Public Protector to investigate R631 million toilet tender
24 March 2015
Yesterday, 23 March 2015, the Office of the Public Protector confirmed to me, in writing, that an investigation into the R631 million tender awarded to the Siyenza Group will be investigated. The investigation will be conducted by the Governance and Integrity Branch.
At the end of February, the Saturday Dispatch broke the story of the Amathole District Municipality (ADM), in the Eastern Cape, awarding a tender worth R631 million to build 66 000 toilets. The tender was awarded, without following the proper procurement procedures, to the Siyenza Group, a company which has close ties to senior ANC officials, namely President Jacob Zuma, ANC Secretary-General Gwede Mantashe and Small Business Development Minister Lindiwe Zulu.
It was further established that there is no record of the Siyenza Group being registered with the Companies and Intellectual Property Commission (CIPC), nor is there record of the company being registered with the Construction Industry Development Board (CIDB), a requirement for any construction company involved in projects in the public sector.
I have also received correspondence from the Development Bank of Southern Africa (DBSA) confirming that in August 2014 it "approved a total loan facility of R631.8 million to the ADM..." R286 million of which has been "disbursed thus far" for this particular project.
The DBSA also confirmed that they did not attach any timeline or deadline to the funding provided to ADM for the project. This directly contradicts the claim by ADM that they awarded the contract to Siyenza under Section 32 of the Supply Chain Management (SCM) Regulations due to the time constraints imposed on them by DBSA.
The Dispatch has since revealed that R114-million has been paid to Siyenza so far, starting with a payment of R31 million in September last year, with an additional payment of R61-million in December. This detail emerged in a response from MEC for Cooperative Governance Fikile Xasa.
Despite the large payments already made to Siyenza, only 5000 toilets have been built, according to CEO Bongani Mpeluza. Making it impossible to build 66 000 toilets by the deadline in June.
This is highly irregular considering that the contract between Siyenza, ADM and the DBSA was only signed in November last year with little construction taking place before January 2105. Siyenza was also introduced as the contractor to a group of stakeholders in September, months before their actual appointment.
I will be filing a Promotion of Access to Information Act (PAIA) application for a record of the irregular payments.
This scandal is yet another example of an abuse of citizen's money by the ANC in order to the benefit and enrich the political elite and those close to them, while the most vulnerable of our citizens go without basic services or are made to live with substandard services.
Next week, I will conduct an oversight visit to see first-hand the status of the project and the erected structures, some of which have already fallen or shown signs of poor workmanship.
Corruption is a crime of the worst kind, especially when it affects the poorest and most vulnerable of our people to the extent of denying citizens access to quality service delivery.
Statement issued by Mmusi Maimane, DA Parliamentary leader, March 24 2015
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