfrey Lebeya and Special Investigating Unit (SIU) boss, Advocate Andy Mothibi, this week. In the letter seen by Sunday Independent, the UDM leader reported that “NSFAS recently moved to another building using a turn-key solution, from a building where the rent had been R500 000 per month, to one where the rent now apparently is R1 968 647.05 per month.”

The letter added that the “many offices in the new building remain unused, which again is tantamount to wasteful expenditure.” Holomisa also claims in the same letter that the NSFAS “paid a rental amount of R1 968 647.05 per month for office space they had not used from December 2021 to September 2022. “If my calculations are correct, this is a whopping wastage of R19 686 470.50,” the letter stated. Holomisa also explained that “the owner of the building is overseas, yet the tender is fronted by a local person in the name of Bheki Dlamini of Dynamic SA".

“I would like to request that the Hawks and the Special Investigating Unit take an interest in these allegations and investigate them,” the letter concluded. Dlamini on February 16, after receiving five questions, promised, in a WhatsApp message, that he “will certainly give you a response in my first available opportunity.” But on Friday, he sent another WhatsApp message, saying “kindly note that I do not have any comment at this time.”

In a statement responding to our questions, NSFAS said the “board approved the awarding of the Provision of office leased premises for a period of five (5) years to the successful bidder, Dynamic SA, on 1 December 2021, following a competitive tender process.” “A competitive tender process was followed which complied with the provisions of the Public Finance Management Act (PFMA), National Treasury regulations and instruction notes and the NSFAS SCM policy.

“The tender was advertised on 23 July 2021 and closed on 27 August 2021. The tender was advertised in accordance with the legislative prescripts on the National Treasury E-tender portal and the NSFAS website. At the closing date of the tender, a total of eight (8) bid proposals were received,” the statement said. In the statement, NSFAS also confirmed that they are paying almost R2 million per month for rental.

“The monthly lease rental fee is market-related which is R1.6 million (VAT exclusive) for rental of 8,479 square metres and R281 000 (VAT exclusive) for parking of 140 parking bays,” the statement added. They denied that they paid Dynamic SA a month's rental from December 2021 to September 2020 before they even moved into their new office. But admit that they were paying R603 000 per month in their old building in Wynberg in Cape Town.

“The previously leased premises was based in Wynberg, Cape Town, whereby the monthly total rental fee was R603,000 for a total square metres of 3 883 and 84 parking bays,” the statement said. NSFAS added that they moved out of the previous leased premised due to the lease expiry. “By extending the previous lease, NSFAS would have violated the provisions of the SCM prescripts.” Holomisa told the Sunday Independent that the lease agreement was “another State Capture project.”

“This is yet another State Capture project where people are building empires to sustain themselves when they are no longer in government. Students are unable to study because the money earmarked for them is being looted,” he said. NSFAS board chairperson, Ernest Khosa, failed to answer direct questions sent to him about this lease agreement with Dynamic SA. While NSFAS pays exorbitant rental fees, students have been complaining about the new proposed cap by the scheme regarding their accommodation.

Students at the University of Pretoria staged a sleep-in and indicated they had no money to top-up accommodation fees for the year after NSFAS implemented a new policy to cap the allowance to amounts below the institution’s geo-economic rates. This led to a sleep-in by students organised by the SRC, outside the institution’s Department of Accommodation and Residency Affairs.

“We are protesting against the R45 000 NSFAS cap because students used to get R60 000 last year; this year they could be expected to pay up to R63 000,” SRC president Njabulo Sibeko said. He said students would not be able to afford it. Final year student Malexis Makgolego said he would not have the additional R1 500 required for her residence, as her father was deceased and her mother was a grant recipient.

“I will not have anywhere to live and dropping out at this crucial time to return home may be my only choice.”