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Asbestos project highlights the murkiness around government tenders

Tenderpreneur sticks to his guns before the Zondo Commission.
A worker removes asbestos from a roof. Image: Jerry Lampen, Reuters

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.

Read: Free State asbestos project engulfed in corruption and greed

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.

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Yet again the ANC have crafted opaque tendering systems for the benefit of the ANC looters.

Here we have a connected cadre swilling R6000 bottles of imported booze while the lines of unemployed outside our local Builders’ just get longer and longer …… incomprehensible. You can only shake yr head in disbelief. Voetsek ANC.

No matter how many voetseks you hurl, the snout will still be in the trough feeding away. Throw another R350 towards grants and voting for the ruling party is guaranteed.

don’t forget the yellow T shirts, Muks. Just before next year’s municipal elections the country will be flooded with yellow T shirts donated by a tobacco benefactor and the sheeple will vote ANC again. Meanwhile, the connected cadres are making off like Hollywood rockstars. Umbelievable but true.

What a wonderful little business! Drive around with a map and tick off properties with asbestos roofs (which anyone with half a brain can see from 100m away) for R850 a tick.

Sigh …

you can do it from your office with google earth/maps

But it is nice to take a drive and have lunch at a MacDonald’s though ..

This Sodi s%d seems to have a monumental thirst to have gone through about R100k of booze a month. Wonder how he managed during lockdown.
Also not a very competent businessman – not checking spreadsheets created on his laptop and which was emailed to him but never read. I wonder how he got the business. This appears to have been just a slight mistake on everyone’s part – give or take a couple of hundred million here or there……

The ANC blamed the previous government of building cheap houses for the blacks with asbestos roofs. They were going to change that by replacing the asbestos roofs. Meanwhile in the late sixties and seventies most houses had roofs with asbestos whether you were white or black. When you take a walk through so called white areas you will see many houses with asbestos roofs. The scheme to replace the asbestos roofs were a devious scheme to make money.

They should actually go after the people who initiated this project. It was never necessary, as an asbestos roof is not a threat to people living in the house. This whole project was based on false information and politicizing something that should have been evaluated on purely scientific facts. The only danger to people will be to the workers who have to remove these roofs, and only if the same workers do it for several years without the necessary safety equipment and training.

As far as I know, the forming of a joint venture must be declared during the bidding stage and all information about the members of the joint venture as well as any sub-contractors, should be included in the bid document. The evaluation of the bid must include the screening of all parties involved in the bid, because if any one of them is blacklisted or in the service of the state, the bid can not be awarded to this bidder. The people involved in this project, from the bidders to the people who awarded and administered it, were breaking all the rules. Orange jump suits, please!!

Where is SARS, they should be looking at Mr Zulu’s tavern books. This tavern is a money spinner if one customer can buy booze for R600k.

Mr Zulu’s tax returns are key.

End of comments.

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