Cape Town — A former senior government official in the public works department has benefited to the tune of R10m from Project Consolidate, the emergency plan to rescue the almost two-thirds of the country's municipalities that are in financial crisis.

This has raised fears that state tender regulations might not have been observed in the case.

Project Consolidate is being managed by the provincial and local government department.

Provincial and Local Government Minister Sydney Mufamadi, in reply to a parliamentary question from Democratic Alliance (DA) MP Willem Doman, said that his department had appointed the Lulu Gwagwa Development Consultants Consortium to support the department with the implementation of Project Consolidate.

Doman also said that the contract amount was R10m over two years.

Lulu Gwagwa is chief operations officer of Lereko Investments, and runs the Lulu Gwagwa Development Consultants Consortium. From 1995 to 1999, Gwagwa was deputy director-general in the public works department.

She went from there to become CEO of the Independent Development Trust.

Gwagwa also serves as a nonexecutive director on the boards of FirstRand, Airports Company SA and the Development Bank of Southern Africa.

Doman, commenting on Mufamadi's reply, said that the DA was concerned that Project Consolidate was not delivering the results expected of it.

It was intended to be a short-term, practical intervention.

"Did the Lulu Gwagwa consortium do the work they were contracted to do, or was the R10m wasted on work that could and should have been done within the department?" he asked.

Doman also said that he would follow up with more questions to Mufamadi, particularly about when the contract awarded to Gwagwa was put out to tender and who else had put in bids for the contract.

The DA MP asked originally whether a company had been appointed to "co-ordinate" Project Consolidate.

Mufamadi replied: "The consortium was contracted to establish and manage a national programme management unit; to align the national and provincial support programmes; to assist in the compilation of provincial action plans; to prepare progress reports for key meetings such as MinMec, the national advisory working group and the president's co-ordinating council; the compilation of a national high-level action plan; and to provide back office support to the provincial and local government department on key Project Consolidate activities."

Doman said that routine functions such as progress reports on meetings such as "MinMec" should be handled from within the department.

Mufamadi also said that the Lulu Gwagwa Development Consultants Consortium was connected to the Presidency and had participated in the presidential imbizo programme.

"In addition, the consortium developed and set up a monitoring and evaluation system for the imbizo programme; assisted in the development of the draft action plans, the uploading of the action plans on the departmental monitoring system, the administration of the monitoring and reporting system, the reporting on progress in relation to the action plan and the development of a guideline document for Presidential Izimbizo 2006."

Further questions that were put to the provincial and local government department had not been responded to at the time of going to press.