The Ministry of Public Enterprises has given Nabera, the company which runs ailing state diamond company Alexkor, a deadline to fulfil its contractual obligations. Donna Block and Mungo Soggot report
The Minister of Public Enterprises, Jeff Radebe, moved swiftly this week to extricate himself from the controversy surrounding a consortium chaired by his wife, Bridget, which won a contract to manage state diamond company Alexkor.
Radebe has thrown down the gauntlet to the consortium, Nabera, which has come close to flouting its contractual obligations, but which has until now appeared to enjoy lenient treatment from the government.
The minister also announced that he was sacking the Alexkor chair and three board members as part of a drive to improve corporate governance in parastatals.
He accused the errant board members of “neglecting their fiduciary responsibilities”, and questioned their competence to run the mine, which is notoriously unproductive and the victim of systematic diamond theft.
Nabera was supposed to come up with a R120-million loan by June to fund development at Alexkor and prove its financial mettle. Nabera has to date failed to come up with the funds.
Radebe’s department, which presides over Alexkor, has authorised at least two extensions of the deadline, leading to speculation that Nabera could be enjoying special treatment because of the relationship between its chair and the minister.
Radebe was minister of public works when Nabera won the contract in February, but has been involved with negotiations surrounding the Nabera contract since his appointment in the June Cabinet reshuffle.
Nabera has said it has the money lined up from a local financial institution, but that the institution has insisted that the government provide an unequivocal guarantee to repay the cash at the end of Nabera’s two-year management stint.
During the past few weeks there has been speculation that the government could provide this guarantee, which would have exposed Radebe to allegations that he was being unnecessarily lax and generous with his wife’s the company.
But at a press conference in Pretoria on Thursday, Radebe ruled out such a guarantee, and said that if Nabera failed to come up with an “unqualified” R120- million loan facility by October 7, “the contract will be considered terminated as it stands”.
Radebe said that if Nabera missed its October 7 deadline, the government would open up a new bidding process for the management contract.
Nabera beat major diamond industry stalwarts, including De Beers, to win its contract, which is seen as a precursor to the mine’s full privatisation.
Meanwhile, Radebe also announced he had fired the chair of Alexkor, advocate Nono Goso, and three other board members because of the findings of a probe into alleged irregularities that was undertaken by the director general of the Department of Minerals and Energy.
Radebe said a forensic audit would now be launched into, among other things, a missing R6-million that was supposed to be set aside for environmental rehabilitation, and a company car allegedly used by the Alexkor chair for private use.
The decisions about Nabera’s contract and the axing of the board were endorsed on Thursday by an interministerial Cabinet committee that handles the restructuring and privatisation of state assets.
Asked whether the ministerial committee had broached the issue of whether he should recuse himself from dealing with Nabera in future if the company stayed on at Alexkor, Radebe said there had been “no conflict of interest thus far” as he had not been minister of public enterprises when Nabera was selected.
Probed further about his involvement with Nabera’s deadline extensions and whether he might recuse himself in future, Radebe said he would consider the matter if and when a problem arose.
Radebe’s Director General, Sivi Gounden, said his department had taken a relatively long time to decide on how to deal with Nabera because it wanted to compile a plan to safeguard the mine from the inevitable disruption that would follow a termination of Nabera’s contract.
“We wanted to ensure that there was an appropriate strategy in place so as not to shut the mine,” Radebe said.
Both the minister and his officials stressed the social implications of the closure of Alexkor, which is a major job provider in Namaqualand. They said they had lined up officials from other parastatals, such as the Industrial Development Corporation, who would deployed to the mine as a caretaker management.
The new interim team will keep the mine running if Nabera fails to meet its October 7 deadline and a new bidding process for a new management contract is launched.
Radebe also announced the appointment of new Alexkor board members and a new acting chair, who will supervise the caretaker management until a new board is appointed.
Gounden said he believed that the Department of Public Enterprises had now addressed all the questions that had been raised during the controversy.