Bribery claim over consultancy
Ex-acting SAA chief executive recounts ‘haunting’ details of meeting at Gupta homestead
PUBLIC WORKS and Infrastructure Minister Patricia de Lille yesterday told Parliament that her department owed a fraction of the R3 billion in municipal debt.
De Lille told the Standing Committee on Public Accounts (Scopa) that municipalities had confirmed R186 million was owed by her department after reconciliation of accounts.
“After verification and engagements with municipalities, there was a difference of more than R1.7bn from the amount stated in Section 71 reports. This means that once accounts of these municipalities were verified, the actual amount owed was R186m as opposed to R1.9bn that they reported in Section 71 reports.
“This is a significant difference, chairperson, in actual amount owed,” she told the Scopa meeting.
De Lille was leading a departmental delegation to account for her department which was flagged as “the biggest offender” in debts owed to municipalities last December.
Scopa had heard the debt owed to municipalities between 2014 and 2019 increased by over R7bn with the national department owing R3bn and its provincial counterparts owing R3.7bn. The amounts were extracted from Section 71 reports prepared by municipalities for submission to the National Treasury on a monthly basis.
The department pays municipal accounts and in some cases pays Eskom accounts on behalf of all departments and charges them a 5% fee.
Government departments then reimburse the Department of Public Works and Infrastructure.
De Lille said national departments owed her departments just over R3.4bn in relation to municipal services by the end of December. She also said her department started a campaign in August last year to settle all outstanding national government debts owed to municipalities and Eskom.
The minister said they had introduced consequence management which resulted in about 10 officials being disciplined for non-payment of municipal accounts within 30 days.
According to De Lille, as at June 2019, 135 out of 257 councils had reported the debt owed to her department and the remaining 122 had not as per statutory requirements.
“During this campaign it was found the initial reported R3bn was incorrect. This is a serious offence (as) municipalities reported inflated and wrong information in Section 71 reports.”
She named three councils that disclosed astronomical debts with one in Mpumalanga reporting R925.5m only for the reconciliation to confirm R6.9m.
A municipality in Gauteng had disclosed R185.9m debt, but could not provide supporting documents while another in Limpopo had disclosed R362.2m only for the reverification process to confirm only R1.3m.
De Lille said her department was yet to engage another 142 municipalities
“We hope to finish all of these hopefully before the end of the financial year or soon thereafter,” she said.
But, the MPs were concerned that the department had given a conflicting report to one presented to it last December.
ANC MP Bheki Hadebe said: “Today, we are told that we are crucifying the wrong Jesus”, before lamenting that Eskom, inter-ministerial task team and Salga had lied to the committee.
FORMER acting SAA chief executive Vuyisile Kona has detailed the Guptas’ attempts to bribe him in an effort to influence the awarding of a consultancy contract.
Kona appeared at the Zondo Commission of Inquiry yesterday.
He had served briefly as chief executive at SAA between 2012 and 2013. Before that he had served as SAA board chairperson and when he was moved to lead the airline, Dudu Myeni was appointed to replace him.
Kona recalled the “haunting” details surrounding his meeting with the Guptas at their compound in Saxonwold in October 2012.
He detailed how at the time of his appointment as acting chief executive the airline had been facing financial constraints and had to ask for a bailout from National Treasury.
Treasury needed a business plan from the company and Kona had directed his supply chain division to
SIYABONGA MKHWANAZI
CHAIRPERSON of the ad hoc committee on land expropriation Mathole Motshekga has warned political parties not to turn public hearings into the expropriation of land without compensation into the battle of ideologies.
Motshekga told members of the committee yesterday that the start of the public hearings would enable parties and the public to comment on the law to amend the Constitution.
The ad hoc committee is in the process of crafting a law that calls for the expropriation of land without compensation.
The committee will this month begin with the public hearings in various provinces. go on tender to find a consultancy firm that would assist SAA in drawing up a business plan.
Kona said two companies had offered a business case. Lufthansa Consultancy had offered a deal of R6 million while McKinsey and Company had offered a deal for R40m. Kona said it was clear that Lufthansa was the cheapest and most affordable option for the struggling airline.
He said while this deal was under way, he was approached by then minister of public enterprises Malusi Gigaba’s adviser Siyabonga Mahlangu who insisted that he met with business partners. The meeting was with the Guptas at their household in Saxonwold.
Kona said he was unaware that he would be meeting the Guptas.
In October 2012 the meeting took place and present were Duduzane Zuma, Tshepiso Magashule, the son of former Free State premier Ace Magashule, Mahlangu and Tony Gupta.
Kona said he was offered R100 000 in cash by the Guptas on the spot. He
“I want to appeal to members that as we go into public hearings you must listen to what the people say and not turn public hearings into the battle of ideas by political parties,” said Motshekga.
He said all parties were equal before declined to accept the money.
“Then the conversation came to the issue of the business plan. Tony first said he was welcoming me into the family. He said ‘we know you have not been paid’ and offered me R100 000. Indeed I had not been paid my September salary. He then said he could offer me R500 000. I told him I did not need the money. His expression changed and he was ‘like what is the story with the consulting contract?’ Their money was there in cash. I was just not going to take money from a stranger. I started feeling uncomfortable with the whole thing. Nobody is going to give you that much money for nothing,” he said.
Kona said when he refused the money, the Guptas’s attitude changed and they started asking questions about the consultancy contract.
“He asked about the contract and I said the people had been informed (appointed) and he was livid. He asked who was going to be doing the consultancy, and I said it would be Lufthansa. Then immediately after that, the meeting the committee irrespective of their size in the national legislature.
“We are going to attach equal importance to what all the political parties say in this process,” said Motshekga.
EFF deputy leader Floyd Shivambu said the public hearings must be held in areas where the constitutional review committee, that started the process last year, never visited.
It would give impetus to the geographical spread in the country, said Shivambu.
The DA and IFP also agreed that the public hearings should reach areas that had not been visited by the committee.
The committee recommended that a law be drafted to allow for the expropriation of land without compensation.
Annelie Lotriet of the DA said it ended. They (Guptas) called the director-general of public enterprises who was Tshediso Matona and asked him to come and explain what was going on. I walked out,” Kona said.
Matona then called Kona and demanded to know why he had decided not to award the consultancy contract to McKinsey.
“The next week I got a letter from Public Enterprises saying they wanted to investigate the awarding of the contract to Lufthansa. The team (from the department) came and found nothing. The department still would not let me appoint Lufthansa,” he said.
McKinsey has a controversial reputation regarding its work and close ties with the Gupta businesses.
Kona’s relationship with DPE and his fellow board members had deteriorated to such a point that he approached Gigaba for a meeting. The meeting never took place. He said he consulted with Myeni but the former board chairperson appeared uninterested in his concerns over the Guptas and the bribe. would be in the best interest of everyone to accommodate all the views of South Africans.
Motshekga said they would also invite traditional leaders, the clergy and other sectors of society.
“As our President (Cyril Ramaphosa) observed, it’s like we are back in 1996 when we were drafting the Constitution,” said Motshekga.
The ANC admitted in the national legislature that the extension of the deadline to allow for written submissions until the end of the month would force the legislature to extend the deadline for the submission of its report on land expropriation.
Motshekga said as a constitutional democracy, South Africa allowed the public to participate in key decision-making processes and views were important in making laws of the land.