On Wednesday the Judicial Commission of Inquiry into Allegations of State Capture resumed, with Blackhead Consulting CEO Edwin Sodi continuing with his Free State asbestos project-related testimony before the commission.
The commission is now reaching an interesting phase, with implicated persons giving their side of events, which doesn’t always accord with other testimonies.
Advocate Paul Pretorius led the evidence.
Gauteng asbestos project
Blackhead Consulting was on a panel of eight service providers to the Gauteng Department of Human Settlements, and entered into a contract with the department to carry out an asbestos audit, assessing the quantity and state of asbestos in roofs, at a fee of R650 per house. The eradication of the asbestos would be a different project.
Pretorius questioned Sodi on the overall profit made on the contract with the Gauteng Department, asking if the profit made would have been at least R100 million (50-60%) on the Gauteng asbestos project – “well, give or take chair,” replied Sodi.
For a tenderpreneur who is granted an assured profit level of between 50% and 60%, a little bit of give or take either way becomes irrelevant.
Pretorius referred to a letter from the then director-general of the National Department of Human Settlements, Thabane Zulu, to Blackhead Consulting, which gave notice of its appointment to the panel. Pretorius made the point that it is not possible to extend a panel appointment. Sodi replied that it happens in practice.
Free State asbestos project
Nthimotse ‘Tim’ Mokhesi, Head of Department (HOD) of the Free State Department of Human Settlements, communicated with the HOD of the same department in Gauteng, Margaret-Ann Diedricks, to facilitate the finalisation of Blackhead’s contract in the Free State.
The fixed fee of R650 per house was changed to R850 in contravention of the regulations.
Diedricks had confirmed in a letter that the Free State department could only participate in the contract between Gauteng and Blackhead “by means of a competitive bidding process”. Blackhead did not inform Diedricks that it intended to form a joint venture with Diamond Hill.
Needless to say, ignoring Treasury anti-corruption regulations in regard to a competitive bidding process, the Free State entered into a service level agreement with the joint venture.
There was much questioning around why Sodi had not informed Diedricks of the full facts, with Sodi responding, and this went around in circles. But essentially, and as Diedricks confirmed when she testified to the commission, had she known about the joint venture, the contract would not have been extended.
Sodi was firm in his understanding that if only one of the parties had contracted with Gauteng, forming a joint venture was not a problem.
“This is how it works,” he said.
The reason given by Sodi for the increase in the rate from R650 to R850 was that the fee was higher to take care of the “unknowns”, and this time they would be covering the whole of the Free State.
The joint venture subcontracted with Mastertrade, which would be paid R44 million for its services.
Sodi insisted that he never anticipated that the joint venture would sub-contract: “Mr [Ignatius] Mpambani may have had his own expectations, his own plans, and that is demonstrated that he did not conduct himself in the spirit that he should have … I got into a partnership with someone who was not honourable.”
Mpambani was gunned down in Sandton in 2017.
The spreadsheet of bribes
Pretorius raised the matter of the spreadsheet, which had allegedly been prepared by Mpambani. The spreadsheet reflected the full project value as R251 million, with payments to be made to Mastertrade of R44 million, and R1 million each to two individuals – one of whom was Diedricks.
The spreadsheet also contained initials, next to which were payments, amounting to a total of R25 million. Pretorius said that the initials indicated illegitimate payments, made to those who had nothing to do with the asbestos project. Sodi insisted that the joint venture did not make any illegal payments. The profits were going to be split equally between Blackhead and Diamond Hill.
Sodi claimed he first set eyes on the spreadsheet when it was shown to him by the investigators in 2019 (this despite the fact it had been created on his laptop by Mpambani). Mpambani had emailed the spreadsheet to him, but he had never opened it.
Pretorius found this to be improbable.
Pretorius said he was intrigued that Sodi didn’t know what his profit would be until the investigators informed him of it four years later. Sodi replied that he knew what his profit would be, it wasn’t a complicated exercise.
When the investigators asked Sodi who the initials (TZ, OM, NM) represented, Sodi said he had no idea. Despite a rather obvious interpretation of TZ for Thabane Zulu (director-general of the national Department of Human Settlements), TM for Tim Mokhesi, Sodi argued: “I did not want to speculate on the initials … I would have misled the commission … to absolutely say ‘yes, this is so and so,’ would have been difficult for me.”
R600 000 for booze
Sodi had made a R600 000 payment directly to a motor dealership towards a vehicle for Zulu.
Sodi explained that this was in payment of a ‘debt’ to Zulu he had allegedly accumulated over about six months for liquor purchased from Zulu’s lounge (not a bottle store), situated in a township just outside Pietermaritzburg. Sodi gave numerous reasons why it was convenient to purchase the liquor from the lounge, and transport it for a distance of more than 100 kilometres to his home in Zimbali.
Despite the fact that the lounge kept champagne that cost R5 000/R6 000 a bottle, and very expensive whiskey, it did not have credit card facilities, which is why Sodi said he ran up the debt.
Sodi, “without being arrogant”, and who really did not want to “appear to be boastful or arrogant”, informed the commission that there are some “types of alcohol that are very exorbitant”.
Pretorius noted a discrepancy, in that Zulu had given evidence that he had personally delivered the alcohol to Sodi’s home.