The Gladafrica contract: R524m spent ... and this is what Mangaung roads look like
The Mangaung metro paid Gladafrica R524m and extended its contract despite costly delays
Hazardous, badly marked gaping manholes and a dilapidated road network are all there is to show after Mangaung metropolitan municipality paid more than R524-million to controversial company Gladafrica for infrastructure improvements.
The Democratic Alliance estimates that the metro has paid R2-billion to engineering companies — including Gladafrica — for infrastructure improvements since 2014, although construction only started in 2019.
Mangaung has been accused of illegally extending the Gladafrica contract three times. The company was appointed in the 2014-15 financial year, according to official municipal tender documents.
Work is apparently 35% complete after construction of Bloemfontein’s integrated public transport network, the IPTN, which includes a bus rapid transit system similar to those in Johannesburg, Tshwane and Cape Town, began in early 2019.
Metro spokesperson Qondile Khedama said the appointment of Gladafrica followed the metro’s supply chain management processes and that the contract had been extended once, in July last year, again according to supply chain management policy.
He said that most of the projects were about 60% complete.
According to a confidential metro report, the first phase of the IPTN, which was planned to run from Bloemfontein’s centre to the University of Free State and surrounding areas, was meant to have been commissioned in February this year.
The report added that 10 buses had been procured for the initial phase of the IPTN project.
But the bus depot under construction for the IPTN resembled a muddy car park and looked nowhere near completion when the Mail & Guardian visited the metro last week.
The M&G has had sight of detailed monthly payment breakdowns from Gladafrica documents, in which the company also recorded “no frustrations and delays” to the project and that “the standard of work is acceptable”. Mangaung confirmed that Gladafrica was paid more than R524.1-million.
Gladafrica’s project management office in Bloemfontein did not respond to questions the M&G sent to it a week ago.
The company gained infamy in February 2019 after it had its R12billion contract with the City of Tshwane terminated when the auditor general’s office flagged it as irregular. This, the auditor general stated, followed the flouting of supply-chain management processes when it chose Gladafrica from 26 companies that bid for the three-year contract, which began in November 2017, to assist Tshwane with the rollout of infrastructure projects.
Despite this, Mangaung allegedly “illegally” extended the company’s contract in December 2019, May 2020 and June 2020.
The claims of the illegality of the extensions stem from the alleged contravention of the Municipal Finance Management Act, which, among other things, states that contract extensions are allowed when an advertised tender process for the appointment of new service providers has not been completed, or when the project has not been completed for reasons other than poor performance.
A source close to the management of the IPTN contract told the M&G that the tender was not re-advertised and that work done by Gladafrica was way below standard. The source, who asked to remain anonymous, added that the “rot in the municipality was very bad”.
“We are fighting a losing battle. Maybe you guys in the media can help get us clarity. This municipality needs to be disbanded,” the source said.
This assertion was echoed by another high-ranking municipal insider, who said the Mangaung metro was “broke and badly run”.
DA councillor Mokgadi Kganakga, who has had a keen interest in the IPTN, said the project had not yielded returns and was a bottomless pit eating the taxpayers money.
“The idea behind IPTN is a very good idea, but the Mangaung metro has spent over an estimated R2-billion since 2014 and there is absolutely nothing to show for it but irregular tenders and unfinished roads. The city agreed in October 2020 that by 31 March they would be finished with phase one of the project, but based on what we see it might be another two years and another billion rands before phase one is complete,” she said.
Kganakga alleges that the 10 busses were sought to award a tender to Mothebe Wheels, a company owned by David Mothebe, who has links to powerful ANC leaders in the province, including ANC secretary general Ace Magashule.
Mothebe Wheels made R11-millon as commission for organising a lease contracted for Mangaung, she adds.
“These buses were not bought cash but rather through a lease agreement where a middleman profited R11million, leaving the city to pay interest for the following seven years.
“The 10 buses are currently depreciating, standing still. What the city did — to try and hide the purchase of the buses, they introduced a new route. Phase 1C, that was never part of the original IPTN plan — is illegal.
“This phase is estimated to have financial losses of R29935421 per annum. According to the city’s calculations, the losses are R16million,
but if you take into consideration Covid-19 it goes as high as R30-million per annum.
“A city already downgraded twice and under administration cannot afford these types of losses for one route. If one route’s losses are R30million then this illegal route and the four routes from the location will amount to R150-million per annum,” Kganakga said.
During the M&G’S visit to Bloemfontein, people were navigating around unsealed manholes. Newly-fitted kerbs and pavements were disintegrating, while the drainage system had flooded after last week’s heavy rains.
A doctors’ office on Moshoeshoe Road in Rocklands location, mere metres away from the Dr Molemela Stadium, had to change its entrance because the street has been under construction for more than two years with seemingly no end in sight.
The work creates congestion on the roads into the city’s main townships. The Batho location intersection is a permanent gridlock because of road closures and the delays in completing the construction.
The metro’s Khedama said: “Gladafrica is assisting the city in overseeing the implementation of the road construction projects and the building of the civil works of the bus depot. These construction projects are envisaged to be completed before the end of this financial year, although the city is experiencing community disruptions instigated by business forums. Most of these construction projects are sitting at above 60% completion.
“The appointment of Gladafrica, like any other service provider in the city, was in terms of the city’s supply chain management processes. In the case of Gladafrica, they were appointed before the news [of the termination of their Tshwane contract] broke.
“The Gladafrica contract was only extended once, and it was done legally in terms of the approved supply chain management policy.
“Gladafrica is appointed for a limited period of time (that is, three years from July 2020 to June 2023) and their appointment is based on certain targets as stated in the bid documents and contract. The rollout of the IPTN is over 20 years as per the council approved IPTN plan. Therefore, Gladafrica is only appointed for a portion of works that must be completed within the three years of their contract period.”
Khedama added that bus operations were expected to commence in June, and that delays were caused by negotiations with taxi owners and operators, who had to vacate their routes to make way for the IPTN.
“Most delays come from these types of negotiations and it is understandable because taxis have been operating outside the formal legal structures and to regulate their operations brings uneasiness on their part.
“The causes for other delays, especially on construction projects vary and these include community disruptions, Covid-19 pandemic, and general delay by contractors for which we are imposing penalties as per the contracts concluded.”
Angry residents wanting to “know the full extent of the project” and causes for delays, have held several protests
In February all IPTN projects ground to a halt when residents demanded the metro make public the names of companies that received tenders because, they said, all phase one projects were at less than 50% completed.
“We are fighting a losing battle. Maybe you guys in the media can help get us clarity”