Mpumalanga’s controversy-ridden department of public works has been at it again. This time, a top official of the department is alleged to have helped a Telkom employee to hijack a R10-million provincial government contract from the telecommunications parastatal.
The allegations are contained in a confidential draft report compiled by Ramathe Fivaz Forensic and Investigative Accounting Services.
The report, dated November 2003, and now in the possession of the Mail & Guardian, represents the latest in a series of scandals in the department dating from when Steve Mabona was the responsible provincial minister. He lost that job after the April elections and is now an ordinary member of the provincial legislature.
The Ramathe Fivaz report alleges that Auswell Mashaba, then deputy director general of the public works department, authored misrepresentations that were forwarded to his departmental tender committee and to the provincial tender board. This led to a company called Kwa Mahlaba Connect securing a R10-million contract to manage telecommunication systems at the Mpumalanga government headquarters in Nelspruit.
The contract was first awarded to Telkom in 1999. When it came up for renewal in 2002, a contract was concluded with Kwa Mahlaba.
Kwa Mahlaba is part-owned by Muzi Cindi, formerly a Telkom account manager. Cindi was still employed by Telkom when the department awarded the contract to his company.
The Ramathe Fivaz report contains allegations that Cindi was entrusted by Telkom to negotiate an extension of the contract on its behalf when, in fact, his own company secured the contract.
A Telkom spokesperson has confirmed with the M&G that Cindi was employed by the phone company when Kwa Mahlaba was awarded the tender.
He said that Cindi left Telkom on April 5 2002. A letter from the provincial tender board, obtained by the M&G, shows that Kwa Mahlaba’s five-year contract was approved on February 28 2002, more than a month before Cindi left the parastatal.
The Ramathe Fivaz report cites one F Motha, the manager of the Mpumalanga government complex, as saying that Mashaba had changed his recommendation that Telkom’s contract be extended after the initial contract period had expired.
Mashaba allegedly told Motha that Kwa Mahlaba was ”an empowerment initiative formed by Telkom and that the said company would be empowered to continue with the said project and be assisted by Telkom”.
This recommendation was allegedly forwarded to the departmental tender committee and then the provincial tender board — while Mashaba allegedly informed Telkom that its application had been unsuccessful.
Says the Ramathe Fivaz report: ”The [provincial] tender board was under the impression that the awarding of the contract was just an extension of the existing contract and that it was granted to an empowerment company initiated by Telkom.”
Kwa Mahlaba was given the contract without it being put out to open tender.
The provincial government recently issued a statement saying it would terminate the Kwa Mahlaba contract after several irregularities had come to light. ”The government is now considering litigation as well as further investigation of the matter,” it said.
In a recent interview with the M&G, Mashaba denied having made misrepresentations, and described the Ramathe Fivaz report as ”malicious and untruthful”.
”Someone is trying to drag my name through the dirt,” he said, adding that proof should be provided. He also said he could not remember the full details.
Mashaba said provisions within the initial Telkom contract made it possible to proceed without necessarily going to tender.
This is contradicted by the Ramathe Fivaz interpretation of the contract, however, which is that it could be extended only to Telkom, failing which it had to be put out to open tender.
The Ramathe Fivaz report also reveals how, three months after the five-year tender was awarded to Kwa Mahlaba for R180 000 a month, the amount was increased to R265 000 a month.
”No application or approval for this increase was found in any correspondence from the department or the provincial tender board.”
Like Mashaba, Cindi also dismissed the report.
”My understanding of the original document that guided Telkom’s initial contract was that there was no need to go to tender.
”The document said something to the effect that a black-empowerment entity will continue running the contract after Telkom’s contract had expired.”
Cindi told the M&G he saw nothing wrong with his company contesting for the same contract as Telkom even though he was still employed by the parastatal at the time.
Later, through a representative, Cindi added that any ”hijacking” of the contract was ”categorically denied” and that his company was planning legal action against the province for cancelling the contract.
He also denied that he had acted wrongfully against his former employer, Telkom, and said that he had a further contract with the provincial government, which had provided for higher invoicing than the original contract.
The report has recommended ”possible” criminal action against Mashaba.