Fraudulent tenders milk Limpopo treasury
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The Limpopo education department, which accounted for nearly half of the province’s R2 billion cash-flow crisis, awarded R1.2bn school infrastructure contracts irregularly and fraudulently.
The bulk of the tenders were awarded to associates of Premier Cassel Mathale and ANC youth leader Julius Malema, including Rivoni Properties owner Thulani Nkuna.
The department is led by MEC Dickson Masemola, the provincial ANC deputy chairman, who is a close ally of Mathale and Malema.
Nkuna, a Tzaneen-based businessman, was among a Limpopo government delegation, led by Mathale, that visited Italy on a trade and investment mission last year.
The selected contractors were given the lucrative contracts in exchange for donating piles of cash towards the construction of the Limpopo ANC’s luxury headquarters, according to provincial government, ANC and business sources.
Three independent sources said the contractors were told by senior provincial ANC leaders to help finance the R40 million Frans Mohlala House, funded by unnamed businessmen and officially opened by ANC president Jacob Zuma last January.
The Sunday Independent can today reveal that Tumisho Makofane, the education department’s former general manager for school infrastructure, has resigned amid allegations that he played a central role in manipulating contracts for the benefit of businessmen linked to Mathale and Malema.
Makofane confirmed his resignation on Friday, but denied it was linked to the school infrastructure contracts. He also denied he was joining Aurecon, one of the companies which benefited from the multi-million rand contracts awarded under his watch.
“There is no such thing. I am not responsible for the awarding of tenders. You can come see the documents I have so you can see what the situation is,” said Makofane.
The Hawks, Sars and Public Protector Thuli Madonsela are probing alleged tender irregularities – including fraud and corruption – in Limpopo. The investigation touches Malema and a network of his key allies, who include Mathale. They are accused of widespread looting of multi-million rand contracts to bankroll their lavish lifestyles and buy political patronage.
Finance Minister Pravin Gordhan’s intervention team is combing provincial departments for any documents that could lead them to the doors of businessmen, civil servants and politicians who have looted Limpopo.
A well-placed source said the businessmen were told by individual ANC leaders they would be “compensated” if they funded Frans Mohlala’s construction.
“They were told they would be compensated by the education department because it had school infrastructure projects to build state-of-the-art schools, which cost between R25 and R30m each. But instead of advertising the tenders, these people were just given the contracts.
“The reason there is a crisis now is that Pravin said the department must prove the tenders were advertised, the appointment was faultless and demanded that the contractors produce appointment letters,” said the source.
The provincial education department accumulated unauthorised expenditure of R2.2bn, accruals amounting to R190m and is expected to overspend by R293m.
Apart from having 200 ghost teachers and 2 400 excess teachers on its payroll, it could not pay staff and for security company services.
Hope Mokgatlhe, spokesman for the department of basic education, could neither deny nor confirm that R1.2bn tenders were awarded irregularly and that the Limpopo education department had a budget deficit of R900m.
“At this point it would not be prudent to respond to the detailed questions that you have brought up because of the sensitivities that are involved.
“Our priority is to stabilise the education department in Limpopo. There is a claim from Limpopo department of education that the allocation for Occupational Specific Dispensation (OSD) had a short-fall of R700m.
“So the focus of the intervention cannot be based on that claim only,” said Mokgatlhe.
Sello Lediga and Gerda Hawker, two Limpopo businesspeople sub-contracted by Rivoni to supply 950 desks to a school he built outside Polokwane, said they had been told they would not get their R500 000 payment because Nkuna’s tender was irregular.
They said Nkuna himself said he could not pay them as the education department did not pay him because of the intervention.
Hawker said her desk-manufacturing company, Thabang Timbers, and Lediga’s HC Power delivered the desks to Morwangwato High School in Ga-Mphahlele on November 28.
“Nkuna said he could not pay us because the education department was under administration from December 5 and he didn’t receive any payment,” said Hawker.
Lediga added that Nkuna refused to heed Gordhan’s call for businessmen to submit valid supporting documents in order to get paid.
“Rivoni cannot pay me because it has not been paid. I was told they (education department) cannot pay them because that tender was never advertised. We are not prepared to be collateral damage between government and Rivoni,” said Lediga.
Nkuna declined to comment yesterday, saying he was in a meeting. “Can you just call me in a hour? Okay,” Nkuna said.
The level of supply chain malpractice in Limpopo is further highlighted by revelations that the provincial health department allocated hospital food and perishable goods tenders to hand-picked companies at either inflated prices or below market fees.
Some hospitals are now running short of food partly because contractors without valid contracts have withheld their service in the face of Gordhan’s refusal to pay unless valid contracts were produced.
Insiders said the contracts had been manipulated by officials.
In some instances, contractors were told to under-quote to ensure they got the contracts.
To make up for the losses, they would be allowed to supply fewer goods and bill the department more money.
Documents in the possession of The Sunday Independent showed that one company, Nandis Food Suppliers JV Rufaro Trading Enterprise, was awarded a contract to supply cooking oil to all hospitals in the province for five years.
ANC Limpopo spokesman, Makonde Mathivha, dismissed as “fabrications” claims that businessmen were rewarded with lucrative state contracts for funding the party’s new building. - Sunday Independent