The affordable education loan option
Johannesburg - Taxpayer money earmarked to create jobs for rural villagers in Mpumalanga was spent on alcohol, cigars and cigarettes to entertain “tenderpreneurs” instead of funding a rural agricultural project.
This is among the damning findings of a forensic report by the Grant Thornton Advisory Services after the Department of Trade and Industry (DTI) commissioned it to investigate how the Department of Economic Development, Environment and Tourism (Dedet) in Mpumalanga had spent R23 million of the R33m granted to it from DTI.
The money was supposed to be used to establish a poultry, fruit and vegetable processing and packaging project in Bushbuckridge. It had been allocated from the Employment Creation Fund (ECF), the DTI’s secretariat that exclusively dispenses funding to government departments and its entities.
But a forensic investigation was launched after allegations arose that money already paid to the Dedet had been mismanaged.
The report, which was handed to the DTI in July, paints a picture of tender rot in the Dedet:
* R55 000 was spent on refreshments, alcohol, cigars and cigarettes;
* R8m was paid towards 26 transactions where requisition forms were not presented;
* Another R1.2m was claimed for consulting fees that were not “quantified”.
* CCTV cameras and access-control systems were never installed at the project site, but R129 550 was paid for this; and
* R785 000 could not be accounted for.
In addition, 16 suppliers that had been subcontracted by the main contractor, Fuse Project Management and Consulting, had not been registered for VAT. Despite this, these suppliers “irregularly” claimed R166 000 for VAT.
At the centre of the irregular expenditure and the mismanagement of public funds was former Dedet head Rabeng Tshukudu, who stands accused of dubiously awarding the project management to Fuse Consortium.
The tendering process reveals the extent to which Tshukudu had gone in allegedly breaking procurement laws.
In August 2010, Tshukudu appointed Fuse consortium to run the multimillion-rand project without issuing a tender, which the forensic report has now slammed as “irregular”.
In July 2009, a year before Fuse was appointed, Tshukudu had issued an open tender for the project. According to the report, Fuse was not among the 25 bidders that had applied.
After presentations and final evaluations, Fumani ma Africa was identified as the preferred bidder. But it was never appointed.
Instead, Tshukudu withdrew and cancelled the bid in April 2010. Weeks before he cancelled the bid, Fuse made a proposal to Tshukudu to operate the project.
“The service or product proposed by Fuse PMC was not unique in nature as it referred to the same services that were previously advertised on tender,” the report noted.
Without re-advertising the tender for competitive bidding, Tshukudu granted the five-year contract to Fuse. This was on condition that the consortium sourced R35m funding on its own.
The report dismissed this condition as misleading.
It indicated that Tshukudu, acting on behalf of Dedet, had already secured funding from the ECF secretariat.
The funds had been transferred by the National Treasury to Dedet’s account on August 12, 2010, a month before Tshukudu signed a service-level agreement with Fuse in September.
“It appears that this was done so that it would appear as if the consortium sourced the funding, whereas in fact it did not,” said the report.
Several objections were raised by Tshukudu’s colleagues, but he allegedly ignored these and awarded the tender to Fuse.
In the report, Tshukudu indicated to investigators that the project was the brainchild of Fuse and if it was cancelled, the consortium would institute legal action against the department.
The report has recommended that fraud charges be opened against Tshukudu, who refused to comment to The Star.
Fuse’s Sam Sekgota also refused to comment.
Dedet spokesman Mohau Ramodibe said the department was yet to receive a copy of the forensic report.
DTI spokesman Sidwell Medupe did not respond to questions emailed to him.