Alleged tender fraud implicates Arthur Zwane, who was the chairperson of the ANC in the Emalahleni Region while Afzul Rehman was the ANC’s regional treasurer.
All over the country, large TV screens were being put up in public viewing areas, so that the people whose lives were touched by Nelson Mandela could watch his funeral.
In Newcastle, a small band of ANC cronies allegedly used this as an opportunity to exploit Madiba’s memory to make a quick R800,000, according to seemingly damning evidence presented in a forensic report uncovered by Newcastle Advertiser in part seven of its investigation.
The instance of alleged tender fraud implicates Afzul’s close friend, Arthur Zwane, who was the chairperson of the ANC in the Emalahleni Region while Afzul was the ANC’s regional treasurer.
The initial investigation into the procurement of the PVA (public viewing area) screens found that a senior manager at the municipality gave his assistant an instruction to invite six specific service providers to quote. The assistant noticed, according to the report, that some of the companies did not appear on the municipal database of suppliers.
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Two companies that submitted proposals on time were disregarded, as they allegedly did not meet the requirements stipulated. Instead, a company that submitted its proposal after the close of the bid was awarded the contract at five times the amount that it cost to provide the service.
An in-depth investigation by KZN Treasury uncovered irregular, fruitless and wasteful expenditure. Of the six service providers named in a hand-written list, two companies responded within the closing date and time, as reflected in the municipality’s tender register.
One submitted a quote for R189,500, while the other quote came to R107,750 with an alternative quote of R337,500. Quotations of R994,500 that were received by both Ilima Events Management Solutions and Insikelelo Trading and Projects were also considered despite the fact that these companies had submitted their quotations after the closing date and time.
Insikelelo was eventually awarded the contract despite not being registered as a service provider on the supplier database – reportedly a prerequisite for the granting of a tender. The company that quoted R189,500 was able to provide larger screens than those required and had arranged screens in anticipation of the demand.
This company had submitted all of the required documentation, aside from the tax clearance certificate, which accountants confirmed in writing they were still waiting for, but the company never received an explanation as to why its bid was unsuccessful. The entire procurement process, according to the report, and the technical evaluation of the bids was handled by the municipal manager, Kebone Masange.
Masange first awarded the contract to Ilima. Later Masange awarded the contract to Insikelelo instead, after he received a letter from Ilima which withdrew due to family reasons. A municipal official later admitted to forensic investigators he was aware that Ilima and Insikelelo were related companies, and he was not comfortable with the award.
Arthur Zwane’s wife Lethukuthla was listed as the director of Ilima, while Jabulisile Mthembu was listed as the sole member of Insikelelo.
However, quotations received from Ilima and Insikelelo were for the same amount, both companies shared a common address, they each forwarded exactly the same proposal, changing only the name of the company, and both proposals were hand-delivered to the municipality by the same person.
Most of the forms required for database registration had not been submitted by Insikelelo, and the company’s tax clearance certificate had expired. Furthermore, there was no signed service-level agreement between Insikelelo and the Newcastle Municipality.
Forensic investigators uncovered a payment of R945,000 to Insikelelo on December 19, 2013. One of the rejected bidders said he received a phone call from an Insikelelo representative the day after the bid opened, requesting him to provide the screens and additional equipment. This company eventually provided screens at all five public viewing areas in Newcastle, as well as the resources required to manage the event, and billed Insikelelo for R196,319.
Investigators were unable to interview the company’s representative regarding the allegations against it, as a cellphone message indicated that “the subscriber was unavailable”. Newcastle Advertiser’s attempts to track down the contact details of any representative of Insikelelo included consulting with Zwane, whose business address was the same as that of Mthembu, CIPC records and internet searches. These attempts were equally unsuccessful.
“There was fruitless and wasteful expenditure that was incurred to the value of R798,181 as Insikelelo was paid R994,500 although they did not undertake the work themselves,” commented investigators in the matter.
Mrs Zwane, when approached for comment about why the two proposals looked identical, said she could not remember the details of the tender as it was some time ago. However, she denied Ilima and Insikelelo worked together.
Mr Zwane blamed Dr Ntuthuko Mahlaba for the insinuation that he was associated with any tender fraud with regards to screens.
“Mahlaba’s strategy of creating unfounded allegations linking me to fraud is tiresome. I took a stance not to have any direct business dealings with the municipality.
“I’m challenging him to go and open a case of fraud,” he concluded.
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