Joe Slovo’s handpicked Director General, Billy Cobbett, asked the auditor general to investigate a R185-million housing project in Mpumalanga – and lost his job. Stefaans Brmmer, Mungo Soggot and Peta Thornycroft report
BILLY COBBETT, Director General of the Department of Housing, has been fired after asking the auditor general to investigate a multi-million-rand housing project in Mpumalanga. The R185-million Mpumalanga Rural Housing Project – the largest yet under the government’s housing subsidy scheme – was awarded in January to an unregistered company run by Thandi Ndlovu, a friend of the Housing Minister, Sankie Mthembi-Mahanyele.
Cobbett had been unaware of the negotiations leading to the award of the project. A key player in the project was Nedcor’s general manager for personal credit, Kevin Gibb, who was fired this week. Gibb had a close relationship with Mthembi-Mahanyele, which is understood to have troubled Cobbett.
After he moved to Nedcor in late-1994, Gibb, formerly with Absa, hired Ndlovu’s sister, Granny Seape, also from Absa. She was appointed to head the bank’s low-cost housing department. Seape resigned last month.
Cobbett was a close confidant of the late Joe Slovo, Mthembi-Mahanyele’s predecessor and the architect of South Africa’s mass housing programme. The housing minister has expressed the view to senior African National Congress officials that Cobbett frustrated attempts to promote black economic empowerment.
Mthembi-Mahanyele claimed this week Cobbett had ”asked to be relieved of his duties” on May 5. But numerous other sources have said Cobbett did not leave voluntarily.
A senior ANC official said the minister had taken the decision after consulting Deputy President Thabo Mbeki. A representative of the deputy president said Mbeki was unavailable for comment at the time of going to press.
Mthembi-Mahanyele said Cobbett had told her he was going to the auditor general on the eve of the project’s April 24 public launch. ”At this point he was very incoherent as to what the issues were,” she said.
Cobbett, a leading development academic, is the most senior ANC-appointed civil servant to be axed – after serving three years of a five-year contract. His treatment is believed to have startled senior liberation movement members. Cobbett himself refused to comment.
Cobbett’s dismissal coincides with preliminary investigations last week by the auditor general into the project. Deputy Auditor General Bertie Loots confirmed Cobbett had asked the auditor general’s office to investigate the Mpumalanga Rural Housing Project. Loots said his office had started the investigation and a ”report will be finalised in due course”.
The winner of the contract was a black- controlled company, Motheo Construction, headed by former Umkhonto weSizwe commissar Thandi Ndlovu, who is now a businesswoman and medical practitioner.
While in exile, both Ndlovu and Mthembi- Mahanyele worked under Mbeki, then head of the ANC communications division, on a women’s programme broadcast by Radio Freedom.
Ndlovu this week acknowledged her friendship with the minister, describing her as ”my mentor”. She said she did not see any conflict of interest arising from her relationship with the minister, adding that ”anyone who was in exile has a close relationship”.
It is understood Cobbett was concerned that the R185-million contract, approved in January, had been sealed before Motheo was set up as a company in February – implying the award had been made to an individual, Ndlovu, rather than a company.
As the accounting officer for all housing projects, he is believed to have been concerned that key procedures had been flouted.
Meanwhile, Nedcor said this week it had axed Gibb on Tuesday after he was found guilty of misconduct at a disciplinary hearing in which he declined to participate.
A Mpumalanga provincial government representative told the Mail & Guardian that Gibb – affectionately nicknamed ”Mr Housing” by some Mpumalanga housing officials – had introduced Ndlovu to its senior housing officials, paving the way for the successful bid.
It is understood that Seape, Ndlovu’s sister, facilitated the bank’s involvement in the project.
Nedcor’s company secretary, Willem Kruger, would only say Gibb’s sacking ”related to non-adherence to internal credit policies”. But a senior Nedcor source confirmed one of the issues which had triggered Gibb’s dismissal ”related to the [Mpumalanga] project”.
Gibb this week said he ”completely supported Motheo, which was competent to deliver meaningful housing”. He confirmed he had arranged R1,2-million finance for Motheo, which had switched to Absa bank after Nedcor bounced a R1-million cheque of Motheo’s.
He said he was ”passionate about low-cost housing” and he had developed a ”close relationship” with the minister.
Gibb said it was not a problem that Motheo, which had the initial backing of construction giant Murray & Roberts, lacked a track record as the money would only be paid to it on delivery of houses.
Cobbett is understood to have approached Nedcor head Richard Laubscher after uncovering what he believed to be serious irregularities surrounding the Mpumalanga project.
Ndlovu this week said Motheo had never received bridging finance from Nedcor, and said she was astonished that Gibb had been axed.
The project was publicly launched on April 24 by Mthembi-Mahanyele and Mpumalanga Premier Mathews Phosa. They said at the time that more than 10 000 houses would be built in a year.
About 120 houses have been built since the launch. If Motheo honours its ambitious target, it will be on a par with leading, established players in the field.
An executive of a rival company this week questioned Motheo’s capacity to deliver on such a scale. But Job Mthombeni, a co- director of Motheo who has his own construction operation, said this week he planned to build only 5 000 houses in the first year.
Mpumalanga’s Housing Department chief, Steve Ngwenya, this week confirmed that the contract with Motheo was signed on February 14 after the R185-million contract had been approved in January. Johannesburg attorneys Jay Incorporated, which set up Motheo for Ndlovu, said Motheo had been set up on February 20 with Ndlovu initially as sole director.
Two company searches by the M&G failed to find any record of Motheo Construction.
Ngwenya said he was not concerned that Motheo was formed after the contract was approved. He said this was a ”technicality”. He had not examined Motheo’s vital statistics because the company was only supposed to be paid on delivery.
Asked whether it was equipped to carry out the project, he said: ”They had their people – a lawyer, a town planner, a civil engineer and a project manager … I never bothered to check their financial capacity myself because they were introduced by Kevin Gibb, who is the biggest friend of this province.”
Ngwenya said he was unconcerned that Ndlovu personally had no experience as a developer because she had assembled a good team. He added that her co-director Mthombeni, who joined the company in March, was an ”excellent builder”.
The allocation of the massive contract to Motheo could scupper attempts by other companies in the province to secure finance for similar housing projects. An industry player in the province said several of them had been warned by the provincial department that there were was little money left to allocate.
”They have been begging developers to come in [but] now they say there is no money. It just doesn’t add up.”
Ngwenya confirmed that he and the provincial housing board chief, Saths Moodley, had been called into the auditor general’s office last Friday and said he believed they had provided satisfactory answers to all the questions pitched at them. ”The only aspect we will land up being criticised for is that we are over- committed by 10%.”
Ngwenya inisted no rules had been flouted and that the decision to award Motheo the contract had had nothing to do with Minister Mthembi-Mahanyele.
Moodley dismissed any talk of irregularities and said the board was delighted to be ”empowering” black developers.
At Motheo’s lavish launch ceremony last month, Mthembi-Mahanyele said the project would improve the government’s poor track record of providing rural housing. Her parting shot at the launch was: ”We are building homes. We are eliminating corruption. We are improving technical efficiency. We are building capacity. We are delivering.”