Tangled web: Corruption-accused Edwin Sodi was still a director of NPR Projects when it was granted a tender to build temporary shelters at Duncan Village, although Minister Lindiwe Sisulu said this was not the case. (Delwyn Verasamy/M&G)
Human Settlements Minister Lindiwe Sisulu may have misled parliament when she denied that a company linked to fraud- and corruption-accused businessman Edwin Sodi received no contracts in the allegedly corrupt R300-million Covid-19 temporary housing programme.
A Mail & Guardian investigation has established that Sodi was a director of NJR Projects, which, according to official parliamentary documents received more than R173-million to construct temporary shelters in Duncan Village in the Eastern Cape.
The M&G investigation follows a series of recent Eastern Cape housing stories, including that a treasury probe unearthed R341-million “irregularly” went missing for much-needed housing development, and that the provincial government had given up on retrieving the lost loot.
The Special Investigating Unit (SIU), in a report delivered to parliament’s standing committee on public accounts (Scopa) on 2 June, also uncovered gross irregularities and misconduct in the awarding of contracts in Duncan Village for the housing project termed “temporary transitional residential units”.
Documents sourced by the M&G following the SIU’s Scopa presentation showed how Sisulu seemingly misled parliament — possibly because she had been given false or inaccurate information — about the Sodi-linked company receiving lucrative contracts.
Sisulu’s response was recorded in a written reply to a parliamentary question by Democratic Alliance MP Emma Powell.
The housing project was part of the de-densification of the largely impoverished and congested Duncan Village, in efforts to curb the spread of Covid-19 in the Eastern Cape township and other informal areas across the country.
Sodi, who is facing more than 70 counts of fraud, corruption, money laundering and asbestos contraventions relating to a contentious R255-million Free State contract, along with suspended ANC secretary general Ace Magashule and 13 others, was an NJR Projects director when the shelter tender was issued in April last year. He resigned a month later.
Corruption-accused Edwin Sodi. (Lubabalo Lesolle/Gallo Images)
A company search conducted by the M&G found that NJR Projects has the same registration number as the G5 Group, which also lists Sodi as a previous director.
Sodi’s registered cellphone number appeared to have been disconnected when the M&G tried to contact him for comment. NJR Projects (or G5 Group) director Angelique Moodley did not answer her phone, nor did she respond to voice and text messages sent to her for comment.
The SIU on 2 June said it found that the total value of the Duncan Village project was more than R300‑million, and that only 279 of the expected 1 800 temporary shelters were built in the township.
This equated to a staggering R166 000 for each shelter, with R253‑million worth of units, labelled as “wooden shacks” by Duncan Village activists, still outstanding.
“The contracts of the service providers appointed were also extended by five months through an approved deviation; however, the deviation was not justified. The SIU will recommend that civil proceedings be instituted to set aside the contracts awarded, and to recover all monies charged and paid to the service providers,” reads the SIU’s report.
The auditor general in a document titled First Special Report on the Financial Management of Government’s Covid-19 Initiatives, also flagged a number of irregularities related to the temporary shelter projects. These included that the human settlements department may have been spending funds on beneficiaries who did not meet the criteria for occupying a temporary shelter, and that the units were occupied prior to the official handover by people who were not the intended beneficiaries.
Meanwhile, on 6 November last year, Sisulu denied that NJR Projects (or G5 Group) received any contracts for the Duncan Village programme.
“I have been informed that the national department of human settlements, the Community Schemes Ombud Service, the Estate Agency Affairs Board, the National Housing Finance Corporation, the National Home Builders Registration Council, the Social Housing Regulatory Authority, and the Housing Development Agency (HDA) have not awarded any tenders to the company referred to by the honourable member [Powell] during the period 1 May 2019 to 31 October 2020,” reads Sisulu’s written response.
“My office referred this matter along with all substantiating evidence to the SIU and the Hawks in April. As a result of the DA’s referral, this contract is now the subject of a full investigation,” Powell said.
Powell denied that she was facing any action from Sisulu or her office. “As for legal action, I can confirm that that despite having received an outdated letter from the minister last month threatening legal action, I have not received any formal summons. These are just the minister’s usual, underhanded intimidation tactics which I have unmoved by,” Powell emphasised.
Human settlements ministry spokesperson Steve Motale vehemently rejected the allegation that Sisulu had misled parliament.
“The minister will never mislead parliament; any insinuation to the latter is dismissed with [the] contempt it deserves. We would like to draw your attention to ‘I HAVE BEEN INFORMED’,” his response stated, stressing the fact that Sisulu was acting on information as received. “Please note that Emma Powell is creating a diversion. She is facing legal action from Minister Sisulu. She must explain herself in court and not through the media.”
On whether Sisulu knew the shelter project was flagged for gross irregularities, Motale said: “Yes, the minister has been made aware. She has since directed the HDA to conduct a full forensic audit into the award.”
Asked whether the minister was aware that NJR Projects had the same registration number as G5 Group, Motale said: “The appointment of service providers for the construction of transitional residential units was done by the HDA through the accounting officer. Ministers do not get involved in procurement processes.”
Duncan Village
HDA spokesperson Tshepo Nkosi said the agency had invited 234 “alternative building technology service providers” from “approved panels” for the shelter project. Nkosi added that the HDA was paying a “cost-efficient” R64 000 a unit.
“The HDA is currently undertaking forensic investigations into the awarding of contracts as a response to the Covid-19 pandemic in order to get to the bottom of any irregularities, and is committed to taking the necessary remedial action that may emanate from this investigation. As a responsible state entity, we shall cooperate with any law enforcement agency to root out corruption in our sector,” Nkosi said.
On whether the HDA knew that NJR had the same registration number as G5, Nkosi said the company’s appointment was in line with the Preferential Procurement Policy Act, and that NJR scored the highest of the invited bidders.
“It is important to note that at the time of [the] appointment of NJR, there were no legal reasons known to the HDA that would impede this appointment. The appointment was made in line with all supply-chain management procedures, and all the legal prescripts required for appointing a service provider.”
*This article has been updated to reflect comment from Emma Powell
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