A controversial ANC-linked businessperson and known ANC funder was awarded a multimillion-rand tender on the same day he registered on the municipal supplier database.
Without putting the R165‑million contract out to tender, the municipal manager in Mahikeng – who had apparently been “seconded” by ANC Youth League leader Collen Maine – paid the ANC funder R10‑million as an advance three days later, by an instruction issued as a footnote.
Kwane Capital director Mcebisi Mlonzi is already facing a probe by the Special Investigating Unit over a R92‑million tender in the Eastern Cape. He now faces a Hawks probe over the R165‑million leasing contract.
The controversy over the tender has sparked outrage among government employees.
“Please pay R10‑million,” Mahikeng municipal manager Thabo Mokwena wrote next to a stamp of an invoice by Kwane Capital for an upfront payment of R18-million, on December 18 2015.
Five days later, a municipal receipt shows a payment of R10‑million was made to the company.
The Mail & Guardian is in possession of documents that show how Kwane Capital went from applying for registration on the database on December 15 2015 to receiving the first upfront payment for a contract that had not been advertised just eight days later, on December 23.
The contract was awarded by Mokwena, who is also a member of the North West ANC’s provincial executive committee, after he’d been “seconded” to the position by Maine, who was local government and human settlements MEC at the time.
But Mokwena was not employed in Maine’s office or in his department at the time. Yet his name was on a municipal database of “senior managers” with the “required skills”.
“It is the same database that is used to select the person of the relevant experience in local government to assist municipalities not having accounting officers,” Mokwena told the M&G.
In the council meeting at which Mokwena’s arrival was debated, ANC MPs joined opposition parties in protesting against his “imposition” by Maine.
“Some of us were saying that this was not an ANC deployment; it was clearly the MEC deploying his political ally to take charge of the budget,” said an ANC councillor.
“When you look at what’s happened since he was seconded and then appointed permanently, you can see the agenda.”
Maine’s secondment letter instructs Mokwena to “submit a progress report to the MEC on a monthly basis”.
A senior municipal staff member this week said: “You can’t second somebody who is unemployed. How do you begin to second me from home?
“The deal itself says it’s dodgy. How do you begin to get into the database on the same day you are awarded a tender?”
Mokwena acted as municipal manager until April this year, when he was appointed permanently.
Maine, however, believes his hands are clean and there was nothing irregular about his secondment of Mokwena.
“I am afraid that you might be having a wrong understanding of issues. I hope the provincial government will disabuse and help you from yourself,” he told the M&G.
The upfront payment of R10‑million to Kwane Capital was meant to buy earthmoving plant and construction equipment, as well as vehicles, to lease back to the municipality, because Kwane Capital Fleet Services did not have any equipment, despite being awarded the contract.
The total value of the three-year contract is R165.3‑million. Mokwena’s letter of appointment awarding the tender to Mlonzi’s company, which is signed December 15 2015, states: “The appointment is in terms of regulation 32 of total government: municipal supply chain regulations.”
Asked how Mlonzi had secured a multimillion-rand contract, which was not advertised, on the same day that Kwane Capital applied to register on the municipal database, Mokwena said: “There are many ways of sourcing goods and services in the municipality and one of the methods is through regulation 32 of the supply chain policy.”
Regulation 32 gives government entities the right not to put out a tender for some procurements under certain conditions: that competitive bidding has happened through another organ of state, that the municipality has no reason to believe the contract was not validly procured, that there are demonstrable discounts or benefits for the municipality, or that another organ of state and the provider have consented to this deviation in writing.
Mlonzi also said there was nothing abnormal about how the contract was awarded. “As far as I’m concerned, everything was done according to the regulations. That registration and tax clearance was done because the treasury actually wanted that,” he told the M&G this week.
The contract was awarded despite the fact that Kwane Capital’s tax clearance certificate from the South African Revenue Service was only approved on December 22 2015. The payment of R10‑million was effected the next day.
But the municipal manager dismissed claims that his footnote on the Kwane Capital invoice cut through the red tape and allowed the payment to take place just days after the tender was awarded.
“The document that you have [at]your disposal does not seem to paint correct and accurate information. It will be a foolish exercise for the amount of that nature to be derived in [the stroke of] a pen,” he said.
The Democratic Alliance’s former leader in Mahikeng, Lisa Schickerling, claimed the party’s attempts to obtain details about the deal had been continually frustrated.
“Since day one, the DA has questioned the appointment of Mokwena. On February 29  we wrote to the council, requesting the letter of agreement, and to date nothing has been received,” she said in a statement.
The municipality’s fleet manager, who the M&G understands also raised concerns about the contract, has since been suspended on an unrelated charge.
University of the Witwatersrand school of governance professor William Gumede said the speed with which the company went from applying to do business with the municipality to receiving the tender was “record-breaking”.
“How this tender was awarded is highly suspicious and irregular in all forms, to put it politely. These dates are world record-breaking, considering the process that normally goes into the government awarding a tender, especially if the bidding process is competitive.”
The DA’s request for North West Premier Supra Mahumapelo to conduct a lifestyle audit on Mokwena appears to have fallen on deaf ears.
“Mokwena is clearly not fit to run the municipality. As a member of the ANC’s provincial executive committee [PEC], he was parachuted into the position and cannot be trusted to run the municipality without bias. He is there to serve himself and his friends, not the people of Mahikeng,” Schickerling said.
Mokwena said, as long as he was not one of the top six officials in the ANC’s PEC, he was not disqualified from serving in any public position.