On paper: Thandazani Nyide (centre), director of Ndabase Printing Solutions, has been linked to alleged wrongdoing involving tenders in KwaZulu-Natal. Photo: Supplied
An investigation by the Mail & Guardian has uncovered a web of conflict of interest surrounding a lucrative educational material distribution tender in KwaZulu-Natal worth an annual R269.8 million.
The appointed management agent, Ndabase Printing Solutions, has been found to have subcontracted companies linked to its owners, sparking allegations of impropriety.
The investigation found links between the director of Ndabase Printing Solutions, Thandazani Nyide, and Imfundo Press and Printing, which has received sub-contracts from the management agent since the tender began in 2017.
Over the past seven years, the contract has amounted to R1.8 billion.
Ndabase is tasked with sourcing manufacturers and distributors of stationery for the provincial education department, with a view to developing small and medium-sized companies among previously disadvantaged groups.
Amanda Swana, director of Imfundo, and Nyide, were directors of Powerpoint Lifestyle before Nyide’s resignation in March last year.
The M&G investigation also found that Swana was part of the Ndabase-appointed panel of representatives during the July 2019 site inspections of other learning material distributors, which were subsequently removed as sub-contractors, that previously supplied the province’s schools in favour of companies linked to Nyide.
One of the companies, Freedom Stationery, quoted nearly R39 million to manufacture and distribute educational material to 379 000 learners — R25 million more than the cheapest quotes of three companies, and double the amount of one other company, according to documents seen by the M&G.
Moreover, the jobs-for-pals investigation unearthed that Moosa Ntimba — the director of Matumaini Stationery Manufacturers, which received more than R37 million from Ndabase to supply 317 000 learners — worked for Ndabase as part of its executive management team.
This is not Ntimba’s first run-in with controversy surrounding a provincial education department contract. In 2012, the education non-profit Section27 raised the alarm about the non-delivery of textbooks in Limpopo.
As reported by the M&G, what became known as the Limpopo textbook crisis spiralled into a months-long national story.
At the centre of the controversy was a company called Edu-Solutions, which allegedly secured its R320 million textbook distribution contract from the provincial department under dubious circumstances. Ntimba was a director at Edu-Solutions at the time.
Ntimba’s involvement with Ndabase is detailed in the company’s 2013-14 bidding presentation document, prior to its appointment as the KwaZulu-Natal education department’s management agent. Ntimba opened his company after Ndabase received the 2017 contract.
The cost escalations contravene the Public Finance Management Act, which stipulates that departments should procure goods and services “in a manner that is cost-effective and efficient”.
Allegations of fronting have surfaced, with Imfundo accused of acting on behalf of larger suppliers, evident in the distribution boxes with Freedom Stationery’s branding — of which the M&G has seen photographs — despite them being delivered by Imfundo.
Schools were allegedly forced to use Ndabase-recommended companies, such as Freedom, for their material, failing which the department would not release funds for stationery procurement.
This was according to Mntomuhle Khawula, the Inkatha Freedom Party’s (IFP) representative in the KwaZulu-Natal legislature’s education portfolio committee, during a provincial sitting in 2022.
Khawula claimed that circuit and district KZN education department officials were lobbying for Ndabase, urging schools to accept stationery orders from them.
The South African Schools Act allows section 21 schools — those that are financially self-managed — to order their own material from distributors they choose. It was the section 21 schools that Khawula alleged were forced to order from companies approved by Ndabase.
“Some schools refused to accept these orders on the basis that they were still waiting for their legal orders from their legitimate suppliers,” Khawula claimed, as quoted in an IOL article.
“As the IFP caucus in KwaZulu-Natal, we want to question the department; what is the big deal with this Ndabase? We are even aware that because of their resistance to order from this supplier, some schools were punished by being shortchanged in their norms and standards allocations for 2021‑22,” Khawula added.
His views were supported by a source who was present during Swana’s site inspections at excluded distribution companies.
The source, who asked to remain anonymous, alleged Swana’s presence at the inspections was part of “corporate espionage and antitrust behaviour” to favour Ndabase’s director and companies linked to him.
“The evidence shows how Ndabase had abused the power of being the managing agent to make Freedom more powerful and allowing for the creation of the so-called ‘enterprise development recipient,’” the source said, adding that Imfundo was one of the development beneficiaries.
Hamza Casim of Freedom Stationery dismissed the allegations and said there were no links between it, Ndabase and Imfundo.
The Procurement Bill 2021, which is before parliament, seeks to legislate against persons involved in purchasing state goods and services being related to officials doling out tenders without disclosing a direct or indirect personal connection in a bid to crack down on the undue influencing of procurement.
According to documents, the KZN government began using a management agent to distribute learning material, instead of its previous central system, in 2004.
From 1994 to 2004, the province had a tender system that allowed a number of bookshops and interested individuals to participate in the procurement process.
The provincial education department is notorious for the abuse of state funds, with a Special Investigating Unit report showing that a tender awarded to supply, deliver and install 41 000 water tanks with a 5 000-litre capacity cost R28 000 per tank. The tanks retailed for up to R5 000 at the time.
The SIU also investigated a personal protective equipment tender, looking at procurement issues, agreements between officials and service providers, fraud, overpricing and value for money on purchases. The contracts in question amounted to R183 262 489.
The unit found that service providers did not declare on their bid documents that they had conducted work with other state institutions in the last 12 months, which was a requirement; non-essential items were purchased by the department under Covid-19 emergency provisions; and fraud and forgery were committed by service providers in the submission of the bid documents.
On 30 April, the M&G sent detailed questions to the education department, Swana of Imfundo and Nyide of Ndabase.
They all acknowledged receiving questions but did not answer them, despite repeated calls and text messages asking for responses.