South Africa

SCORPIO: Ace Magashule and new Free State premier’s families score cars, contracts in R300m government programme

A brother and daughter of ANC Secretary-General Ace Magashule and the sons of his successor as Free State premier, Sisi Ntombela, are among a group of politically connected contractors who scored big in a government development programme meant to uplift emerging businesspeople in the Free State.

Politically connected companies were gifted bakkies, trailers and related equipment by the Free State provincial government. They also received contracts for roads maintenance, grass cutting and other services as part of a preferential procurement drive that has cost taxpayers at least R300-million since 2016.

A group of emerging companies that were included in the programme earlier say their contracts from the province dried up as soon as the politically connected contractors were appointed.

The Free State Department of Police, Roads and Transport expanded its contractor development programme in late 2016 to include new emerging contractors. It also appointed a new batch of emerging companies for grass-cutting services.

The contractor development programme and grass-cutting contracts are both funded from the department’s road maintenance grant.

The contractor development programme contractors receive road maintenance contracts from the department and attend training courses funded by the province.

One document shows that at least 20 of the companies appointed in 2016 came from the Fezile Dabi District Municipality, which includes Magashule’s home town of Parys.

Further research on the department’s contractor development programme beneficiaries and grass-cutting contractors reveals that at least 10 of the 2016 intake of companies for the programme are owned or run by people directly related to or linked to Magashule, Ntombela and other senior ANC figures in the province.

These companies include:

  • ME Construction, owned by Ezekiel Magashule, a younger brother of the then premier and current ANC Secretary General.

  • Botlokwa Holdings, owned by Thoko Malembe, a daughter of Ace Magashule who has also benefited from a R150-million RDP project near Bethlehem.

  • MDBS Trading, which is owned by Sibusiso and Duduza Ntombela, the sons of Sisi Ntombela.

  • Juda in Zion Trading, owned by Katleho Mochela, the daughter of Joey Mochela, mayor of Parys; and

  • 4Ever Friends Trading, a company founded by the late regional secretary for the Fezile Dabi district, Moshe Tladi. Magashule delivered a speech at Tladi’s funeral in August 2017.

None of the owners of the above-mentioned companies responded to queries.

ANC spokesperson Pule Mabe appears to have read queries sent for the attention of Magashule on WhatsApp, but he did not reply.

According to the Department of Police, Roads and Transport, an advertisement inviting companies to apply for a place on the programme was placed in The New Age newspaper to comply with the relevant procurement laws and regulations.

We hereby wish to advise you that the Department of Police, Roads and Transport has followed due processes in terms of Supply Chain Management as required for the appointment of contractors in the Contractor Development Programme,” the department said.

However, when asked for a copy of the advertisement, the department sent a PDF document that failed to open. After pointing out the error and asking for the advertisement to be resent, the department stopped communicating with this journalist.

The appointed contractor bids were also audited by the Auditor-General of South Africa, around matters of conflict of interest as well as related parties, and there were no findings raised during the auditing process,” the department said in its written response.

According to figures provided by the department, R118-million was spent on the contractor development programme in the 2016-17 financial year.

This was to pay invoices submitted to the department by companies on the programme for “work done”, the department said.

Sources close to the matter say the department spent at least that much on the programme in the 2017-18 year. It is not clear what the contractor development programme budget is for the 2018-19 financial year.

A further R52-million was spent on grass-cutting services in the 2016-17 and 2017-18 financial years.

The department also spent R11-million on light duty vehicles (LDVs, or bakkies). It says it donated the vehicles to 58 emerging companies. It did not want to provide details of the recipients of these vehicles.

But documents obtained by this journalist show that the companies owned by Magashule’s daughter and brother are among those that received bakkies from the department.

It is not clear how much money each of the companies connected to Magashule and the other politicians have earned through road maintenance and grass-cutting contracts.

The department did not want to divulge these figures.

However, a document with details of some of the department’s expenditure provides a small glimpse of what some of the connected companies are getting paid.

4Ever Friends Trading, for instance, the company owned by the now deceased ANC regional secretary in the Fezile Dabi district, has been paid at least R1.4-million for grass-cutting services alone.

The inclusion of the politically connected companies appears to have come at the cost of a group of companies from the province that were put on the programme at an earlier stage.

Some of the owners of these companies, who wish to remain anonymous, say they were absorbed into the contractor development programme from as early as 2008. However, they say they stopped receiving contracts for road works and grass cutting as soon as the companies from Magashule’s home town were appointed.

When we started, we were about 100 companies. There were always issues with our payments and sometimes we were told there weren’t enough funds available to complete our courses. But we heard the companies from Fezile Dabi are getting paid on time, and they are getting lots of work,” said one of the aggrieved contractors.

Botlokwa Holdings, owned by Magashule’s daughter, was appointed “for the grass cutting alongside the roads in the Free State province for the period of 36 months [sic]”, according to a Free Sate tender bulletin from November 2016.

Thoko Malembe, the owner of the company, was born while Magashule was in exile in the late 1980s. She was reunited with the then premier in 2011. Her fortunes have changed dramatically for the better since the reunion.

Apart from the contractor development programme and grass-cutting contracts, Malembe has also benefited from a R150-million contract for RDP houses near Bethlehem. She has also pocketed R9-million from a property deal involving the Free State Development Corporation (FDC). DM

Myburgh is an investigative journalist and the author of The Republic of Gupta – A Story of State Capture. He is currently working on his second book. Information regarding this story or related matters can be sent to plmjourno@yahoo.com

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