Was the IDC part of the plan to keep Nkandla contractor out of court?
I will today write to the Chairperson of the Portfolio Committee of Economic Development, Mrs Elsie Coleman, requesting him to summon the Industrial Development Corporation (IDC) Chief Executive Officer, Mr Mvuleni Qhena, to appear before the portfolio committee and account for the IDC's R10 million bailout of Bonelena Construction CC, one of the contractors for the upgrade of President Zuma's private residence in Nkandla (see here).
I will also write to the Minister of Economic Development, Ebrahim Patel, requesting that he launch an immediate investigation into the IDC's dealings with Ms Nene and I will submit parliamentary questions to ascertain whether Minister Patel had any knowledge of this bailout and the reasons for it being awarded in such questionable circumstances.
It is reported in the Mail and Guardian today that Ms Nene's business, Bonelena, was liquidated in June 2012 after the Department of Public Works cancelled its contract with the construction firm citing repeated failures to reach agreed construction deadlines at President Zuma's Nkandla home.
The decision to cancel the contract was later reversed after intervention by the Minister of Public Works, Thulas Nxesi, resulting in public works paying Bonelena R7 million. It was after it became evident that Bonelena was facing severe financial difficulty and had been placed under final liquidation that the IDC agreed to provide a further R10 million, on top of its original loan of R20 million, to the firm to pay out its creditors.
However, what is clear in the report is that Ms Nene lobbied extensively for the contract not to be cancelled and that there were serious concerns by the Department of Public Works that the cancellation would result in a court case, and that this would cause the details of the upgrade of the President's home to be made public.
It is specifically in this light that the intervention by IDC must be queried. The question that must be answered by the IDC was whether it was in any way pressured into paying Ms Nene the additional R10 million in order to prevent legal action and therefore the details being made public. Furthermore, whether there was any correspondence between the Minister of Public Works and the IDC in this respect.
The IDC was set up to provide finance for industrial development projects to promote economic growth and facilitate job creation. Where allegations exist that the IDC's decisions were influenced politically, Parliament has a responsibility to hold it to account.
The DA will continue to ensure that all government departments and entities operate in an open and transparent manner. Indeed, government's focus must be on creating jobs and growing the economy and not coming to the ‘rescue' of a politically-connected few.
Statement issued by Kenneth Mubu, DA Shadow Minister of Economic Development, July 12 2013
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