BCM IN R300m TENDER FRONTING SCANDAL
Czar Construction’s address in East London is an empty residence with no plant, machinery or signage
A company awarded tenders worth R300m by the Buffalo City Metro has no plant or machinery to perform the work.
The Daily Dispatch can exclusively reveal that Czar Construction’s Regent Street company address in Eureka, East London, which the company has registered as its official office, is not an office at all, but an empty residence without any plant, machinery or signage.
The company, which is said to construct waterworks and repair roads, among other tasks, is owned by a jet-setter, former Mercedes-Benz Robot cell technician Nyameka Tshangana, but sources within the municipality say she is fronting for a Zimbabwean engineer, Simbarashe Hove.
Earlier in November, the Dispatch exposed how the company and three others — Mvezo Construction, Ezulwini and Makali — received the lion’s share of BCM’s selection committee tender spree.
The selection committee was set up by city manager Andile Sihlahla earlier in 2019 to award tenders equally to all companies on the BCM database.
According to documents seen by the Dispatch, of the R270m spent in three months by the committee on more than 40 companies between April and June, Czar Construction received R64m.
In the last five financial years, the company has profited from business with the metro to the tune of R300m.
According to documents seen by the Dispatch, Mvezo, an established company which has offices in Eureka, got work for about R21m from BCM between April and June 2019.
Ezulwini got R19m, while Makali got R33m. The Dispatch’s exposé has prompted the Auditor-General to investigate the committee’s decisions about who these tenders were awarded to.
Three independent sources, who are contractors and service providers to BCM, have confirmed that Czar Construction does not have a plant.
Tshangana’s friend, who worked with her at Mercedes-Benz, said she was an owner on paper but the “real owner is someone else”.
An employee at the company’s Eureka property told the Dispatch he did not know and had not heard of Tshangana but knew “Simba” as the “boss and owner” of the company.
However, according to Companies and Intellectual Property Commission (Cipro) documents, Tshangana is the sole director of Czar Construction — a company that has an annual turnover of more than R50m.
Cipro documents show that Hove is the sole director of a company called Czar Civils cc.
Two BCM sources, with intimate knowledge of the company, allege Czar Construction is a “fronting” company.
The two officials, who wanted to remain anonymous, leaked documents to the Dispatch.
The BCM documents reveal that between the 2014/15 financial year and the current year, Czar Construction has received R302m worth of work from the metro.
The amounts are as follows: 2014/15 — R7.2m;
2015/16 — R43m;
2016/17 — R102m;
2017/18 — R24.7m;
2018/19 — R85.3m; 2019/20 — R39.5m.
In documents the company submitted to the BCM supply chain department, it stated they had a plant worth R5.5m and construction vehicles worth R3.2m.
The Dispatch visited Czar’s Regent Street company address every day this week, finding only an empty residence without any plant, machinery or signage.
Another of the company’s addresses in Cuyler Street has only accident-damaged vehicles.
An employee at the Cuyler Street address told the Dispatch: “You can’t take pictures of this house, come tomorrow morning. This house is owned by Simba. I don’t know that woman you talking about [Tshangana]. Simba is the boss, he’s the owner.”
A source in the construction business, who hires his trucks and plant to other companies, said it was common for small companies to borrow or hire equipment from bigger companies but established companies like Czar “should have their own”.
A second source said: “We started to dig [into the matter] when we noticed this company was getting more work because of the [BCM] selection committee.
“At times they will get four awards in one day ... We know Hove and we noticed that he is deeply involved in this company. He runs it but on paper the owner is someone else.”
The Dispatch has seen a document recording payments made to different companies by BCM, where Czar Construction was awarded more than one tender in a day.
Czar Construction is a big company in terms of revenue: “That company has a R50m turnover, that tells you they are coining it. Czar is one big company in terms of work they are getting from BCM, there’s no way that they don’t have a plant. Hove acts as a manager to Czar though we know he runs this company,” a third source said.
Questions were sent to Czar and Hove, and a company manager acknowledged receipt, saying: “I have sent them to the director [Tshangana] for a response.”
Tshangana would not answer 16 questions the Dispatch sent to her about allegations that she was fronting and that her company has no plant or machinery to do the work.
She said questions should be directed to BCM.
Pushed to answer about allegations that she was fronting for Hove, she said: “I saw your questions but I don’t want to complicate things, let me not answer that.”
Asked if she had seen questions sent to her on Monday and why the Dispatch’s Wednesday deadline for a response was not met, she said: “I saw them, this is complicated. I’d rather not comment.”
Tshangana has travelled the world. According to her social media pages on Facebook and Instagram, in October she stayed at the luxurious five-star Al Bandar Rotana hotel in Dubai.
In July, she was in Paris, where she also visited the iconic Eiffel Tower. She has also been to Brazil, Germany and Los Angeles.
But immediately after questions were asked about Tshangana being a frequent traveller and “not being hands-on in the company”, her Facebook page pictures were removed.
The Dispatch sent questions to BCM spokesperson Samkelo Ngwenya on Wednesday and followed up on Thursday and Friday. He did not respond to cellphone and office line phone calls, SMSes, e-mails and WhatsApp messages.