30 January 2013

South Africa: Cogta Must Answer for R30 Million Tender Fraud

press release

It was revealed yesterday that the Department of Cooperative Governance and Traditional Affairs (CoGTA) has awarded a R30 million tender to a trust that may be fronting for another company.

These revelations were made in a report compiled by Corruption Watch and the matter is currently the subject of an investigation by the SAPS commercial crime unit.

Given the serious nature of the allegations contained in the report, I will be writing to Minister Richard Baloyi to request that it be tabled for discussion in the COGTA parliamentary portfolio committee. CoGTA needs to be held accountable for its role in green-lighting an irregular tender process that diverted millions of rands' worth of public funds to a private company.

In 2011 COGTA awarded a portion of its Community Work Programme (CWP) to water and sanitation NPO Mvula Trust, whose chairperson is ANC NEC member and deputy minister of Water Affairs, Rejoice Mabudafhasi.

In terms of the tender rules, only non-profit organisations could qualify, yet it appears that Mvula Trust was partnering with Ubuntu Sima, a for-profit company that stands to gain 75% of the income from the tender. This was not mentioned during the bidding process.

One of the directors of Ubuntu Sima, Gabsie Mathenjwa, is also a trustee of Mvula Trust. Clearly, there was a conflict of interest here, which the Trust failed to disclose.

The role of deputy minister Mabudafhasi also bears further investigation. As chairperson of Mvula Trust, and a member of the executive, she must have been aware that correct tender processes were being flouted.

I will therefore also call for the deputy minister to appear before the portfolio committee to explain her role in ensuring that a flawed tender process was allowed to go ahead. In addition, the DA will be submitting parliamentary questions to gain clarity on her involvement.

Yet again, it appears as if public funds are being diverted to line the pockets of well-connected individuals and companies - and yet again, it is the poorest and most vulnerable of our citizens who will have to suffer for it.

John Steenhuisen, Shadow Minister of Co-operative Governance and Traditional Affairs

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