A company with links to several high-ranking national ANC leaders was handpicked and awarded a tender in excess of half a billion rand to build toilets for a rural Eastern Cape municipality.
Siyenza Group was awarded the tender worth R631-million to build about 66000 toilets in villages by the Amathole district municipality. It has until June to finish the project.
A three-week investigation by the Saturday Dispatch has found that proper procurement processes were not followed, which the municipality has admitted.
The company has already been paid more than R60-million “for work already done” – but a visit to some of the sites this week revealed very little work had been done on the ground.
The company is owned by Butterworth-born businessman Bongani Mpeluza and has strong links to a group of politically connected individuals including ANC secretary-general Gwede Mantashe’s wife Nolwandle Mantashe.
Others linked to the company include President Jacob Zuma’s son-in-law Lonwabo Sambudla; Mantashe’s son Buyambo Mantashe; and Small Business Development Minister Lindiwe Zulu’s son Boitumelo Itholeng.
The Dispatch understands that Nolwandle Mantashe’s company has been subcontracted by Siyenza Group to provide “health and safety” services.
Their son, Buyambo, who just finished his studies at Fort Hare University last year, now works for her company.
The key figure behind them is emerging as Johannesburg highflyer and socialite Vuyani Gaga, a man known for his love of finer things in life. Gaga counts among his acquaintances Kenny Kunene and Gayton Mackenzie.
The contract was given to Siyenza in October last year despite having already been awarded to four other companies two months earlier.
Sources close to the sanitation project, who spoke on condition of anonymity, said Siyenza was imposed on the municipality and appears to have been appointed due to its political connections.
The deal has been the talk of the town in Black Economic Empowerment circles for months now after some of the directors splashed out millions on luxury cars.
In December they were driving around in luxury cars including a brand new Porche Cayene, Lamborghini and a Ferrari.
They hosted a number of parties in Nahoon, East London, and in other up-market venues in Johannesburg and Cape Town.
There are reports they also bought two houses – including a R7-million mansion in Nahoon. This however could not be independently verified.
“These guys (Siyenza) came out of nowhere and were introduced to four suppliers that were initially appointed for the project.
“The local municipality had (already been) divided into clusters and each supplier had its own cluster,” said a well-placed source.
“But when these guys arrived they changed that and also changed agreements on prices,” a source said.
Siyenza Group has its headquarters in Johannesburg and a satellite office in Berea, East London.
ADM municipal manager Chris Magwangqana admitted the Siyenza Group was awarded the tender without following regular supply chain management tender processes.
He also admitted that about R286-million of the money was a loan from the Development Bank of Southern Africa (DBSA) as part of the Municipal Infrastructure Grant (MIG). He defended the municipality saying it needed to urgently appoint someone as the MIG had time-frames which needed to be met.
“Due to the limited time-frame set by DBSA and National Treasury another process of appointing – utilising section 32 of the SCM [supply chain management] regulation – was used.
As such the normal tender process was not followed,” Magwangqana said.
DBSA disputed this saying the bank did not give time-frames for projects it funded.
“The DBSA does not set time-frames or dictate implementation timelines to municipalities. ADM has been funded based on its future allocations,” DBSA spokeswoman Nonnie Letsholo said.
Siyenza’s Mpeluza also remained defiant this week claiming they had done nothing wrong. He said Siyenza Group had been approached to become the implementing agent for the project on behalf of ADM.
“We were approached by the ADM to assist them in this project and they told us that they had a section 32 rule which allowed them to procure services from a contractor, which is also providing similar services for another organ of state,” Mpeluza said.
He also confirmed that both Sambudla and Itholeng were part of Siyenza Group. He also confirmed the group had sub-contracted health and safety issues to Nolwandle Mantashe’s company and that her son Buyambo was one of her employees.
Numerous attempts to contact Gaga, Sambudla, Nolwandle Mantashe and minister Zulu were not successful.
Questions sent to Presidency spokesman Mac Maharaj went unanswered at the time of writing.
But Gwede Mantashe yesterday saw nothing wrong with his family members, and other politically-connected individuals working on the project.
He said allegations the tender had been awarded to Siyenza due to political connections were “malicious”.
“If my family members are employed in the project, what is a problem with that? My wife worked for Gold Fields, I never received an inquiry from a journalist.
She worked for PPC Cement, I never received any questions. But now she works for a small black company I get questions. I really do not understand the issue here.”
The Dispatch visited some of the sites this week and found very little work had been carried out. Some of the subcontractors have not been paid and the project, launched by President Jacob Zuma last October at Amahlathi municipality, has stalled in other areas.
During a visit to Machibi village near King William’s Town only one toilet structure had been erected. Some community members employed in January to dig holes for the structures moaned about non-payment.