Top Gauteng politician named in murky R1bn deal
ANOTHER leading Gauteng politician has been implicated in a shady deal involving at least R1-billion.
Mandla Nkomfe, a former Gauteng finance MEC once tipped to become premier, allegedly blocked the investigation of a suspicious call-centre contract awarded to a consortium chaired by a former official close to him, a Sunday Times investigation has found.
The revelation comes a week after court papers were filed putting Gauteng chief whip and former MEC for health Brian Hlongwa at the centre of alleged tender corruption involving R1.4-billion.
The five-year call-centre contract, worth R1-billion, was awarded to the politically connected Sibiza consortium in 2007 without going to tender, breaking Treasury rules.
The consortium was stacked with former civil servants. They included its chairman and former director-general of public service and administration, Robinson Ramaite, former Gauteng treasury official Cecil Maswanganyi and former Centre for Public Service Innovation CEO Glenda White.
The deal was cancelled in 2010 amid concerns it had been awarded irregularly and that the company had been overpaid. Officials said the job could have been done for a fraction of the cost.
Nkomfe, who is seen as close to Gauteng ANC chairman Paul Mashatile, is an ANC veteran with more than 33 years as a party member. Until 2010, he was deputy provincial ANC secretary under Gauteng premier David Makhura, who is the provincial secretary.
The Sunday Times has uncovered that:
Under Nkomfe’s watch, the department blew an extra R190-million after a penalty paid to Sibiza for cancelling the contract jumped from R97.8-million to R279-million;
Nkomfe sent Gauteng finance head Stewart Lumka a text message telling him to stop proceedings involving Sibiza;
The Gauteng official who chaired the committee that approved the deal, former finance chief operations officer Mulaudzi Khutsoane, received R100 000 in directors’ fees from Atio, a company linked to the Sibiza consortium, while the contract was running and during exit negotiations; and
Khutsoane enjoyed a long- standing business and professional relationship with Sibiza chairman Ramaite.
An internal memo signed by Nkomfe on January 9 2010 reveals officials were mandated to negotiate a “full and final settlement” with Sibiza “up to a global amount of R97.8-million”.
But three months later, after officials held a series of secret meetings with Sibiza, the department agreed to increase the penalty almost threefold, to R279-million. By August 3 2011 a total of R287 391 193.54 had been disbursed.
Lumka, who is under suspension for an unrelated matter, said negotiations for the dramatically increased settlement had been completed by the time he joined the department in May 2010. In September, alarmed at how the costs had ballooned, he instructed Fundudzi Forensic Services to investigate the deal.
On October 6 2010 he received a text message from Nkomfe instructing him to “stop all court processes regarding Sibiza”. Based on this instruction he cancelled the investigation.
Nkomfe denied he had ordered Lumka to halt the probe. “Those guys wanted to take us to court and I was asking him to settle amicably,” he said.
Nkomfe confirmed he had known Ramaite since they were students at the University of the Witwatersrand “and as an activist” but denied they were involved in any secret business relationship. “He’s just a comrade,” he said.
Sibiza chairman Ramaite confirmed a long history with Khutsoane, the official who approved the deal while a paid director of consortium member Atio.
They studied together at Wits, “he worked for me as a consultant and we were in government together”, he said.
He was “certainly not aware at the time” that Khutsoane was an Atio director. He conceded he knew Nkomfe “as a comrade here in Gauteng” but denied “any special relationship with the MEC. Otherwise I would have had to declare it.”
He disputed suggestions that Sibiza had overcharged the province by hundreds of millions of rands.
“The call centre run by Sibiza employed a minimum of 300 call- centre agents and a maximum of 600 at full operation and fielded an average of 300 000 calls a day,” he said.
“The overall cost of running such an operation included salaries, licences, Telkom costs, computer equipment and operations and facilities management.” He said the final settlement was for R97.8-million, and the extra R190-million for “outstanding invoices and related contractual matters, such as staff termination costs and unpaid Telkom fees”.
“The idea that someone was ‘persuaded’ to pay more is both factually incorrect and misleading,” he said.
However, the second “final settlement” for R279-million includes four invoices totalling at least R145-million for “termination of the services agreement”.
Several attempts to reach Khutsoane proved futile.