Lease agreement: The PSIRA entered into a lease agreement for a period of 5 years to the value of R61.243 million (Annual Report, 2010/11:85) for 5 070 m2 office space and 160 parking bays The lease is structured such that the costs for the first 2 years are the same (R5.7 million per annum) with a steep increase (R15.058 million) in the third year, after which the premium increases by 10% in the fourth and fifth years. The lease should have been formulated such that there would be a constant escalation of 10% from the second year. This would have translated into a lease that commenced at R10.031 million in the first year, increasing to R14.687 million in the fifth year. Other concerns raised by the Public-Private partnership (PPP) unit within National Treasury which examined the lease include the following: