GEORGE MATLALA, DIANNE HAWKER and GCWALISILE KHANYILE
Billionaire ANC heavyweight Tokyo Sexwale and former National Prosecutions Authority (NPA) boss Bulelani Ngcuka top the list of politically connected elites who benefited from the controversial R20 billion Gauteng Freeway Improvement project, The Sunday Independent can reveal today.
Former NPA spin doctor and now Cope-Shilowa faction spokesman Sipho Ngwema cashed in on the project. It was approved by cabinet in 2007 and saw the South African National Roads Agency Limited awarding tenders to five consortiums which were tasked with upgrading 185km of roads, which are set to be tolled in order to pay for the upgrade.
Sexwale, Ngcuka and Ngwema are also high on the list of BEE moguls who raked in millions from massive construction projects, including World Cup stadiums, KwaZulu-Natal’s King Shaka airport, the Gautrain and the Bus Rapid Transit (BRT) system in Joburg.
Companies with links to former deputy president Phumzile Mlambo-Ngcuka’s ex-economic adviser Nonhlanhla Mjoli-Mncube and Peter Malungani, a founder member of the Peu Group, also made millions in the toll roads construction.
The 2008 toll roads tenders saw Sexwale’s Group Five construction winning two contracts worth R3.5 billion as part of the Siyavaya Joint Venture. Through the Mvelaphanda Group, which now has a 9.62 percent shareholding in Group Five, Sexwale stood to benefit from the project.
Although Sexwale resigned his post in March 2009, the tenders had already been allocated to Group Five the year before.
A consortium headed by Basil Read construction won two portions of the project which total R1.7bn. Basil Read had a 70 percent share of the contract, Roadcrete Africa 20 percent and DipCivils 10 percent. In May 2008, Basil Read bought Roadcrete Africa for R158 million, making it a wholly owned subsidiary of the construction giant.
According to the company’s website, Ngcuka’s Vuwa Investment, in which he is still a director, currently owns 3.68 percent shares in Basil Read.
Ngcuka is a former chairperson of the Amabhubesi Investment, which has 18.21 percent shares in Basil Read.
At the time when the toll roads contracts were awarded, Ngcuka was the chairperson of Basil Read, but has since resigned.
Reports stated that although he resigned as Amabhubesi chairman in 2007, he still held shares in the company – though this could not be immediately verified. Ngwema is also listed as a director of Vuwa.
Ngwema said he had no idea how Basil Read won its lucrative tenders. “I am just a shareholder of Basil Read. I have no idea of how they get their tenders,” he said. Ngwema confirmed that Ngcuka had sold his Amabhubesi shares, but The Sunday Independent has established that he remains a director and chairman of Vuwa.
The fingerprints of a number of other political elites can be traced to various other BEE partners of the companies in the road improvement project, raising concerns that the same empowered elite continue to get the fattest deals through their political connections.
BEE has come under fire, even from the ANC, for how it makes a few super-rich while failing to lift the majority out of poverty.
While transport Minister S’bu Ndebele and the ANC battled to justify the introduction of the gantries, several who are linked to the party were only happy to rub their hands in anticipation of profits.
These revelations come amid growing attention on President Jacob Zuma, whose son is a business partner of the members of the wealthy Gupta family.
Several political heavyweights have made billions from state tenders and may continue to make more cash as Zuma’s jobs plan kicks into gear, with several public construction deals in the pipeline, including the mooted high speed train rail link between Joburg and Durban.
Roadcrete lists former Department of Trade and Industry Deputy Director General Bahle Sibisi as its chairman, following a 2006 BEE deal with Sibisi’s Sangena Investments.
The Peu Group, which is a majority shareholder of DipCivils, is headed by former Gauteng Tender Adjudication Board chair Peter Malungani. In December last year, Malungani was named as one of the new Transnet board members.
The Peu Group has partnerships with Investec, Inspectacar, Super Group and Masana Technologies. Both Super Group and Masana have won major contracts with the City of Joburg – Masana for the troublesome billing system, and Super Group through its Fleet Africa division, which provides refuse collection vehicles to Pikitup.
Another notable player in the toll roads tender is Nonhlanhla Mjoli-Mncube, who is part of Akani Investment Holdings, an empowerment partner of WBHO. Mjoli-Mncube is the former economic advisor of Phumzile Mlambo-Ngcuka, the wife of Bulelani.
Sexwale’s Group Five and Ngcuka’s Basil Read also raked in millions in the construction of multibillion World Cup stadiums and the Bus Rapid Transit (BRT) system in Johannesburg.
According to City of Johannesburg’s tender records, Group Five scored more than R220m in BRT tenders between September 2009 and September 2010, among other government contract.
Sexwale’s spokesman Chris Vick could not be reached for comment and did not return messages sent to him.
Ngcuka’s Basil Read DipCivils were awarded close to R156m in the BRT project between September 2009 and August 2010. The company received a R37.9m BRT tender in August last year.
In February 2010, they got R86.7m for their participation in the BRT project. This was after they received R13.8m in September 2009, later followed by a R16.9m allocation in October the same year.
Group Five, along with WBHO-Pendev, led a consortium that built the R3.1bn Moses Mabhida stadium in Durban. Group Five also got the slice of the KwaZulu-Natal’s R6.7bn King Shaka International Airport.
The company’s share of the contract was in excess of R2bn.