Pointing fingers: The Tlokwe council gave Future Phambili Petroleum a dubious contract to supply fuel to informal settlements. Residents have complained that the paraffin makes them sick. Photo: Delwyn Verasamy
Opposition councillors and residents in Potchefstroom, North West, are up in arms over a R171-million municipal deal to supply free paraffin to poor residents, labelling it an ANC image-building exercise ahead of next year’s local government elections.
National treasury spokesperson Phumza Macanda confirmed that the treasury has received a complaint about the contract and that an investigation is under way.
Central to the row is the allegation that the three-year paraffin contract, worth R57-million a year, was awarded irregularly by the ANC-controlled Tlokwe council – without a tender or the necessary budget.
Price is also an issue. AmaBhungane has seen the contract, which requires the supplier to provide 12000 units a month at R20.12 a litre. The current regulated retail price is R8.47 a litre “loose”, that is, using one’s own container.
The Democratic Alliance, the opposition party in the Tlokwe council, lodged the complaint about the deal with the treasury and has laid a charge with the Hawks.
AmaBhungane also heard objections from within ANC ranks. An ANC councillor, who did not want to be named, said there was “serious concern” across party lines.
“This is not an ANC or DA thing now, but about service delivery. The main question is how the municipal manager pulled it off without any of us knowing. There is no justification for flouting financial and administrative rules.”
“Buying our support”
The ANC won Tlokwe in the 2011 municipal elections, but has been weakened by a deep split and defections over alleged corruption.
The DA, which won 37% of the vote in 2011, has targeted the municipality as one of the five priorities of its 2016 election campaign.
During a recent visit to Potchefstroom’s informal settlements, Marikana, Promosa and Sonderwater, amaBhungane was also told by a number of residents that the paraffin had a strong, unpleasant smell and that it made their eyes burn and caused respiratory problems.
The council did not respond in detail to a list of questions put to it by amaBhungane, including queries about the alleged health problems, the alleged lack of a tender process, the price and whether budgetary provision had been made.
Instead, council spokesperson Willie Maphosa said the council had appointed a subcommittee that included the chief whips of opposition parties to “engage with” a report on the paraffin programme prepared by the municipal administration. It said the DA had “jumped the gun” by going to the police. “One would have expected them to await council deliberations on the expected report.”
Chris Drift, a community leader in the Marikana informal settlement, said the council “knows we are unhappy about service delivery in this town and we had several protest marches and they are trying to buy us with this cheap paraffin”.
Independent councillor Butikie Mahlabe said that from the outset the Free Basic Alternative Energy Project was an “ANC programme”.
“I was told the launch, on December 11 last year, would be in my ward, but I knew nothing about it. Even on the day of the launch, I was not on the programme. It was the mayor and ANC councillors who made the speeches,” Mahlabe said.
“Due process”
The contract was awarded to Future Phambili Petroleum, also trading as Caltex North West Marketer, to supply mainly residents of informal settlements with 20 litres of paraffin a month, lanterns, paraffin stoves and fire extinguishers.
Through its lawyers, Venn and Muller, Future Phambili said the company had “applied for and was awarded the tender by due process and in accordance with all the required legislation”.
The lawyers added: “Our client’s good name, standing and reputation is beyond reproach and it reserves the right to institute action against any person, persona or legal body which tarnishes its dignitas and fama. Our client will accordingly not respond to your queries, as it has no obligation to do so in law.”
One of the questions the company refused to answer was where it sourced the paraffin. Containers seen by amaBhungane carried the Engen name.
However, Engen spokesperson Gavin Smith said the company had investigated the source of the paraffin as well as the possible use of Engen containers by a third party without authorisation. “This unauthorised usage has been addressed via legal process,” Smith said.
Small fire extinguishers were also distributed, but only one of more than 15 people interviewed by amaBhungane knew how to use them.
“At a price”
Residents in the three informal settlements complained of burning eyes, blocked noses and chest problems, which they linked to the paraffin.
“We use this paraffin because it’s free and we save some money, but this comes at a price,” said one resident, who asked not to be named. “The whole family is sick. I even stopped going to clinic because there’s nothing the nurses can do; they just tell us we must place the stove outside when we switch it off.”
Professor Sanette Marx of North-West University said tests she had conducted on a drum of paraffin provided to Tlokwe residents indicated that the fuel complied with South African standards for domestic paraffin. However, she warned that the current South African standards did not specify a minimum level for aromatics or cyclic components present in the fuel, as is the norm elsewhere in the world.
“The high aromatic and cyclic content in the liquid could cause respiratory problems if the paraffin is used indoors,” Marx said.
DA spokesperson Hans-Jurie Moolman said the paraffin contract had not been advertised or presented to the council before the contract was signed on February 20 this year. Tlokwe municipal spokesperson Maphosa confirmed this, saying the tender was presented to the council on June 20 – five months later.
According to various sources within the municipality, who asked not to be identified, only the municipal manager, Nomathemba Blaai-Mokgethi, and a handful of officials were involved in the contract award.
Blaai-Mokgethi’s office referred queries to the council communications department.
According to two invoices seen by amaBhungane, the municipality paid R1.8-million in February for two delivery runs. Over two days the municipality was also charged R36?000 for food for those employed to distribute the fuel and R5000 for a community liaison officer.
Moolman said there was concern about how the municipality would fund the contract because there was no budget for it.
What also frustrated the councillors was that “it seems the mayor and speaker are not concerned about this. If they were, the municipal manager would be suspended until the investigation is over.” After a request for information about the contract was ignored, Moolman said he wrote a letter to the national treasury and the party laid a criminal case.
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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.