White-owned company in R212m tender scandal
ONE OF the biggest beneficiaries of multimillion-rand contracts from the Dr Ruth Segomotsi Mompati District Municipality was a 100 percent white-owned company with its headquarters in Kimberley.
Izwelethu Cemforce, according to the latest Companies and Intellectual Property Commission (CIPC) data, is owned by Hendrik Lodewicus Diedericks. Diedericks has a 100 percent shareholding.
He previously had a black shareholder, George Mareko of Homelite, near Galeshewe, in Kimberley.
Mareko had 40 percent shares in the company, but he resigned in 2010.
In 2011, Izwelethu Cemforce was given contracts worth R212 million to build pit latrines at various villages in Taung, Bloemhof, Christiana, Schweizer-Reneke and Vry- burg’s Morokweng village.
The figure of R212m was given by the Auditor-General in his 2013/2014 final management report into the affairs of the district municipality handed to North West Premier Supra Mahumapelo and mayor Elvis Tladinyane in November last year.
The contract was for the duration of four years.
However, the municipal manager, Zebo Tshetlho, claimed that the appointment was for R10m.
Despite his insistence that the four-year contract was for R10m, on February 15, 2013, the council’s bid adjudication committee recommended that Izwelethu Cemforce’s total project should be increased from R68m to R102m.
Some of the funds were R34m from the municipal infrastructure grant budget adjustment of the 2012/2013 financial year from the national government.
The amount was for work to be completed until the end of June 2013. In June this year, the council extended the contract until December and recommended that the council should pay the contractor R282m by the end of December. This is according to engineering contract payment certificate 39 of the district council, seen by The Star.
Most of these payments to Izwelethu Cemforce were made from municipal infrastructure grant funds.
The appointment of Izwelethu Cemforce was mired in controversy in 2011. The district municipality, through its lawyers, Venter Booysen & Ferreira, has to seek legal opinion from advocate JHL Scheepers about their appointment to pro- vide pit latrines.
The legal advice was sought after those adjudicating the tender gave two other compa- nies, Boitshoko Road Surfacing & Civil Works and Marups Trading Enterprise JV, wrong tender documents, which led to their disqualification.
Despite the controversy, the municipality went ahead to appoint Izwelethu Cemforce.
According to sources in and outside the municipality, it was a common cause for historically white companies to assume indigenous names and gain access to municipal contracts – in some instances, without BEE partners.
In the case of Izwelethu Cemforce, the municipality, through Tshetlho, claimed it was 60 percent black owned, but the CIPC member details last published electronically on November 30, 2014 show Diedericks as the only active member.
However, Tshetlho insists there were black shareholders with a 60 percent stake when the contract was issued to Izwelethu Cemforce.
He listed the following names: Jan Louw, Sisanda Dyubeni, Thembekile DA Nabo and Rucracia Willis.
But, according to the CIPC, on January 25, 2015, a certain Jan Louw was listed as a 40 percent shareholder, but he resigned in 2010.
Even worse, the latest listing includes only Diedericks’s wife and the family trust. The others aren’t included on the list.
Despite the discrepancies, Tshetlho maintained that correct procedures were followed in the appointment of Izwelethu Cemforce.
“All payments made so far to Cemforce are for work done and all the evidence is available to show that they have performed in line with their appointment.
“I wish to reiterate that this municipality has always treated rural sanitation not as a project, but as a multi-year programme because of the huge sanitation backlog we have in the district,” he added.