Tenders: On-Point accused gets lifeline
Kagisho Dichabe, the businessperson in the dock with Julius Malema, is now accused of getting a "money-for-jam" contract from the Northern Cape.
Dichabe's company, Kopania Engineers, received R4.6-million between April and October this year to provide "technical support services" to the Northern Cape public works department. This entails performing the simple task of data capture and consolidation for the expanded public works programme. The contract appears to have come to Dichabe's rescue at a time when the anti-corruption task team – comprising the Special Investigating Unit, the Hawks and the South African Revenue Service – were closing in on Malema's associates for tender-related irregularities in Limpopo.
A source familiar with the department's affairs alleged that the contract was given to Kopania at the behest of Northern Cape ANC strongman John Block, who is a known political ally of Malema's.
This is denied by the department, which said Kopania scored the highest out of four firms approached to bid in a "closed tender". Although there is no evidence to suggest that Malema is a beneficiary of the Northern Cape tender, or that he had any knowledge of its award to Kopania, the source claimed Block wanted to help a friend of a friend.
Block's childhood friend from Upington, Kholekile Nogwili, is the head of the department. Nogwili denied the allegations, saying that he strongly disapproved of "the malicious [suggestion]" that he was "acting as a proxy for MEC Block".
Block had not responded by the requested deadline.
Department staff are said to be unhappy that the contract was not tendered openly and that Kopania – a Gauteng-based company with no apparent IT specialisation – had been brought in to perform the data-capture tasks. They claim that the department already employs two data-capture clerks and that if more were needed they could have been recruited locally in a province that has staggering levels of unemployment and poverty.
But the department said that a consulting engineering firm was needed because "provincial departments and municipalities performed dismally, not meeting expanded public works programme targets".
Kopania had hired seven staff members from the Northern Cape, the department said.
Payment records show that Kopania has received a steady monthly income of between R572 745.69 and R796 305.05 from the department since April this year. Timesheets and invoices submitted to the department by Kopania show that Dichabe charges R1 920 an hour for his services, a supervisor costs R970 an hour and data capturers R700 an hour.
After a 35% discount, the department said it paid Kopania R1 248 an hour for "management fees", R631 an hour for "supervisory fees" and R455 an hour for data-capturing.
Industry professionals with years of experience in providing outsourced IT services to the government reacted with a mixture of shock and amusement at these fees. "Seven hundred an hour for a grunt job which requires a little bit of skill but could be done by a student or anyone with a computer-proficiency certificate is outrageous," said one professional. "I pay my data capturers R70 an hour maximum," said another.
In one bill seen by the Mail & Guardian, data collection and capturing made up 60% of the total.
The consultant agreed that Dichabe's "management fee" was within the top bracket, but said senior managers usually had several projects going simultaneously so would "go in for no more than an hour or two, troubleshoot, then leave".
Dichabe billed the department for 86 hours of work in one month.
"Based on the skill, expertise and services provided to the department, the Kopania fees are justified," Dichabe said.
Asked whether he intended to fund his defence in the On-Point trial from the proceeds of the public works tender, Dichabe said "that's a valid point" but that he had had no association with On-Point since mid-2010.
Malema said he was "not involved" in Kopania and that it was Dichabe's "independent company".
In March 2012, the ANC's Northern Cape provincial chairperson, John Block, openly declared his support for newly expelled ANC Youth League leader Julius Malema at an "economic freedom" lecture in Kimberley.
Block said the media was hoping that the ANC would distance itself from Malema, but the party could not throw away one of its own.
Block and Malema's comradeship was forged on the sidelines of the Northern Cape ANC's 2008 provincial conference by a mutual love for Jacob Zuma.
A pro-Zuma source in the Northern Cape said Block was not initially a supporter of Malema. However, a violently contested race for the Northern Cape ANC's provincial chairperson position in 2008 meant that Block needed the provincial youth league's support to be re-elected. His opponent at the time, then-provincial secretary Neville Mompati, was perceived to be a supporter of Thabo Mbeki.
Malema addressed the August 2008 conference and the youth league in the province has remained loyal to Block and Malema ever since, organising "hands off" campaigns for both and attending a night vigil on the eve of Malema's Polokwane court appearance in September.
The ANC in the Northern Cape has yet to declare support for either Jacob Zuma or his possible contender, Kgalema Motlanthe.
But ANC members say two Northern Cape regions have nominated Motlanthe for the ANC presidency. - Sarah Evans
Business associates bound by history, adversity
There is no evidence to suggest that Julius Malema is a beneficiary of the Northern Cape public works contract to provide "technical support services", but his fate and that of Kagisho Dichabe have been entwined for some years:
- But two years on, he finds himself sharing a dock with Malema and Gwangwa. In September, the Hawks charged Dichabe and Gwangwa with fraud and corruption and Malema with money laundering for their involvement in On-Point. Last month the public protector declared the contract awarded to On-Point "unlawful, fraudulent and corrupt". "We have not had any business relations with On-Point [and its shareholders] since 2010 when we left the company," said Dichabe. Dichabe and Malema both held a stake in On-Point Engineering, which won a R52-million roads management contract in Limpopo in 2009. Dichabe sold his stake in On-Point to Malema and his business partner, Lesiba Gwangwa, in August 2010 to pursue other opportunities with Kopania Engineers.
- An unsigned shareholders' agreement prepared in June 2010 proposed that Guilder Investments 59, the company through which Malema and Gwangwa held shares in On-Point, would be the majority shareholder in Kopania Engineers.
Innocentia Motau, who represented another company nominated in the shareholders' agreement, confirmed the content of the proposed shareholding agreement – including Guilder's proposed participation.
Kopania had planned to partner with a Dutch company in a massive renewable-energy project at Saldanha Bay in the Western Cape, Motau said, but the company's involvement was dependent on the project going ahead. It fell through last year and the proposed shareholding was never consummated.
Malema denied knowledge of Guilder's proposed shareholding in Kopania. He referred the Mail & Guardian to Gwangwa, who said Guilder was "not involved" in Kopania at any stage.
Dichabe is not a director of Kopania, but Thomas Rasethaba, his colleague and founder of a
trust that also had a stake in On-Point at one stage, is a director. – Lionel Faull
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The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.