R700m scheme for pals

DIANNE HAWKER and CANDICE BAILEY

A R700 million-a-year school feeding scheme is allegedly being run as a jobs-for-pals racket with politically connected companies irregularly winning contracts worth millions.

The cousin of ousted ANC Youth League leader Julius Malema features on the list of those who have benefited, along with ANC Polokwane councillor Jan Alex Moabelo and ANC Youth League regional secretary Joseph “Jossie” Buthane.

Several losing bidders and some Limpopo Education staff have raised concerns about the allocation of the contracts with the Public Protector and the National Intervention Team.

The Sunday Independent understands that the Hawks, as part of the national intervention into the floundering province, are investigating a criminal case relating to allegations of corruption and maladministration in the awarding of the contracts for the delivery of food to 1.5 million pupils.

However Hawks spokesman McIntosh Polela would only say that “there are investigations into 38 departments and sub-departments in Limpopo”.

“We will not, for now, reveal the specific departments or officials who are being investigated.”

The Limpopo office of the Public Protector has confirmed that it is investigating allegations of irregularities in the Mopani and Waterberg districts.

And this week two Limpopo businessmen approached the Pretoria High Court to have the contracts of all 337 companies reviewed.

There are two tenders – one for primary schools and another for secondary schools.

This week the court heard part of the application, in which Flat Row Development and Trading and Nungo Health Foods requested permission to go ahead with the review case without individually informing the winning bidders.

Instead they wanted to be allowed to place newspaper adverts notifying interested parties of the case. But the court ruled against this request.

As part of their case, they filed documentation obtained from the Limpopo Education Department which they believe reveals several irregularities in the two tenders.

They include bid approval reports which specify that “preference would be given to companies located in a specific district as per specification”.

The reports provide details on which companies were awarded tenders in the five districts – Vhembe, Capricorn, Sekhukhune, Mopani and Waterberg.

However, the owners of the two companies, say certain companies were awarded tenders in districts they did not tender for or operate in.

Tshepo Malema’s Arandi Trading Enterprise was recommended as a final bidder in the Vhembe district – despite the company being based in Seshego and having been evaluated in the Capricorn district.

The Sunday Independent has calculated that the company will receive around R4.6m over two years from the department for feeding 4 445 pupils.

Asked about the allegations of irregularities, Tshepo Malema refused to comment but said the allegations were untrue.

In May, The Sunday Independent revealed that Arandi had irregularly been awarded a R44m contract to supply medication as part of a pharmaceutical contract. It has also been linked to questionable road construction projects in the province.

Moabelo, a proportional representative councillor in Polokwane, is a director of Jan Alex Trading, which also tendered for Capricorn but was awarded a contract to feed 4 717 pupils in the Vhembe district.

Yesterday Moabelo said he submitted feasibility studies for all the districts except Sekhukhune but did “not know how the Education Department processes work”.

He said he was not a councillor when he tendered for the contract – and submitted documents like any other business person.

Exaberated Trading 51, a company owned by Buthane, would be paid R3.3m for feeding 4 742 pupils. The company had also tendered, and been evaluated, for the Capricorn area but was contracted for the Vhembe district.

Buthane is also a public servant and is reported to be a Friends of the Youth League member.

According to the court papers, it also erroneously scored high marks in the feasibility section – despite having only been established in 2011.

Flat Row’s Khangwelo Ndou argues that Exaberated should not have scored 10 points because it could not have produced financial statements for 2009/10.

Buthane, who is listed as the sole director of the company, yesterday said Exaberated belonged to his mother and “she is not a friend of Julius”.

Buthane denied any irregularities, saying the company had tendered in all the districts, but only won in Vhembe. “I cannot comment on the criteria of the bidding committee,” he said yesterday.

Bid adjudication documents only list the company in Capricorn district.

An Education Department employee, who cannot be named as he is not allowed to speak to the media, said the evaluation for each district was meant to have been done separately.

“[Some companies] carried regional points where they should not have got points for location.”

Companies could gain two out of 10 points based on their location in the final leg of the evaluation, while the other 90 points are awarded for price.

The Sunday Independent has scrutinised the approval reports and feasibility score sheets from the initial phase of the tender which form part of the court documents.

The documents reveal that at least 34 companies, which were awarded contracts in the Vhembe district, had been evaluated in Capricorn. They do not appear on the Vhembe preliminary score sheets.

Ten other companies which were awarded contracts could not be found on the Vhembe district feasibility score sheet.

An extrapolation done using an average of R2 a day per child for the primary school tenders and R3 a day per child for the secondary school tenders shows that the 44 companies would have been awarded roughly R230m in contracts.

The feasibility section of the bid contains several requirements, including a business plan, audited financial statements from 2009/10 and specifics on how the company would contribute to job creation locally. The companies also scored points for having experience in providing a similar service.

In court papers, Ndou said the department showed a “cavalier attitude” towards the constitution and the law.

He had first tried to obtain the bid records in a Promotion of Access to Information Act application, which was ignored by officials.

He later got a court order instructing officials to deliver the documents.

Yesterday administrator for the Limpopo Education Department, Mzwandile Matthews, said he was not aware of the court case.

“The state attorney says they have not been informed of it. No papers have been served on them. That means the case does not exist,” he said.

Matthews said he had checked with the supply chain management department and the deputy director-general responsible for school nutrition, and neither had received complaints from the districts about tender irregularities.

But, as early as March, former education administrator Dr Anis Karodia, in a report to the National Council of Provinces had warned that the school nutrition programme had “collapsed well before the intervention strategy was put in place”.

“The collapse was premised on poor district implementation of the programme.

“There seemed and seems to be a don’t-care attitude by the district staff and very poor control by the education headquarters,” Karodia had said.

Karodia said some companies were not able to deliver and contracts needed to be withdrawn.

Other contracts needed to be looked at again because of overpayments and discrepancies with invoices.

In December five Limpopo departments including Health, Education, Public Works, Treasury and Roads and Transport – were placed under national administration by the cabinet after the provincial government ran into a R1.5 billion deficit that almost saw public servants going unpaid in November.