M60 million Govt windfall on MGC

…as Ministry saves day for ‘broke’ Mpilo Boutique Hotel

Ntsoaki Motaung

After dilly-dallying and playacting around the office space arrangement made by the previous leadership, the new administration of the Ministry of Small Business Development and Cooperatives has taken the bait, hook, line and sinker on the move to salvage the Mpilo Botique Hotel from its financial woes.

This was revealed by the ministry’s Communications Officer Nyakallo Ntšinyi-Challa in a press statement released this week.

The statement written in vernacular loosely translates into: “The offices of the Ministry of Small Business Development, Cooperatives and Marketing previously located at the Fairways Plaza as well as the Lesotho National Development Cooperation (LNDC) have relocated to the Mpilo Boutique Hotel as of today (February 22, 2021)”.

A fortnight ago, this publication reported that the ministry offices were moving to the self-proclaimed broke luxury hotel but was stopped in its tracks by the ministry officials Ntšinyi-Challa and her boss Principal Secretary Bereng Makotoko, who claimed the new leadership was in the process of reviewing the decision made by the previous ministry administration led by Minister Keketso Sello and PS Tankiso Phapano.

However, it has emerged that Newsday was actually right, as the now Thesele ‘Maseribane-led ministry has actually made good on the seven-year deal which will leave a multi-million maloti dent in the national purse, when they eventually moved house in accordance with the initial arrangement.

The ministry will pay no less than M60million in rentals to the Matekane Group of Companies (MGC) for their office space.

This publication is privy to a sub-lease contract signed by Phapano the ministry’s PS, as he then was, and the MGC empire boss Sam Matekane, the proviso of which, the ministry will be spending almost M 9 million per annum for the next seven years in rentals which deal is inclusive of cleaning services.

“This Sub-Lease Agreement shall subsist for a period of (seven) 7 years. The Sub-Lease period may be renewed for a further period and on such terms and conditions as the parties may agree. … The rental in respect of the leased area shall be the sum of M161 per square metre per month, which translates into M724 500 which amount include cleaning services” reads part of the agreement signed on 10 November 2020 between Phapano and Matekane on behalf of the ministry and MGC as sub-lessee and lessor respectively.

A done deal, this means the new administration’s tactics of allegedely reviewing the deal, were a mere role-play, this paper understands.

However, contacted for a comment this week, Makotoko refused to divulge the rental details on same but maintained that the deal is yet to be finalised as talks thereon are still ongoing.

“This matter is not yet finalized, so I am unable to answer questions. Please contact me next week when the matter has been finalized that is only when I will be able to respond to any questions,” he said.

The PS meanwhile suggested that the figure they are going to pay for the lavish hotel is a bargain compared to what they were spending on the Fairways Plaza facility alone which he said they are leaving even before the expiration of their current lease agreement which ends in August 2021.

According to Makotoko, the ministry spent about M 1 million in rentals and other expenses for the Fairways Plaza offices only.

“At the Fairways Plaza only, we were paying about M 720 000 per month on rent alone. Inclusive of other running expenses, the fee went up to almost M1 million,” Makotoko said.

However, this claim has been refuted by Top Notch Developments, a property management company tasked with managing the Fairways Plaza property.

While he reiterated the aversion of the lease agreement which is still valid between the two parties, the company’s General Manager, Collen, pointed out that the ministry’s top management housed at the Fairways Plaza, actually occupied about 720 square meters at a monthly fee of just over a quarter of a million not close to a million as claimed by the PS.

He said the monthly rental fee paid by the ministry was in fact M263 000 which is inclusive of utilities, water and electricity.

“It is also true that there is a lease agreement between us, however, since that issue is still on the table for discussion, I will not make any comments on it,” he said.   

Meanwhile, Ntšinyi-Challa pointed out that the ministerial exodus to the new abode was necessitated by its capacity to house all of the ministry staff unlike the previous arrangement whence only senior management staff was housed at the Fairways Plaza.

“At the Fairways Plaza we only had heads of departments, so monitoring of work was quiet challenging because when one, for instance, needed signing of some documents, they had to move from LNDC to Fairways Plaza. So the ministry leadership thought it would be in its best interests to find a place that can accommodate all the departments being Small Business and Cooperatives because Marketing has been moved to the Ministry of Agriculture,” she said.

Earlier this month, Mpilo Boutique Hotel announced its closure citing Covid-19-induced financial hurdles as the reason for the abrupt close of shop.

“Mpilo Boutique Hotel could not survive this monster and today we officially say goodbye. It has truly been an exciting, fun joyful and memorable journey,” the hotel management said in a statement. 

Attempts to get an update on the area occupied as well as rental costs for the other properties previously occupied by the ministry proved futile until at the time of going to print last night.

After making calls to the Corporation requesting the information, Newsday was asked by the public relations office to send in written questions. However, at the time of press last night, a response to the affirmative was still pending, save an acknowledgement of receipt of written questions by Public Relations Manager Tiisetso Moremoholo.

“Thank you for the written questions. We will revert as soon as possible. Kind regards,” she promised.

Situated in the heart of Maseru, the hotel was the first of its kind, offering a breath of fresh air in modern comfort that appealed to both leisure and corporate clients. 

It was officially opened in 2015 as a hotel that would offer elegant accommodation with rooms fully equipped for a stay-in.

During its lifespan, the hotel was home to over 75 employees most of whom are now with the prospect of being unemployed.