The following is the text of the Gauteng
finance department’s response to allegations levelled against the Gauteng Fund:
The fund is the initiative of the Gauteng provincial government. It was initiated by the department of economic development and approved by the executive council.
Broadly the purpose of the fund is to leverage private sector investments into strategic infrastructure projects across Gauteng.
The rationale for the fund is as follows. Despite being the economic hub of South Africa, Gauteng still faces a number of key challenges, the most critical of which are an unemployment level of 23% and an untenable disparity along racial lines in the distribution of services and access to vital infrastructure.
In order to address these challenges Gauteng developed the growth and development strategy, which is designed to meet the socio-economic needs of the people of the province through creation of jobs, thus reducing unemployment and alleviating poverty.
The Gauteng Fund is regarded as the mechanism through which the province’s economic and development goals are capable of being realised through the provision of funding for economic development projects originated within the province.
The fund also represents an avenue for Gauteng to add capacity to the provincial revenue fund by providing capital for funding of projects that are considered necessary for the attainment of the objectives of the growth and development strategy.
Through the fund we hope to accelerate the delivery of key services to the people of Gauteng by leveraging private sector investment into the delivery of these services.
Currently we are finalising the Bill that will facilitate the establishment of the Gauteng Fund. Naturally this process will ensure that the fund complies with all relevant requirements to the functioning of government entities.
Consultation with national treasury on the establishment of the fund is ongoing.
With regards to the employment, travel expenses and remuneration of the fund’s employees, we wish to point out that these are catered for in the budget allocated to the fund’s project office.
We assure the Mail & Guardian the employment of personnel for the fund was done in accordance with the public service requirements.
On the Gauteng Fund
The Gauteng Fund is an initiative of the Gauteng provincial government. All Gauteng executive committee memoranda are confidential documents which we cannot, unfortunately, provide to you. However, all the necessary legal and regulatory registrations and approvals were sought and duly obtained in establishing the Gauteng Fund.
As an initiative of Gauteng, the Gauteng Fund is bound by and committed to upholding all laws and regulations, including the laws that relate to procurement, anti-competitive behaviour and all the provisions of the PFMA. The fund will have all the governance structures typical of such a fund.
The executive council made available an amount of R500-million as seed capital to the fund. This amount is intended to raise an additional R6,5-billion. The Gauteng Fund will invest in strategic infrastructure projects in the province.
In response to all matters pertaining to the report of the Auditor General, the report and its findings have, as yet, to be tabled in the Gauteng legislature and cannot be discussed publicly at this time. We do, however, welcome any future enquiries in this regard once the various financial reports have been tabled and finalised.
The Gauteng Fund was initially established in the department of economic development but it was later move to Treasury since it will fund initiatives beyond what the department is doing.
Current accountability for the establishment of the Gauteng Fund resides under Treasury, which is responsible for all financial matters within the province.
The publication of amounts raised by the Gauteng Fund and information related to investors remain confidential at this stage until the fund reaches financial close.
On Freetel Capital
Gauteng appointed Freetel (Pty) Ltd, an independent and privately held financial services firm, to assist in enhancing and leveraging the provincial government’s financial commitment. Freetel was appointed as fund manager to assist in setting up the fund and raising the necessary funds from the private sector.
The services of Freetel were procured following proper procedures.
On Abigail Puente
Puente was appointed to establish the Gauteng Fund in 2006 through appropriate processes. Once again, as a point of correction, Puente was not dismissed from the GEP [the M&G reports she was suspended]. She moved with her responsibilities from GEP (an entity of the department) into the department.
Furthermore, Freetel Capital and Freetel Telecommunications are two different companies with different objectives and do not represent any conflict of interest.
Freetel Telecommunications has no direct or indirect dealings with the Gauteng Fund. Puente’s interest in Freetel Telecommunications has been properly disclosed.
In conclusion, we are proud to announce that the Gauteng Fund will be officially launched before the end of the year.