Probe into ‘fake’ BEE tenderComment on this story
Johannesburg - Allegations of tender irregularities have been made over the hiring of BEE subcontractors whose directors were allegedly a fireman, a gardener and a housewife.
Durban-based air logistics company Dube TradePort Corporation (DTPC) and a well-known construction company have been implicated in the scandal.
The Star has seen a detailed investigation into the tender that was conducted by forensic investigators Paul O’Sullivan and Associates.
The report indicates that the hiring of the three subcontractors appeared to be fronting and that the tender escalated by R7.3 million in the space of 10 weeks before any construction had even taken place.
The company that received the DTPC tender was a joint venture comprising R&G Consultants and Construction ID CC.
R&G Consultants is best known for its work on President Jacob Zuma’s private home in Nkandla. It is named in the public protector’s report as the quantity surveyors on that project.
The Air Chefs Project comprised a design and build contract to put up a double-storey 3 000m² building.
According to the forensic reports conducted last October, O’Sullivan had looked into Owen Mungwe, the executive responsible for infrastructure at DTPC.
The investigation found that:
* The project costs escalated by 25.5 percent within 10 weeks of the contract being signed from R32m to R40m.
* A post-tender requirement, which is alleged to have been made by Mungwe to introduce three emerging contractors, cost an extra R750 000 in management fees. These contractors had no prior experience in the construction industry.
* The emerging contractors wrote letters to R&G Consulting requesting mentorship, but the letters were allegedly backdated by R&G Consulting chief executive Dumi Gqwaru.
* The report alleges that a third of the project costs (R10m) was meant for the three BEE subcontractors.
After the award, but prior to contract signing, Mungwe allegedly introduced a requirement that the BEE component of the contract should be revisited.
According to testimony from a senior employee at R&G Consultants, whose affidavit has been seen by The Star, Mungwe said there should be three black-owned contractors and they should be managed by the tenderers.
The three companies were Isiqalo Build’n Trust Trading Enterprise, Godo-Olulamankankane Construction and Trading, and Inkuliso Trading Projects CC.
They were nothing more than shell companies with no apparent assets, wrote O’Sullivan to Dube TradePort in an interim report.
O’Sullivan’s report also said the increased costs of the project, due to extra construction, should either been included at the design stage or be budgeted for.
An internal memorandum, seen by The Star, sent to the chief executive of DTPC by PKX Attorneys referred to the allegations mentioned in the forensic report.
The concerns raised in the letter included that no assessments had been done on the subcontractors. The summary also stated that if the contract was illegal or fraudulent, then DTPC would be obliged to cancel the contract.
Cox Yeats Attorneys, who were representing R&G Consultants, stated in a letter to DTPC that the appointment of their client was a fair and transparent tender process.
Two of the three subcontractors who were supposed to receive mentorship said they had not been in contact with R&G Consultants since last year.
Carey Ngubane, the director of Godo-Olulamankankane Construction and Trading, said they were never given any mentoring.
Ngubane said they had applied for the mentorship programme but were told the company was looking for companies more advanced than his.
Isiqalo Build’n Trust Trading Enterprise director Zandile Ntakazane said that after her application for the mentorship, she had not heard from R&G Consultants. “I expected them to call me back but it didn’t happen,” she said.
O’Sullivan said he could not comment on the investigation, but a complaint had been referred to the public protector.
DTPC chief executive Saxen van Coller said they had responded to Public Protector Thuli Madonsela and had no further comment.
DTPC chairman Dr Bridgette Gasa said the allegations were “not newsworthy” and they were unsubstantiated and sensational.