Statement by Public Protector Adv. Busisiwe Mkhwebane and Adv. Kholeka Gcaleka during a media briefing held in Pretoria on Monday, December 21, 2020

Programme Director, Mr. Oupa Segalwe

Deputy Public Protector, Adv. Kholeka Gcaleka;

Acting Chief Executive Officer, Ms. Yalekile Lusibane;

Chief Operations Officer, Mr. Lucky Mohalaba;

Chief of Staff, Mr. Sibusiso Nyembe;

Executive Managers;

Chief Investigators;

Members of the media;

Ladies and gentlemen

 

Good morning.

 

Thank you for always responding positively each time we invite and ask you to help us report to the people of South Africa what we have done with the powers and the resources they have entrusted to us.

 

We appreciate your interest in the effort we make under very difficult conditions to live up to our vision of taking the services of this institution to the grassroots communities. We do not take it for granted at all.

 

This is the third time we meet for this purpose in the 2020/21 financial year and the fourth time in this calendar year. Adv. Gcaleka and I will take you through our findings on a number of matters that we have been seized with over the last couple years.

 

These include five matters that have been closed on account of unsubstantiated claims and nine, in which we have made adverse findings. 

 

Today’s session ends off what the COVID-19 pandemic made a rather difficult year for everyone. In this regard, as the Public Protector South Africa, we also had our work cut out.  

 

Among other things, we dealt with 1544 complaints regarding the R350 special social relief of distress grant. We have finalised 530 of these, meaning 530 complainants have been paid. The rest of the 1014 were rejected by the South African Social Security Agency (SASSA) and are therefore still under investigation. We have sent letters of feedback to the affected complainants and are awaiting their response.

 

We also had 38 matters pertaining to alleged undue delays to play Unemployment Insurance Fund benefits in relation to COVID-19. All 38 of them have been resolved.

 

On the 20 investigations relating to alleged irregularities in the procurement of goods and services in respect of COVID-19, we have made significant progress. In some of the cases, we are drafting Section 7(9) notices while in others we are preparing Discretionary Notices. The former comes when we intend making adverse findings, and the latter comes when the allegations appear to be unsubstantiated. 

 

In addition, we embarked on a blitz which saw us conducting inspections at various public health care facilities across the country.

 

I now hand over to Adv. Gcaleka to take you through our report on that project.

 

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Factual report on inspections at public hospitals

 

The Public Protector and I embarked on a nationwide tour of about five provinces to carry out inspections at various public hospitals where we assessed those facilities’ state of readiness to cope with the pressures brought about by the COVID-19 pandemic.

 

This was after President Cyril Ramaphosa, on 23 March 2020, announced a 21-day national lockdown as part of measures aimed at containing the rapid spread of COVID-19.  The lockdown continues to this day albeit with less restrictions that was the case in April 2020.

 

The provinces visited were Gauteng, Mpumalanga, Eastern Cape, KwaZulu-Natal and Limpopo.

 

As indicated on various occasions during the inspections, we have prepared a factual report on our observations. The purpose of the report is as follows:

 

1. To inform the Minister of Health, Dr Zweli Lawrence Mkhize (the Minister) about the challenges relating to healthcare facilities received during our inspections across the five provinces;

 

2. To identify common cause issues at the various hospital; and

 

3. To request implementation plans with clear and definite timelines from the affected authorities where concessions on inadequate service delivery have been made, and in cases where interventions are already underway.

 

The report covers accountability and undertakings for inadequate service delivery. We took this approach with a view of establishing factors behind a flood of complaints or potential flood of complaints received or to be received by the office.

 

The inspections focused on factors or gaps behind all the problems or complaints reported in some of the five provinces.

 

All in all, we visited about 17 public facilities across all the five provinces. The breakdown is as follows:

 

1. Gauteng

 

1. Jubilee Hospital

 

2. Dr George Mukhari Academic Hospital

 

3. Steve Biko Academic Hospital

 

4. Lillian Ngoyi Hospital

 

5. Chris Hani Baragwanath Academic Hospital

 

6. Charlotte Maxeke Johannesburg Academic Hospital

 

2. Mpumalanga

 

1. Temba Hospital

 

3. Eastern Cape

 

1. Sulenkama – Nessie Knights Hospital

 

2. Umtata Hospital

 

3. Living Stone Tertiary Hospital

 

4. Uitenhage Hospital

 

4. KwaZulu-Natal

 

1. Christ the King Hospital

 

2. Reitvlei Hospital

 

3. Mbongolwane Hospital

 

4. St Marys Kwa Magwaza Hospital

 

5. Limpopo

 

1. Limpopo Capricorn District Hospital

 

2. WF Knobel Hospital

 

In the interest of time, I will not go through our observations in respect of each and every one of the 17 hospitals. Instead I will focus on the common issues identified across all of the facilities.

 

In doing so, I will traverse the following thematic areas: Personal Protection Equipment (PPE), Capacity/Vacancies, unions, psychiatry wards, linen/laundry, Response times/Ambulances, State of Facilities/Building Space, Cleanliness of hospitals and Lack of Equipment.

 

1. Personal Protection Equipment:

 

1. There was insufficient procurement, distribution and provisioning of Personal Protection Equipment (PPEs) to ensure that the staff and the Covid-19 patients were adequately protected from the surge of the pandemic.

 

2. It was a cause for concern that the PPEs were collected at the warehouse and they are procured by the Department and not hospital.

 

3. There are no dedicated drivers appointed to collect PPEs at the warehouse and as such this contributes to the delay in receiving stock.

 

4. Hospitals did not have sufficient PPE.

 

5. Centralization of procurement was a challenge.

 

6. At some hospitals staff are required to use one PPE the entire day.

 

7. Some wards not provided with proper PPEs.

 

8. Only Doctors were provided with full PPEs and not all staff members.

 

1. PPEs (masks) are re-used.

 

10. Incorrect PPE masks procured i.e. the usage of M95 PPEs vis a vis KN95.

 

11. Incorrect sizes of PPE.

 

• Inadequate protection for Healthcare workers and other staff members due to a lack of PPE.

 

13. Nurses only allowed one body suit per day.

 

• Incorrect sizes (body suits) that tear immediately.

 

• Nurses are forced to wear body suits even if it is torn, thereby risking their health.

 

16. The procured PPEs not as per the specifications.

 

17. PPEs that are substandard.

 

18. PPE stock levels at the warehouse where PPEs are collected are very low.

 

19. Non-delivery of the procured PPE’S by the appointed service provider who was on the provincial database.

 

20. At some point there were substandard PPE’s that were delivered to the hospitals as the gowns were unsterile and they did not fit the staff compliment.

 

21. Availability of required sizes for some of the PPE i.e. boots/goggles.

 

5. Shortage of thermometers.

 

23. Shortage of disposable bins, decanters, oxygen points, PPE’s.

 

2. Capacity/Vacancies:

 

1. Lack of staff capacity affects the smooth running of the hospitals.

 

2. Posts are not being filled which has an adverse effect on service delivery.

 

3. Shortage of staff /insufficient capacity to deal with elective surgeries/ clinical, nursing and support services.

 

4. Delays in the filling of specialized positions (Clinical positions) in the hospital due to the centralization of recruitment at the provincial level.

 

5. Non clinical posts not being filled resulting in health professionals assisting with clerical and porting duties.

 

6. Chronic nursing staff shortage and lack of professional nurses to staff the areas optimally.

 

7. Workload for the doctors was too high. Doctors are often expected to work excessive hours as a result of clinical staff shortages.

 

3. Labour unions:

 

1. Lack of communication between management and staff.

 

2. High infection rate of employees.

 

3. Poor relationships between management and labour.

 

4. Lack of cooperation between staff and unions.

 

4. Psychiatry wards:

 

1. It was a serious concern that patients with mental health challenges shared wards with other patients.

 

5. Linen/Laundry:

 

1. There are delays regarding the turnaround time in the washing of the linen at hospitals.

 

2. Linen staff washing the laundry of Covid 19 patients with no gloves.

 

3. Poor maintenance of laundry machines leads to them breaking regularly.

 

4. Shortage of linen has serious impact on operations of hospitals.

 

5. Patients being treated on beds with no linen.

 

6. Non-functional laundry equipment (washing machine, dryer, iron).

 

7. Insufficient supply of clean linen, patients have to use their own bedding because of the shortage.

 

6. Response times/Ambulances:

 

1. Challenges regarding the response times of the ambulances.

 

2. Hospitals do not have sufficient ambulances.

 

3. Ambulances are not serviced, cleaned and sanitized.

 

 

7. State of Facilities/Building Space:

 

1. There was non-compliance with building safety standards for hospitals, safety doors and lighting detectors are not working.

 

2. Files and patients’ records are on the floor, there is an evident lack of filing rooms/space for storage of files.

 

3. Lack of a proper IT infrastructure.

 

4. Hospitals have infrastructure challenges in relation to space.

 

5. Infrastructure is old as some hospitals were built from 1930 with no proper upgrades. Old hospitals with aging infrastructure.

 

6. Infrastructure problems with buildings and fixtures (leaking roofs, broken toilets, toilets shared by males and females, unsecured cracking building walls, old paint).

 

7. Lack of network connections for virtual services.

 

8. Population has increased in certain areas with no proportional increase in hospital space. 

 

1. Shortage of Intensive Care Unit (ICU) beds.

 

10. Insufficient consultation rooms. 

 

11. Maintenance which is the responsibility of the Department Public Works is not up to standard as capacity and funding is a challenge.

 

8. Cleanliness of hospitals:

 

1. Medical waste lying on the corridors in hospitals.

 

2. Lack of proper process for securing medical waste boxes i.e. lack of linings and delays in the collection and disposal of medical waste.

 

9. Lack of Equipment:

 

1. Poor ventilation in hospitals.

 

2. Lack of equipment such as piped oxygen.

 

3. Old cylinder gas oxygen being used which has no spares.

 

4. Insufficient oxygen points.

 

5. General Blood Pressure and X-Ray machines are not enough, susceptible to regular breakdown due to lack of maintenance and being irreparable.

 

6. Laundry machines are old and irreparable.

 

7. Shortage of medical equipment (CPAP, ultrasound, baby warmers, BP machines, suction machines, mobile X-ray, dyna map and ECG machines)

 

8. Old and insufficient motor vehicles.

 

1. Delays in the maintenance at Provincial level of the MRI, Radiology, Oxygen machines due to lack of contracts with service providers.

 

10. Old and outdated X- ray machines.

 

11. Delays in procurement and servicing of geyser, heaters, telephones and printers.

 

• Delays by the Department of Infrastructure to service/repair taps and repair the laundry machines.

 

There is a host of interventions that we propose in respect of each of the facilities to deal with the various issues identified. They are for both the short and the medium terms. I will not go into the details of each, suffice to say they seek to remedy the challenges that we have picked up.

 

For instance, we propose that at Jubilee Hospital, the department must in the short term ensure that it capacitates the hospital with respect to conducting its own COVID-19 tests; the procurement of the COVID-19 machine /kit will assist in alleviating the turnaround time for the tests especially in light of a possible second wave of COVID-19; ensure that sufficient and adequate PPEs are received by hospitals upon collection from the depots; the PPEs must be in line with the requested specifications; and the Department must immediately train all staff in relation to the risk strategy and the work of the risk management committee.

 

In the medium term though, the Department must ensure that the hospital has a Business Continuity Management plan regarding the manner in which elective surgery is phased in post COVID-19; and ensure that there is sufficient ambulances to cater for the needs of the masses who must access health care.

 

In the case of Dr George Mukhari Academic Hospital, we propose interventions that have to do with Risk Management and Business Continuity.

 

The full details of the interventions per facility can be found in the report, which will be accessible on our website by this afternoon.

 

As a way forward, the oversight role of the Minister and MEC’s will be important in steering the process of assessment of the effectiveness of hospitals to achieve good governance. The office of the Minister should submit an action plan on how the affected hospitals will address the issues that were raised during the inspections.

 

I now hand back to Adv. Mkhwebane to take you through her findings on a number of investigations.

 

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Before I take you through my findings in the various matters, let me indicate that the following five (5) matters have been closed on the basis that the allegations that gave rise to the investigations concerned were not borne out by the facts and therefore unsubstantiated. I will merely list their long titles. The full reports will be available on our website later today. They are as follows:

 

1. Maladministration, irregular recruitment and procurement as well as irregular increase of salaries by the South African Maritime Safety Authority as alleged by Mr. Themba Douglas Ntshangase in a complaint lodged on 05 September 2017;

 

2. Undue delay by Armaments Corporation of South Africa SOC Ltd (AMSCOR) in the issuing of an outcome of an investigation conducted by Fairbridges Wertheim Becker Attorneys into alleged tender irregularities and failure by ARMSCOR to award a project package tender as alleged on 30 August 2019 by Ms. Zodwa Dlamini who is the Managing Director of Steradian;

 

3. Maladministration by government officials who benefitted from government funding by leasing state owned farms and used their relatives for fronting and as beneficiaries of these farms as alleged by Mr. Sipho Levey Maseko; and

 

4. Allegations of a violation of the Executive Ethics Code by the KwaZulu-Natal MEC for Health, Ms. N. Simelane-Zulu.

 

5. Allegations of maladministration and improper conduct by the Culture, Arts, Tourism, Hospitality and Sports Sector Education and Training Authority (CATHSETA) and the department of higher education and training (DHET) in the matter of the South African Roadies Association

 

Allegations concerning the following nine (9) matters have been substantiated and appropriate remedial action has been taken in respect of each. These matters cover themes such as pensions of government employees, housing, irregular appointments of staff and procurement. I list below the long titles of the first six (6) and deal in detail with the last three (3). (Copies of the full reports will be accessible from our website later in the day):

 

1. Report No. 08 of 2020/21 on an investigation into allegations of improper conduct and maladministration relating to the appointment of the Acting Municipal Manager by the Kai! Garib Local Municipality in the Northern Cape Province in 2018.

 

2. Report No. 10 of 2020/21 on an investigation into allegations of maladministration, nepotism, irregular expenditure and the irregular appointment of Ms Lally Chauke to the position of Human Resources Officer by the South African Council of Educators (SACE).

 

3. Report No. 12 of 2020/21 on an investigation into allegations of improper conduct and maladministration by the Walter Sisulu Local Municipality in the Eastern Cape relating to the failure to transmit pension fund contributions deducted from employees’ salaries to the South African Local Authorities (SALA) Pension Fund.

 

4. Report No. 13 of 2020/21 on an investigation into allegations of maladministration, improper or suspected improper conduct in the appointment of Mr. Previn Devalingam Govender to the position of Chief of Emergency by the Tshwane Metropolitan Municipality.
5. Report No. 94 of 2019/20 on an investigation into allegations of improper conduct and maladministration relating to the appointment of a certain Mr. Qongo as Driver/Messenger by the John Taolo Gaetsewe District Municipality in the Northern Cape in 2017.

 

6. Report No. 117 of 2020/21 on an investigation into allegations of improper conduct and maladministration by the Buffalo City Metropolitan Municipality relating to the provision of title deed documents to beneficiaries of Reconstruction and Development Programme (RDP) houses in King Williams Town.

 

Basson v the Department of Human Settlements, Water and Sanitation (Report No. 14 of 2020/21)

 

I investigated allegations of maladministration by the Department of Human Settlements, Water and Sanitation (formerly known as the Department of Water and Sanitation, and referred herein as the DWS) in the awarding of various tenders.

 

The complaint was lodged by Mr. Leon Basson, the Democratic Alliance Deputy Shadow Minister of Water and Sanitation on 18 August 2016. He alleged that the previous Minister of Water and Sanitation, Ms Nomvula Mokonyane was involved in irregularities in the awarding of the following tenders at the DWS:

 

1. Repairing water infrastructure in the Mopani District Municipality, a project for which the budget escalated from R96.4 million to R502.6 million in three (3) months;

 

2. The raising of the Hazelmere Dam wall, a project which was approved in 2011 with a budget of R 91 million and projected to cost R359 million at the date of this report, with no end date;

 

3. The building of the Clanwilliam Dam wall; and

 

4. The 36 kilometre pipeline between Craigieburn and Greytown.

 

In essence, the complaint was that these projects had fallen victim to tender manipulation and political interference. After a thorough analysis of the complaint, I decided to investigate the following five issues:

 

1. Whether the Lepelle Northern Water Board (LNW) irregularly awarded the contract for provision of water and sanitation services in the Mopani, Giyani project to LTE Consulting (Pty) Ltd (LTE) without following procurement legal prescripts;

 

2. Whether there was maladministration in the DWS Nandoni-Nsami (Giyani) bulk pipeline project;

 

3. Whether former Minister Nomvula Mokonyane was involved in irregularities in the raising of the Hazelmere Dam wall, and if so, whether such involvement constitutes improper conduct as envisaged in section 182(1) of the Constitution and maladministration as envisaged in section 6(4)(a)(i) of the Public Protector Act;

 

4. Whether former Minister Nomvula Mokonyane was involved in irregularities in the raising of the Clanwilliam Dam, and if so, whether such involvement constitutes improper conduct as envisaged in section 182(1) of the Constitution and maladministration as envisaged in section 6(4)(a)(i) of the Public Protector Act; and

 

5. Whether former Minister Nomvula Mokonyane was involved in irregularities in the building of the 36 kilometre pipeline between Craigieburn and Greytown, and if so, whether such involvement constitutes improper conduct as envisaged in section 182(1) of the Constitution and maladministration as envisaged in section 6(4)(a)(i) of the Public Protector Act.

 

Before dealing with the findings, let me provide a bit of context to help the public understand how I arrived at the conclusions contained in the report.

 

A copy of the appointment letter dated 20 August 2014 from LNW to LTE was perused. The estimated period for the work to be completed was four (4) years thirteen (13) months and (2) weeks. The estimated amounts were: Giyani Water Works: R52 150 000.00 and Giyani Wastewater Works R38 800 000.00.

                                                                                                 

On 25 August 2014, Ms Mokonyane forwarded a letter to LNW which, inter alia, issued a directive to LNW in terms of section 41(1) (ii) of the Water Services Act 108 of 1997, to intervene, with effect from 18 August 2014, on the Giyani Water and Waste Water treatment in order to restore water supply to the residents.

 

On 27 August 2014, LNW wrote to National Treasury and informed them that LNW was appointed as an Implementing Agent (IA) by the DWS. As such LNW had appointed LTE on deviation due to the emergency nature of the project.

 

On 28 August 2014, LTE issued South Zambezi (Pty) LTD with an appointment letter for engineering and project management services for the following amounts:

 

“… Giyani Water Works:

 

Estimated Project Management Services fee: R 1, 100, 000.00 Estimated Engineering Services Fee: R 2, 475, 000-00

 

Giyani Wastewater Works:

 

Estimated Project Management Services Fee: R 807, 500-00 Estimated Engineering Services Fee: R 1, 842, 500-00…”

 

On 28 August 2014, LTE issued Khato Civils (Pty) LTD with an appointment letter for construction service for the following amounts:

 

“… Giyani Water Works: R 45,000,000 (excluding VAT)

    

Giyani Wastewater Works: R 33,500,000 (excluding VAT)…”

 

On 28 August 2014, LTE issued LTE Civil & Structural (Pty) LTD with an appointment letter for engineering and project management services for the following amounts:

 

“… Giyani Water Works:

Estimated Project Management Services fee: R 1, 100, 000.00 Estimated Engineering Services Fee: R 2, 475, 000-00

 

Giyani Wastewater Works:

Estimated Project Management Services Fee: R 807, 500-00 Estimated Engineering Services Fee: R 1, 842, 500-00…”

 

A copy of the appointment letter dated 25 September 2014 from LNW to LTE was perused. The appointment was for an estimated cost of R2 211 425 000.00 for a period of five (5) years.

 

A contract for “Emergency Water and Waste Water Intervention in Mopani District Municipality on a Turnkey Basis” was signed between LNW and LTE on 1 October 2014 (Mr Legodi) and on 7 October 2014 (Mr Majola). The contract price was R2 211 425 000.00 (two billion two hundred and eleven million four hundred and twenty five thousand rand).

 

A copy of invoice dated 13 October 2014 from Khato Civils to LNW was perused. The invoice number was LEPNW001 and the amount claimed was R170 106 506.25. This invoice was signed by Mr Legodi on 14 October 2014. It was noted that this amount was paid one month after the contract was awarded.

 

A copy of the “Programme implementation plan” (sic) for the “Mopani District Municipality water and sanitation revitalization programe” dated September 2014 was perused. This was compiled for LNW by LTE. It was noted that LTE was appointed by LNW on an engineering, procurement and construction (EPC) basis for the project. (Own emphasis added)

 

On 17 March 2015, LTE and LNW signed an addendum to the service level agreement which increased the contract value to R2 808 318 698.18.

 

On 15 December 2015, Mr Legodi wrote to NT and informed them that LNW was appointed as the IA for water and sanitation delivery on an emergency basis. As such LNW appointed LTE. The appointment of LTE was at an amount of R2 billion excluding value added tax which was in line with the approved Business Plan.

 

On 7 March 2015, Mr Legodi wrote to LTE and stated inter alia, that the total approved budget for the Giyani Intervention Project including the approved variation was therefore R 2 936 664 854 (Incl. Vat). LNW records show that the total amount paid to LTE to date amounted to R 2 522 343 696.03 (Incl. Vat).

 

On 18 July 2018, Mr Tshivhase, the Chairperson of the Board at LNW, in response to my enquiry letter dated 9 July 2018, stated, inter alia, that in 2009, a drought caused the water levels in the Nsami Dam to drop to the extent that there was insufficient water to ensure a supply of water to the population of Giyani. A local state of disaster was declared in terms of the provisions of the Disaster Management Act of 2002 and the emergency measures had to be implemented to restore water services. The DWS then appointed the MDM as the Implementing Agent (IA) to implement and manage the project. The MDM appointed certain contractors to implement the project, however, these contractors were challenged by unsuccessful bidders at the High Court alleging that the MDM appointed those companies irregularly.

 

The Supreme Court of Appeal declared the contracts void ab initio and set them aside. On 12 August 2014, Ms Mokonyane held a government imbizo with the community of Mopani in the Giyani area. The primary aim of the aforesaid imbizo was to assess the scale and enormity of the crisis and progress in relation to measures that had been taken by government to address the water problem in the district of Mopani. The community indicated that there had been no positive change in terms of water service in the area notwithstanding the fact that the Giyani area was declared a disaster area way back in 2009.

 

Ms Mokonyane directed during the imbizo that LNW be appointed as the IA of the DWS. The directive in this regard was issued in terms of section 41 of the Water Services Act. Pursuant to the appointment of LNW as an IA, on 15 August 2014, an urgent steering committee meeting was convened with various stakeholders.

 

The appointment of LTE was on a turnkey basis. A turnkey solution or project means a type of a project that is constructed so that it can be sold or handed over to the owner as a complete product. LTE then undertook the entire responsibility from designs throughout completion of the project.

 

Mr Tshivhase further stated that at the time of the project, LNW did not have a panel of service providers when it was appointed by the DWS as an IA in respect of the project. LNW used the DWS panel of service providers in which LTE Consulting was confirmed to be on category 6 of the panel of Professional Service Providers (PSP).

 

A copy of the Auditor-General South Africa (AGSA) engineer’s report dated 29 July 2017 was perused. According to the report, LTE was charging rates that were above the Department of Public Service and Administration (the DPSA) and Department of Public Works (DPW). For example, the AGSA report stated that the top rate for a consultant working at the level of a Director was R1 383/hour according to the DPSA scales and the top rate for a registered professional principal was R1 448 according to the DPW scales. LTE was claiming up to R3 500/hour. Due to the fact that this project was never placed on tender, LTE was allowed to charge any rate that they desired. This was not value for money, fair, equitable, competitive or cost-effective.

 

According to the AGSA report, it was noted that Khato Civils was charging higher rates compared to other companies doing similar work. Once again, this was allowed to occur because LTE got the project without following a proper procurement process. This, in essence, allowed all the sub-contractors to charge higher rates. This was not value for money, fair, equitable, competitive or cost-effective.

 

On 4 October 2018, through a letter, Mr Godfrey Madubanya: Legal and Compliance Office of the Construction Industry Development Board (CIDB) (Mr Madubanya) advised my office that during August 2014, LTE was not registered with the CIBD. Furthermore, he stated, inter alia, that in terms of section 18 of the CIDB Act, 38 of 2000 (the CIDB Act) all contractors have to be registered with the CIDB prior to rendering construction services to State/Public entities. As such, any appointment of a contractor in the absence of being so registered is an offence. He confirmed that the matter was being investigated by the CIDB’s investigators, with effect from February 2018. (Own emphasis added)

 

In response to a section 7(9) notice DG, Mr. Trevor Blazer stated the following:

 

“Furthermore, the Public Protector made findings under paragraph 9.1.13 to the effect that LTE at the time (2014) was not registered with the Construction Industry Development Board (‘CIDB”) and as such, was not allowed to undertake, carry out or complete any construction works or portion thereof for public contract. Therefore, LTE was guilty of an offence and should not have been awarded the project in terms of section 18 of the CIDB Act No 30 of 2000 is explicit from this finding that the Public Protector has missed the point and misconstrued the provisions of the CIDB Act.

 

At the outset, I wish to emphasise that LTE was a consultant company appointed on turnkey basis and was not a construction company. LTE was not appointed as a construction company and to this end, it was not required to comply with the CIDB grading. The said company was therefore required to ensure that it appoints contractors who meet the CIDB requirements. LNW did not have a direct relationship with Khato Civils the construction company appointed by LTE. LNW was entitled to hold LTE liable for any shoddy work that was done by the construction company it appointed. However, in the matter at hand, there is no shoddy work which was found to have been done by Khato Civils.

 

Accordingly, it is submitted that the conclusions made by the PP in her report to the effect that the appointment of LTE was irregular are irrational and not substantiated by evidence. I noted that the PP in arriving at such irrational conclusions, disregarded the documentary evidence followed by viva voce evidence submitted by me and other officials of LNW.I therefore in the light of the evidence submitted urge the PP to reconsider the adverse conclusions outlined in the preliminary report since there is no justification at all for making same.

 

The conclusion to the effect that the appointment of LTE was improper and constituted maladministration, irregular, fruitless and wasteful expenditure with respect is not corroborated by any evidence and submit that such unwarranted conclusion should not find its way in the final investigation report. To persist with such unsubstantiated findings will undoubtedly render such findings irrational. The PP is also urged to take cognisance of the fact that the SIU has instituted legal proceedings as indicated above challenging the appointment of LTE.I therefore propose in the circumstances that the PP should keep this investigation in abeyance pending the final determination of the issues by the court.

 

In all of the above, it is respectfully submitted that a proper response to the PP’s findings have been made and therefore urge the PP to amend its findings accordingly…”

 

On 22 June 2020, Mr Legodi (LNW) submitted his response and stated inter alia, that the Minister on 25 August 2014 signed the directive approving the recommendations outlined in a submission by the Acting Director General expressly stipulating that additional costs be submitted on completion of the business plan. According to Mr. Legodi, the directive expressly provides as follows:

 

“I therefore direct you to proceed with the implementation of the directive with immediate effect whilst the internal administrative procedures are being fast tracked. You are also directed to establish a multi stakeholder implementation steering committee to oversee the technical progress of the project and to submit to the acting DG, Mr Trevor Balzer a comprehensive business plan including the budget and technical assessment for the entire area by no later than 15 September 2014. I shall be establishing a political steering committee consisting of political representatives of three spheres of government to oversee the progress of this critical project.”

 

There is no doubt at all from the reading of the directive that the emergency implementation program of the project was designed by the Minister as an emergency intervention and to be implemented as a multi-disciplinary project. Similar directives were addressed by the Minister to the Premier of Limpopo, the Executive Mayor of Mopani District Municipality as well as to the Minister of Co-Operative Governance and Traditional Affairs.

 

Conclusion

 

It is the version of LNW that where a deviation process was applied, section 217 of the Constitution was not applicable. This version is improbable due to the amount of the project and the fact that the new project was for a period of five (5) years. The project should have followed an open competitive bidding process and proper procurement process. The conduct of LNW has deprived the state to obtain or approve a project that has value for money. The use of the emergency narrative should not have been a reason for LNW to evade the procurement procedures, in fact for this high value budget a formal procurement process should have been followed i.e. tender process that should be fair, equitable, transparent, competitive and cost effective. LNW cannot create an emergency narrative that leads to nearly R 3, 8 billion being spent without the project being completed in the end. This was not justified.

 

The drought in the area occurred from 2009, and the area was declared a “local state of disaster” from then. Furthermore, the MDM in 2009 was appointed by the DWS as the implementing agent to manage the project. When the MDM appointed contractors to implement the project this was challenged and the courts ruled that the appointments were irregular. LNW should have taken a lesson from this with regard to irregular processes, but they cited an emergency and used this to circumvent the procurement process.

 

Based on the evidence gathered, it can be concluded that LNW did not comply with the relevant applicable legal prescripts when it awarded the contract for provision of water and sanitation services in the Mopani, Giyani to LTE.

 

Furthermore the versions provided by the LNW implicated officials is not persuasive to change its findings or conclusion drawn.

 

It is the version of the DWS that they complied with the relevant prescripts by availing service providers from the DWS panel for LNW to use. It was concerning to note that this project ended up costing approximately R3,8 billion, went beyond the due date of project completion and towards the end, after approximately R3 billion paid the project was still not completed and the contract with LTE terminated. By not putting the project, which was above R500 000.00, out on tender, they allowed the maladministration to occur, in regard to the inflated costs and the scope and costs increasing as the project went along. If constitutional principals were followed from the outset, this maladministration could have all been avoided. Furthermore the version provided by the DWS does not convince this office to change its findings or conclusion drawn.

 

It was concerning that Khato Civils had claimed payments from LNW of approximately R170 million during the period 25 September 2014 to 26 October 2014 in just one month. This was after Khato Civils were just appointed during August 2014. Khato Civils claimed this amount as advances and for measured work. This amount was exorbitant and LNW should not have allowed this to occur. Furthermore what is concerning was that this amount paid to Khato Civils in that first month was more than the budget for the first approved budget for the project. By this project not going out on tender, there was clear lack of value for money as LTE/Khato was allowed to charge any rates that they wanted.

 

When Mr Schmahl compiled the memorandum dated 19 August 2014, he quoted the LNW SCM policy regarding the deviation on the basis of an emergency and stated “in terms of SCM policy the Chief Executive can approve a deviation from normal procurement procedures due to emergency cases when life and limb are at stake” This was factually incorrect as the approved (2012) SCM policy did not have any section relating to such, this 2012 policy states that an exception for competitive bidding will only be considered in the case of an emergency. The part regarding deviations/life and limb was only added to the SCM policy in August 2015. Mr Schmahl misrepresented the facts to push this project for the benefit of LTE.  Furthermore, Mr Schmahl prepared the deviation memorandum and it was signed on 19 August 2014 whereas LNW was already engaging with LTE from 15 August 2014 in regard to the project.

 

It should be noted that this project was approved five (5) years after the drought. The emergency in essence had occurred from 2009, when the area of the Municipality was declared a disaster in terms of the provisions of the Disaster Management Act 2002, due to the shortage of water and sanitation services in the area. It is therefore only reasonable that such a huge project could have been delayed by three months to allow LNW to follow a proper procurement process. Deviations may be allowed under strict conditions which may include urgency, but in this case proper procurement processes were not followed. The emergency narrative should not have been a justification for LNW to evade the procurement procedures, in fact for this high value budget a formal procurement process should have been followed i.e. tender process that should be fair, equitable, transparent, competitive and cost effective. The emergency narrative was not justifiable or rational in terms of the amount spent i.e. nearly R3,8 billion, more especially in that the project was not completed.

 

The deviation motivation did not have sufficient reasons for not following the competitive bidding process, furthermore LNW did not establish if there was adequate finance for the entire project. LNW should have gone out on tender to obtain the most competitive bids.

 

LNW stated in their response that the DWS had recommended that LNW appoint one of their service providers namely LTE from the DWS panel. This could not be verified with any documented evidence or proof.

wardswards

LTE was appointed on 20 August 2014 and the estimated value of the work at that time was approximately R90 million. Thereafter, a month later LNW issued two more appointment letters to LTE dated 25 September 2014 and 13 October 2014 respectively, which now increased the value of the work from R90 million to approximately R3.8 billion. Throughout this entire process, no proper SCM processes were followed with regard to the public procurement process. 

 

It was noted that Ms Mokonyane’s directive was issued with effect from 18 August 2014. LTE was already attending meetings with regard to this project from 14 August 2014, this was not a fair process and this billion rand project should have gone out on tender. LNW took away the right to a fair and competitive tender process by engaging in this incorrect process.

 

On 14 August 2014, Ms Mokonyane visited the MDM, and on 18 August 2014, the government imbizo was held. On 21 August 2014, Mr Balzer requested her to issue a directive to LNW. She issued it on 25 August 2014 with effect from 18 August 2014. LNW was appointed as the IA from 18 August 2014. LTE did an assessment for the project dated 18 August 2014. The internal document at LNW to appoint LTE through deviation was dated 19 August 2014. On 23 September 2014, LNW and LTE signed the Service Level Agreement. LTE was appointed on 25 September 2014 by LNW. On 7 October 2014, LTE and LNW signed a contract in regard to the project. 

 

With regard to Nkhensani Hospital, the water plant installed by LTE/Khato was never properly utilized by the Hospital. It was an expensive system that the Hospital could not maintain. A feasibility study would have ensured that the Hospital received a water plant that was manageable as the later one that was put in place by the Department of Health.  If a proper feasibility study had been compiled with specifications as per the proper procurement processes, none of this wasteful expenditure would have occurred. This first process that was followed was not of any value to the Hospital, compared to the amount of money spent.

 

It was noted that the DWS did not ensure that there was compliance in this project regarding LNW’s procurement of service providers. The DWS should have played an oversight role as the project sponsor.

 

LNW appointed LTE on a turnkey basis, thereafter LTE appointed Khato Civils as the contractor and South Zambezi as a sub-consultant.  The project was cited as an emergency and yet five (5) years later and over R 3, 8 billion spent on the project, it was not completed.

 

I could not establish from the evidence obtained that Ms Mokonyane had given a direct instruction for LNW to award the project to LTE. It was the LNW officials who followed the procurement process to appoint LTE.

 

With regard to Issue 2, it can be concluded that the Municipal Manager failed to follow proper procedures when they appointed the Contractor Tlo Re Yeng and Base Joint Venture, which was thereafter confirmed by the SCA.

 

The MDM failed to ensure that there was proper contract management in the first project as per the MFMA.

 

As per the Esorfranki pipeline judgement the MDM was ordered to within 7 days of the order being granted, inter alia, request that the DWS determine the extent of the works necessary to perform remedial work and to complete the construction of the pipeline and the other works as contemplated in the aforesaid tender, for purposes of publishing a tender for the remedial work and the completion of the works. The MDM failed to carry out this order and the DWS failed to ensure that this entire process went out on tender.

 

A procurement process was not followed in the appointment of LTE as the design service provider in regard to the second (NEW) project. Designs were initially done by the first design service provider during 2009, therefore it does not make sense as to why LTE would redo the designs, surveys and geotechnical surveys. LTE was awarded the project management aspect with no tender being issued.

 

Mr Balzer in his response and version stated inter alia, that the MDM were therefore responsible for the procurement and the oversight of the implementation of the project. The DWS could not be expected to be a “nanny” department for an IA which has a fully-fledged Council, Executive Mayor and Municipal Manager who are mandated to perform functions in terms of the Constitution and the Municipal Finance Management Act, including ensuring that contracts meet the muster of Section 217 of the Constitution.

 

Furthermore he advised that in regard to Governance arrangements within the DWS, once the budget has been approved/appropriated, Programme Managers (Deputy Directors General) are delegated with the responsibility to implement and/or provide the necessary oversight of projects. In the case of the Giyani Bulk Water Supply Project: LPR018, this would have been the Deputy Director General: Regions together with the Provincial Chief Director for Limpopo. Furthermore, The Chief Director: Regional Bulk Infrastructure would also have compiled quarterly reports which would have been submitted to National Treasury as per the requirements of the Division of Revenue Act.

 

Mr Balzer stated further that despite numerous attempts by the Department’s Regional Office to engage with the Mopani Municipality to implement the Supreme Court judgement, the municipality eventually on or about 15 May 2014 indicated to the Department that they had lodged an appeal with the Constitutional Court, but in the meantime were accelerating the completion of the project. Later during the same month of May, the Municipality advised the Department that they would no longer follow through on the appeal to the Constitutional Court and would be implementing the Judgement of the Supreme Court. At this stage the project was assessed to be about 62% complete.

 

It was noted by my office that both the MDM and the DWS failed to recover costs for the irregular and wasteful expenditure. From the first irregular contract that was awarded to Tlong Re Ye /Base JV and later set aside by the court there was no value for money. The pipes were exposed and damaged. When the new contractor took over the project was started afresh. It appears that approximately R248 million was spend on the first project with no value to show. The project had to be started from the beginning, therefore this was fruitless and wasteful expenditure.

 

Following a rigorous investigation, which included scrutinizing the bank accounts belonging to some of those alleged to have engaged in wrongdoing, I make the following findings:

 

1. The allegation that LNW improperly awarded the Mopani: Giyani project to LTE Consulting (Pty) Ltd (LTE) without following proper procurement process is substantiated. LNW deviated from competitive bidding in the appointment of LTE for the provision of water and sanitation services in the Mopani: Giyani Project in August 2014. The reasons provided by the LNW that there was an emergency to justify the deviation is not accepted. The local state of disaster in terms of the provisions of the Disaster Management Act, 2002 due to acute water shortages and dysfunctional sanitation services in the Mopani: Giyani area was declared back in 2009. By 2014, a period of five years had already elapsed and no evidence was provided by LNW to indicate that there was an imminent change in circumstances that would have justified an emergency.

 

2. The allegation that the MDM had committed maladministration in regard to the Nandoni-Nsami pipeline project is substantiated. The Mopani District Municipality (MDM), through the Municipal Manager, Mr Masiye Elias Mankabidi, failed to ensure that the contract was properly managed. The Nandoni-Nsami bulk pipeline project in Giyani was not completed but approximately R248 million was utilized.

 

3. The allegation that Ms Mokonyane was involved in tender irregularities in the Hazelmere Dam project is not substantiated.  No evidence could be found that Ms Mokonyane was involved in the tender relating to the raising of the Hazelmere Dam wall.

 

4. The allegation that Ms Mokonyane was involved in tender irregularities in the Clanwilliam Dam project is not substantiated. No evidence could be found that Ms Mokonyane was involved in the tender relating to the raising of the Clanwilliam Dam.

 

5. The allegation that former Minister Ms Mokonyana was involved in irregularities in the Greytown project is not substantiated. No evidence was provided indicating that Ms Mokonyane was involved in irregularities in the building of the 36 kilometre pipeline between Craigieburn and Greytown.

 

In the light of the findings, I take the following remedial action:

 

In regard to the Nandoni-Nsami pipeline project and the Mopani District Municipality, the Minister of Human Settlements, Water and Sanitation must within ninety days from the date of this report appoint engineers who can advise on actual work done by the previous service providers versus payments made in terms of value for money for the project.

 

The Board of Lepelle Northern Water must:

 

1. Within sixty (60) working days from the date of this report, take appropriate disciplinary action against the implicated officials at LNW;

 

2. Report to the National Treasury and the Auditor General, particulars of the identified financial misconduct and the steps taken in connection with such financial misconduct, as contemplated in section 85 of the PFMA;

 

3. Ensures LNW collaborates with the National Treasury in conducting a forensic investigation into this contract since 2014 and takes measures to address any findings regarding systemic administrative deficiencies allowing ongoing maladministration and related improprieties in its procurement system; and

 

4. Within ninety (90) days from the date of this report, institute civil proceedings against the implicated LNW officials for the recovery of such appropriate and reasonable amounts lost in connection with the irregular awarding of the Mopani-Giyani project. i.e. the inflated costs and rates in regard to the project.

 

The Director-General of the Department of Human Settlements, Water and Sanitation must Within sixty days from the date of this report, review the DWS policies in respect of Implementing Agents, further checks and balances need to be incorporated, and greater control must be exercised over IA’s to avoid them exceeding contract values agreed by the DWS.

 

In addition, the Head of the Directorate of Priority Crimes Investigations (DPCI/Hawks): considers registering an enquiry to investigate acts of possible corrupt activities in connection with the awarding of the project by LNW to LTE.

 

Anonymous v City of Johannesburg (Report No. 21 of 2020/21)

 

I investigated allegations of maladministration relating to irregular appointments, irregular salary increases, financial mismanagement, procurement irregularities and conflict of interests in the City of Johannesburg. The investigation stemmed from an anonymous complaint lodged with my office on 08 March 2018.

 

The complaint covers four distinct themes namely irregular staff appointments, irregular salary increases, financial mismanagement and conflict of interest.

 

Allegations of irregular staff appointments involved the appointments of the Executive Director of Housing, Group Head of Legal, Group Forensic Investigation Services Executive Head, Chief of Johannesburg Metro Police and the current City Manager.

 

Regarding alleged irregular salary increases, former Chief of Staff Mr Michael Beaumont’s salary was irregularly increased allegedly with the full knowledge and consent of the former Executive Mayor.

 

On financial mismanagement, the complainant alleged that the City returned nearly R736 million to National Treasury in funds that were allocated as conditional grants for the year ended in 30 June 2017. National Treasury allegedly served the City with a letter of demand in October 2017 to recover this money which was not spent by the City.

 

It was alleged that the City, due to poor performance failed to spend the conditional grants in 2016/17. The money was allegedly meant for provision of basic services to the residents including water and sanitation, roads, housing, electricity and waste amongst others. This was, to the complainant, an indication of non-compliance, mismanagement and poor oversight by the Democratic Alliance-led administration.

 

In addition, the City allegedly appointed KPMG to conduct investigations in various departments including the Revenue Unit in 2016. In 2017 the services of KPMG were allegedly retained to perform analysis of the customer accounts in the City’s database and develop strategies to improve the City’s revenue collection.

 

These were allegedly different assignments which would require different expertise. Whilst the first appointment was made via a panel of forensic service providers, which KPMG belong to, the second allegedly did not fall under the expertise for which the panel was appointed.

 

KPMG was allegedly appointed without advertising the tender as required by the Municipal Finance Management Act (MFMA) and Supply Chain Management regulations. The basis of this appointment was allegedly through unsolicited bid procedures.

 

The complainant believed this to be an irregular appointment which denied other service providers an equal opportunity to offer same services on similar terms.

 

In terms of conflict of interest, the City allegedly awarded a multimillion tender for forensic investigations to Grant Thornton Capital. A company called Lephatsi Financial Services, which is allegedly owned by the former Executive Mayor’s wife, allegedly owns a 35% stake of Grant Thornton Capital. The former Executive Mayor is alleged to have unlawfully and irregularly solicited free services from Lephatsi Financial Services.

 

The former Executive Mayor is also alleged to have had a breakdown with Setheo Engineering Company (Setheo) appointed by the City due to personal vendetta against them since Setheo is in the same business as CONCO which is a company allegedly associated with the Mayor.

 

On 23 November 2018, my office further received another complaint straight from the directors of Setheo alleging administrative irregularities in the termination of the NEC 3 contract, failure to respond to communication, bad publicity, abuse of power by the former Executive Mayor and maladministration around sub-contractors by City Power and/or the City.

 

Following the lodging of a separate complaint by directors of Setheo, this issue was then separated from this investigation and it is being investigated by my office on its own as a stand-alone matter.

 

It was further alleged that the former Executive Mayor interfered in the funding allocation by the City of a youth drug rehabilitation and support programme to fund a Non-Governmental Organisation known as Field Band Foundation (FBF) which he claims as a personal project.

 

After analysing the complaint, the following 11 issues were identified for investigation:

 

1. Whether the City improperly or irregularly appointed Mr Moses Metileni to the position of Executive Director: Housing, without following due processes.

 

2. Whether the City improperly or irregularly appointed Mr Mafoane Mogashoa to the position of Group Head: Legal and Contracts without following due processes.

 

3. Whether the City improperly or irregularly appointed Dr Ndivhoniswani Lukhwareni to the position of City Manager without following due processes.

 

4. Whether the establishment of Group Forensic Investigation Services (GFIS) and the subsequent appointment of General Shadrack Sibiya as its Executive Head by the City were improper and irregular.

 

5. Whether the City improperly or irregularly appointed Mr David Tembe to the position of Chief of Johannesburg Metro Police (JMPD) without following due processes.

 

6. Whether the City irregularly increased the Chief of Staff: Mr Michael Beaumont’s salary and further allocated him the vehicle and Very Important Person (VIP) protection services without conducting security risk assessment.

 

7. Whether the City returned nearly R736 million to National Treasury that was allocated as conditional grants for the year ended in June 2017, which money was meant for the provision of basic services to the residents of the City including water and sanitation, roads, housing, electricity and waste amongst others and if so, whether this was an indication of non-compliance, mismanagement and poor oversight by the City.

 

8. Whether the City improperly or irregularly appointed KPMG to conduct investigations in various departments within the City for clearly different assignments which would require different expertise, without advertising the tender as required by the Municipal Finance Management Act (MFMA) and Supply Chain Management (SCM) regulations.

 

1. Whether the former Executive Mayor of the City: Mr Herman Mashaba unlawfully and irregularly entered the procurement space and solicited free services from Lephatsi Financial Services and whether such amounted to a conflict of interests.

 

10. Whether the former  Executive Mayor of the City: Mr Herman Mashaba allegedly interfered or influenced the City to use funding allocation of youth drug rehabilitation and support programme to fund Field Band Foundation (FBF) which is a Non-Governmental Organisation (NGO).

 

11. Whether the Complainant, the City or any other party suffered improper prejudice in the circumstances.

 

Following a rigorous investigation, I have make the following findings:

 

1. The City improperly or irregularly appointed Mr Moses Metileni to the position of Executive Director: Housing, without following due processes.

 

2. The City improperly or irregularly appointed Mr David Tembe to the position of Chief of Johannesburg Metro Police (JMPD) without following due processes.

 

3. The City improperly or irregularly appointed KPMG to conduct investigations in various departments within the City for clearly different assignments which would require different expertise, without advertising the tender as required by the Municipal Finance Management Act (MFMA) and Supply Chain Management (SCM) regulations.

 

4. The former Executive Mayor of the City: Mr Herman Mashaba unlawfully and irregularly entered the procurement space and solicited free services from Lephatsi Financial Services and whether such amounted to a conflict of interests.

 

5. The former Executive Mayor of the City: Mr Herman Mashaba allegedly interfered or influenced the City to use funding allocation of youth drug rehabilitation and support programme to fund Field Band Foundation (FBF) which is a Non-Governmental Organisation (NGO).

 

6. The rest of the allegations are not substantiated.

 

7. In the light of the allegation that are substantiated, the Complainant, the City or any other party suffered improper prejudice in the circumstances.

 

The appropriate remedial action that I am taking in pursuit of section 182(1)(c) of the Constitution is the following:

 

The City Manager must take appropriate steps to ensure that:

 

1. Within sixty working days from the date of this report, disclose all irregular expenditure incurred in connection with irregular appointments of Mr Metileni, Mr Tembe and irregular extension of a contract of KPMG to the Council and Treasury.

 

2. Directs the Chief Financial Officer (CFO) of CoJ to amend the closing balance of the current financial statements to accordingly include the irregular expenditure in the previous financial statements.

 

3. Within sixty working days of the issue of this report; all CoJ’s officials who are involved in the SCM and Recruitment processes, including all the senior management, attend a workshop on the SCM, Recruitment and Selection procedures and processes.

 

4. Within thirty working days from the date of this report, present this report to the current Executive Mayor of the City, for disciplinary action to be taken against all current City employees who are responsible for the flouting of Recruitment processes, SCM processes or any other form of maladministration or improper conduct highlighted in this report.

 

The Speaker of City Council must:

 

1. Within sixty working days from the date of this report, ensures that the Council develops a policy regulating the exercise of discretionary power delegated to the Executive Mayor in relation to Grants for Funding or Donations to institutions or organisations which promotes public health, social welfare, art, culture and education within the jurisdiction of the City as contemplated in Section 79(16)(a) of the Transvaal Local Government Ordinance 17 of 1939.

 

2. Within sixty working days of the issue of this report; all City councillors attend a workshop on Management of Conflict of Interests and on Policies related to mandatory Disclosure of Conflict of Interests.

 

3. Within thirty working days from the date of this report, present this report to the MEC for Cooperative Governance and Traditional Affairs in the Gauteng province for a decision to address all irregular expenditure incurred as a result of maladministration and improper conduct highlighted in this report.

 

The CEO of Road Traffic Management Corporation must take appropriate steps to ensure that within sixty working days from the date of this report, engage in the necessary process to nullify the Metropolitan/ Traffic Police Diploma issued to Mr Tembe by JMPD on 30 June 2007 and further disclose or communicate the outcome of the nullification process to the HoD for Gauteng Department of Roads and Transport.

 

Portfolio Committee on Justice v Free State Provincial Government (Report No. 27 of 2020/2021

I deem it necessary to tell the story of the Estina Dairy Project case from the beginning for context. As you know, when I took over as Public Protector mid-October 2016, I inherited a number of investigations, which my predecessor in title, Adv. Thuli Madonsela, could not conclude. I had to pick up where Adv. Madonsela left off and finalise those matters.

Among those investigations was the Estina Integrated Dairy Farm matter. When I got involved, there was already a draft report dated November 2014. This suggests that the investigation was finalized nearly two full years before my arrival. A copy of that report can be found on the Public Protector website for ease of reference. 

Two back-to-back complaints from Dr. Roy Jankielsohn, a Democratic Alliance Member of the Provincial Legislature in the Free State, triggered that investigation. The one complaint was dated 12 September 2013 and the other was dated 28 March 2014.

In both those complaints, Dr. Jankielsohn never made any allegations whatsoever against any politician. I emphasise this because the scope of any of our investigations is determined by the complaints and specific allegations made against whoever the subject of the investigation is.

Accordingly, when the investigation commenced in 2013, the focus was purely on the issues that were contained in the complaint dated 12 September 2013 and later included issues dealt with in the second complaint of 28 March 2014, which also had nothing to say about the conduct of any politician.

Dr. Jankielsohn lodged a third complaint dated 10 May 2016, which did not form part of the investigation as we were already farther downstream. This was two to three years down the line and, needless to say, the investigation was already at an advanced stage.

With the exception of an allegation that former MEC Mamiki Qabathe refused to answer questions during a meeting of the Portfolio Committee on Economic Affairs, no allegations of impropriety were levelled against any politician even in that third complaint from Dr. Jankielsohn.

These things can easily be verified by obtaining the copies of these complaints from Dr. Jankielsohn himself.

It is a matter of public record that I concluded that investigation and proceeded to issue the report in February 2018. It is also public knowledge that the Gauteng Division of the High Court of South Africa reviewed and set aside that report, declaring it unconstitutional and invalid.

You will also be aware that attempts on the part of my office to appeal that ruling in both the Supreme Court of Appeal and in the Constitutional Court were unsuccessful.

It is important to set out this background of this matter so that the genesis of the case can be put in proper context. I now turn to deal with the latest Vrede Dairy Project matter.

 

I investigated allegations or suspicion of political involvement in the Vrede Dairy Project by the Free State Provincial Government (FSPG), and possible prejudice suffered by the intended beneficiaries (the beneficiaries) of the project.

 

On 6 March 2018 the Portfolio Committee on Justice and Correctional Services, raised concerns relating to political involvement in the Vrede Dairy Project implemented by the FSPG and possible impact on the intended beneficiaries of the project.

 

It is on the basis of the concerns raised by the Committee that I was requested to conduct an investigation focusing on these issues.

 

Whilst finalising this current investigation, I received a request from Dr Roy Jankielsohn, on 17 June 2020, requesting that I include in the scope of my investigation the issue of the contravention by politicians of the Prevention and Combating of Corrupt Activities Act No 12 of 2004 (PRECCA). He stated as follows:

 

“It would appear that the former Premier of the Free State, Mr Ace Magashule, and the then MEC for the Department of Agriculture and Rural Development in the Free State, Ms Mamiki Qabathe, and the former MEC for Finance, Ms Elzabe Rockman not only contravened section 34 of Chapter 7 of the PACCA, but aided and abetted what had already been identified as possible corrupt activities by making additional payments to the project after receiving the Accountant General’s report and after the termination of the contract.

 

We therefore kindly request the Office of the Public Protector to include in her final report a determination of the interpretation of section 34 of Chapter 7, as to whether the aforementioned individuals are complicit in terms of the PACCA”.

 

In a subsequent letter of acknowledgement to Dr Jankielsohn’s new complaint, I informed him that the issues contained in his complaint relating to PRECCA, will be taken into consideration in line with the relevant prescripts of the Public Protector Act 23 of 1994.

 

In terms of section (1) (a) of the Public Protector Act, the Public Protector shall have the power, to conduct a preliminary investigation for the purpose of determining the merits of the complaint, allegation or information and the manner in which the matter concerned should be dealt with.

 

A preliminary assessment of Dr Jankielsohn’s complaint established the following:

 

Section 34 of PRECCA places a reporting obligation on “any person who holds a position of authority and who knows or ought reasonably to have known or suspected that any other person has committed” an offence mentioned in section 34(1)(a) and (b);

 

The reporting obligation is limited to section 34(4) which states that for the purposes of section 34(1)  “the following persons hold a position of authority namely - 

 

1. the Director-General or head, or equivalent officer, of a national or provincial department; 
2. in the case of a municipality, the municipal manager appointed in terms of section 82 of the Local Government: Municipal Structures Act, 1998 (Act No. 117 of 1998); 
3. any public officer in the Senior Management Service of a  public body;
4. any head, rector or principal of a tertiary institution; 
5. the manager, secretary or a director of a company as defined in the Companies Act, 1973 (Act No. 61 of 1973), and includes a member  of a close corporation as defined in the Close Corporations Act,  1984 (Act No. 69 of 1984); 
6. the executive manager of any bank or other financial institution;
7. any partner in a partnership;
8. any person who has been appointed as chief executive officer or an equivalent officer of any agency, authority, board, commission, committee, corporation, council, department, entity, financial institution, foundation, fund, institute, service, or any other institution or organisation, whether established by legislation, contract or any other legal means;
9. any other person who is responsible for the overall management and control of the business of an employer; or 
10. any person contemplated in paragraphs mentioned above, who has been appointed in an acting or temporary capacity”;

 

Based on section 34(4) of PRECCA the Executive Authority of the Provincial Government (EXCO), in particular the former Premier of the Free State, Mr Ace Magashule (Mr Magashule), Member of the Executive Council (MEC) responsible for the Free State Provincial Department of Agriculture and Rural Development (DARD), Ms Mamiki Qabathe (Ms Qabathe), and the former MEC for Finance, Ms Elizabeth Rockman (Ms Rockman) are not listed as persons who have a reporting obligation in terms of PRECCA.

 

However acting on the basis of the legal precedence enunciated in the Mail and Guardian judgement, in the seminal case of Public Protector vs Mail and Guardian Ltd (422/10) (2011) ZASCA 108 (1 June 2011), the court held that the Public Protector is not a passive adjudicator between the citizens and the state, relying only upon evidence which is placed before her by the parties. The Supreme Court of Appeal (SCA) held further that the Public Protector should not be bound or be limited to the issues raised for consideration and determination by the parties but should, investigate further and discover the truth and also inspire confidence that the truth has been discovered.

 

The court further made it clear that the mandate of the Public Protector is an investigatory one, requiring pro-action in appropriate circumstances. Although the Public Protector may act upon complaints that are made, he or she may also take the initiative to commence an enquiry, and on no more than ‘information that has come to his or her knowledge’ of maladministration, malfeasance or impropriety in public life. The court emphasized that the Public Protector has a pro-active function. He or she is expected not to sit back and wait for proof where there are allegations of malfeasance but is enjoined to actively discover the truth.

 

Although section 34 (4) of PRECCA places no reporting obligations on EXCO, I have taken a decision to consider the conduct of Mr Magashule, Meds Qabathe and Rockman, in exercising their responsibilities entrusted to them in terms of the section 125, 133, 136 and 195 of the Constitution.

 

Whilst about to complete my investigation the appeal relating to Report 31 of 2018 on an investigation into complaints of maladministration against the Free State Department of Agriculture in respect of non-adherence to Treasury Prescripts and lack of financial control in the administration of the Vrede Dairy Project, was dismissed by the Constitutional Court on 28 August 2020.

 

On analysis of the complaint, the following issues were identified to inform and focus the investigation:

 

1. Whether there was any  political involvement in the Vrede Dairy Project by the Free State Provincial Government, and if so whether such conduct amounts to maladministration and improper conduct in terms of section 6(4) of the Public Protector Act, 1994; and

 

2. Whether there was possible prejudice suffered by the intended beneficiaries of the Vrede Dairy Project, and if so whether such conduct amounts to maladministration and improper conduct in terms of section 6(4) of the Public Protector Act, 1994.

 

The investigation process commenced with a preliminary investigation, followed by a formal investigation which was conducted through the exchange of correspondence with the FSPG, interviews with Messrs Magashule, Zwane, Thabethe and Ms Motaung and Mesd. Ms Qabathe and Rockman, as well as the beneficiaries of the Vrede Dairy Project. Information was also sought from the State Capture Commission of Inquiry (the Commission), Banks and affidavits obtained from former officials of the Department as well former EXCO members of the FSPG.

 

Section 7(9) (a) Notices were issued in terms of the Public Protector Act, 1994 to Messrs Magashule, Zwane, Thabethe and Ms Motaung and Mesd. Ms Qabathe and Rockman. Responses thereto were received and have been considered in this report. I further issued letters in terms of Section 6(4) of the Public Protector Act to former EXCO members of the FSPG that participated in decision taken at EXCO meetings relating to the Vrede Dairy Project.

 

Perusal of the relevant documents and correspondence received as well as the analysis and application of the relevant laws, policies and related prescripts was also conducted.

 

The Public Protector’s powers and jurisdiction to investigate and take appropriate remedial action was not disputed by the Department or any other officials. However, Mr Magashule in his response to the section 7(9) notice issued to him, raised issues pertaining to my jurisdiction to investigate the complaint, in its original form, and as amplified by Dr Jankielsohn, as addressed above, including making any findings against him.

 

Mr Magashule argues, amongst others, that this is due to the fact that the events complained of, the complaint itself, and my findings all do or will exceed the statutory two-year limitation on the Public Protector’s remit. He stated that  this is contrary to section 6(9) of the Public Protector Act, and further that my  approach in this matter did not disclose a single reason why his case qualifies as an “exceptional circumstance” that may allow me to extend the temporal limitation on my jurisdiction.

 

Mr Magashule’s argument in this regard is noted and although the exceptional circumstances that would allow me to exercise my discretion to investigate the matter was not detailed in the section 7(9) notice, it should be noted that in applying my discretion to investigate the matter, I considered that the allegations made, relating to the involvement of politicians in the misuse of public funds, and the prejudice suffered by the beneficiaries are addressed in finality.

 

It should further be noted that the exceptional circumstances relating to this investigation were addressed in statements issued by both the Portfolio Committee on Justice and myself, the importance of investigating the issues raised by the Portfolio Committee on Justice which suggested that there was political meddling in the Vrede Dairy Project which my Office had not dealt with in Report No. 31 of 2018.

 

Mr Magashule, in his interview with me on 18 October 2018 did not raise any objections to my jurisdiction in the investigation of this matter.

 

On 18 October 2018 I interviewed Mr Magashule the former Premier of the FSPG regarding the above matter.

 

During the interview I questioned Mr Magashule as to whether he was involved in the planning and implementation of the Vrede Dairy Project, to which he replied that he was “not at all” involved.

 

He indicated that the Vrede Dairy Project was brought and presented to the EXCO by the DARD and the Department of Finance in the Province, during which time Mr Zwane was the MEC for DARD and Mr Seiso Mohai (Mr Mohai) who was the MEC for Finance. He stated that the MEC for DARD supported by the MEC for Finance made a presentation to EXCO and after discussions EXCO adopted the Vrede Dairy Project as they were that “it’s gonna be people who also put money and we will put money and they were also going to work with the Department of Agriculture National.”

 

He stated that, at EXCO meetings, in the main they would have the MECs supported by their relevant HODs.

 

An unsigned copy of the memorandum submitted by Mr Zwane to EXCO.

 

I now deal with Part A of my conclusion in relation to Issue 1. 

 

The evidence uncovered by my investigation has derived a factual depiction of what transpired from the conception and implementation of the Estina Vrede Dairy Farm Project. The evidence from various sources as revealed from interviews and statements canvassed above, indicate that there was indeed political involvement in the Estina Vrede Dairy Farm project by the FSPG through EXCO who hold both positions as heads of their respective portfolios as well as being members of political parties.

 

The role of EXCO as the provincial Executive Authority, in taking part in the deliberations to  consider and approve the project as would have been tabled by the relevant MEC, followed by approvals of submissions for funding the project and subsequent requests made for further grants to be made available for the Vrede Project Dairy ,even after DAFF and the National Treasury had withheld grants towards the project, raised serious concerns on non-compliance with PFMA and other processes, showing a clear indication that EXCO had given support to the project and confirms the resolve with which the FSPG wanted to proceed therewith.

 

Therefore, the role of the EXCO in the initial stages of the project cannot be ignored, because in the infancy of the project, submissions were made for approval by EXCO, but I believe that these would have been preceded by robust deliberations, this is confirmed by the Premier statement to the Public Protector during the interview held on 18 October 2018, I am therefore inclined to believe that as EXCO, the members did not just rubber stamp what was presented to them, especially as the project was being funded by the FSPG and considered the flagship project of the province. This would have been a clear abdication of responsibility by EXCO as provided for in the Constitution.

 

In terms of section 125 of the Constitution the members of the provincial executive are entrusted with providing coherent strategic leadership and coordination in policy formulation, implementation and overseeing service delivery, planning and implementation in support of national and provincial priorities and in line with provincial budget plan, and are further held accountable for their decisions as EXCO members collectively and individually in accordance with section 133 of the Constitution.

 

I am therefore clear in my understanding of the responsibilities of EXCO and safely conclude that the Vrede Dairy Project and its proposed implementation could not have been left solely to the Accounting Officer with no oversight of EXCO.

 

From the evidence submitted, various engagements were held with the Office of the Premier, through the Director General and Legal Service in the Premier’s Office and the HOD regarding the conclusion of the agreements with Estina. It is therefore difficult to believe that these officials did not provide the Premier with regular status reports on the project.

 

As such, I am also inclined to conclude that the former MEC of DARD whose portfolio it was and the Project his brainchild in his own words, as well as the former Premier were aware of all proposals that resulted in such agreements being concluded with Estina. In fact, evidence adduced from Mr Motaung, Mr Thabethe and the intended beneficiaries put the involvement of the Former MEC Zwane at the centre of the project right from its conception.

 

The former Premier and MEC Zwane both announced the Project as part of a FSPG initiative in their respective state of the Province Address and budget vote during the 2012/13 financial year, which indicates that the project was supported by the FSPG and was undertaken as a flagship project to support Dairy milk farming in the province and emerging black farmers in dairy farming and processing.

 

Furthermore Mr Magashule’s submission under oath that he had no involvement in the project or implementation thereof is contradicted by the evidence adduced during the investigation, some of which come from the former members of EXCO whom I interviewed and even received affidavits from. From the evidence in my possession Mr Magashule appointed Mr Narayan as a Special Advisor in the Premier’s Office a day after he had approved a memorandum indicating that Mr Narayan would undertake a trip to India with Mr Thabethe for the purposes of the Vrede Dairy Farm Project, at State expense even though he had not yet been appointed. However, in his response to the section 7(9) Notice, Mr Magashule has vehemently denied any complicity in Mr Narayan’s employment in the Free State province.

 

The evidence indicates that the quotation for the trip to India, for both Mr Thabethe and Mr Narayan, was submitted by the travel agent on 24 February 2012, the very same day that Mr Thabethe submitted the memorandum requesting approval for the said trip to Mr Zwane. Mr Magashule approved the memorandum on 28 February 2012 two days prior to the appointment of Mr Narayan taking effect. The trip to India was undertaken on 29 February 2012.

 

The role of Mr Narayan in the project both prior and subsequent to his appointment to the Advisory Council in the former Free State Premier’s office has been alluded to by several parties I interviewed. Evidence indicates that he was a part of various engagements in what was unfolding with the project in the FSPG, these included his visit to India with Mr Thabethe and his involvement in the signing of the 99 year lease contract on the municipal land. In addition, Mr Narayan was a Director in a company called Siyabuselela Trading Enterprise 282 together with Mr Kamal Vasram, the sole Director of Estina.  .

 

Furthermore, when Mr Narayan was appointed as part of the Premier’s Advisory Council in February 2012, he was already known and prominent in the Free State province as stated by Ms Rockman during her interview with my team.

 

Therefore it is evident that Mr Narayan was known to provincial officials and as confirmed by Ms Rockman, associated with the Gupta Family through his representation during negotiations for the New Age Newspaper contract with FSPG. His subsequent involvement in the Vrede Dairy Project was further indicative of the Gupta Family involvement in the Project as he was a known representative of their business interests in the FSPG.

 

The evidence provided by Mr Zwane during his interview with me when compared to the evidence by Mayor Motaung and the beneficiaries puts him squarely at the centre of the conceptualisation and implementation of the project especially through both his roles as the former District Mayor of Phumelela Municipality and later MEC for DARD. Therefore his role in the conception and implementation of the Vrede Dairy Farm Project which he portrays to have been minimal, is inconsistent with what he has subsequently said in the response to the section 7(9) Notice because in his own words the Project was his own brainchild.

 

Furthermore, Evidence by Ms Rockman relating to her meetings with the Gupta family, firstly at the request of Mr Magashule on her way to an EXCO meeting in Bethlehem as well as her other meetings at their residence where issues regarding payment for the project were discussed are now being denied by her in the response to the section 7(9) Notice. Ms Rockman had initially stated during the interview with my team that these subsequent meetings (at the residence) were not at the request of Mr Magashule.

 

Ms Rockman asserted that there was nothing unique, sinister or untoward about private companies presenting to EXCO or that she had visited the Gupta family at their residence to discuss issues relating to their contracts especially since the Gupta family were not listed as Directors of Estina.

 

The conduct of Ms Rockman whereby she met the Gupta family at their home in Saxonworld, as well as their at their business premises ,to discuss payment issues on the Vrede Project, was highly improper as the visits had occurred on numerous occasions and therefore results in a possible conflict of interest between her official duties and private interests.

 

At the time, she had placed herself in a position that compromised her credibility and integrity as well as her position as the DG in the Premier’s office and later as an MEC of Finance. Her conduct in this regard would have been in violation of the sections 136 (b) and 195 of the Constitution.

 

I now deal with Part B of my conclusion in respect on Issue 1.

 

Evidence before me confirms that the NTAG submitted its report regarding the Vrede Dairy Farm Project to Mr Magashule and Ms Qabathe. The report informed them of the financial irregularities that had happened in the conceptualisation of the project as well as the irregularities in the procedures followed in entering into the agreement with Estina.

 

The NTAG report made several recommendations to the FSPG, which included, amongst other things, the stopping of funding towards the project until a proper risk management process was undertaken.

 

After receiving the NTAG report EXCO proceeded to approve the termination of the contract and transfer the project to FDC on 16 April 2014.

 

Evidence further indicates that Estina was paid a further R30 million on the 21st of July 2014 as well as R60 million in 2015 and R46 252 652 million in 2016 as approved by EXCO in the respective appropriation budgets

 

In his testimony to me, Mr Magashule stated that the Director General and Legal Services in the Premier’s office were given the NTAG report to look into but argued that the findings of the report were inconclusive and therefore he could not implement the findings of an inconclusive report. As such, he stated that instead he awaited for the issuing of my initial report.

 

Similarly, Ms Qabathe indicated during her interview with me that even though there had been various meetings between the HOD of DARD and the HOD of Provincial Treasury, there had been no legal obligation on the DARD not to continue funding the project.

 

The above statements provided by both Mr Magashule and Ms Qabathe which they confirmed again in the responses to the section 7(9) Notice regarding recommendations of the NTAG report raised serious concern especially with regard to the continued appropriation of funds by the FSPG EXCO. The National Treasury had clearly identified irregularities within a project that was funded and executed by the Provincial Government. As members of the Executive Authority responsible for oversight and the overall interests of public funds and development, they failed in their Constitutional obligations and required oversight responsibilities in terms of section 125,133 and 195 of the Constitution which require a higher standard of oversight and accountability from the Executive Authority.

 

Furthermore, the allegations being investigated by the NTAG report were not the first instances of alleged irregularities with regards to the project that had come to light at the time. Numerous media reports had covered the story of the Vrede Dairy Farm Project, linking it to the Gupta Family and alleging that it had been used as a vehicle to misappropriate public funds. This should not have been ignored by the FSPG, in particular EXCO.

 

Evidence before me indicates that the Executive Authority continued to approve the appropriation of additional funds on 11 November 2015 and 02 November 2016 to ensure monies where made available for the payment of Estina for the Project even though they were aware of the serious shortcomings identified in the NTAG report and the cancellation of the agreement between DARD and Estina.

 

The DARD, for its part, made no attempt at any stage to establish the validity of the costs that Estina had claimed to have incurred before payment thereof. Neither did the EXCO question the request to approve additional funds after the contract was cancelled. DARD relied entirely on Estina’s statement to that effect.

 

In the circumstances, it is difficult to determine how DARD justified the additional payments due to Estina in terms of Clause 15.3 of its contract for the additional payments. It is profound that even though the DARD was intent on cancelling the contract with Estina after receipt of the NTAG report, it made no attempt, legally or otherwise, to challenge Estina’s claim for full payment of monies due to it.

 

From Mr Thabethe’s response to the section 7(9) Notice, in terms of DARD’s contract with Estina, the latter was supposed to contribute R228 million towards the Project. However, DARD never claimed such payment from Estina, especially when the latter persistently pursued them for outstanding payments after termination of the said contract.

 

In light of the foregoing, Mr Magashule, Ms Rockman, Ms Qabathe and subsequent appointed MEC’s for DARD as well as EXCO, failed to take action or to stop further appropriation of additional funds for the payment to Estina and safeguard the provincial government from continuing to incur financial losses attributable to the Project even after it was terminated, or to recover money from the implicated individuals especially since the Auditor General had also been raising continuous audit concerns and made adverse audit findings around the Project.

 

Mr Magashule, Ms Rockman, Ms Qabathe and subsequent appointed MEC’s as well as EXCO also made no efforts on their parts to rationally interrogate and investigate the findings of the NTAG report including the appropriation of additional funds for the payment of Estina.

 

On the basis of the evidence before me, I have come to the conclusion that the FSPG EXCO led by the former Premier, collectively failed to perform adequate oversight over the project when it appropriated additional funding for the project ensuring that further payments were made to Estina.

 

I have also come to the conclusion that the relevant MECs of DARD in their individual capacities responsible for this portfolio, failed to perform adequate oversight over the project to ensure that due diligence is conducted throughout the existence of the contract with Estina.

 

They also failed to prioritise and protect the interest and welfare of the beneficiaries of the Project.

 

All of them therefore failed to discharge their responsibilities in terms of section 125, 133 and 195 of the Constitution.

 

I have also been made aware by Adv. Cronje the Head of the Investigating Directorate of the National Prosecuting Authority, in her letter to me dated 20 March 2020, that it is investigating criminal charges relating to the DARD’s contract with Estina and the implementation of the Vrede Dairy and that the charges under investigation include offences under the Prevention of Organised Crime Act 121 of 1998.

 

My conclusion with regard to Issue 2 are as follows:

 

From the evidence presented to me it is apparent that the project followed a set phased approach which included the identification of intended beneficiaries and approval of funding by EXCO of FSPG.

 

Evidence on account of most beneficiaries’ versions of their roles and knowledge of what transpired during the inception and implementation of the project, indicates that involvement of Mr Zwane from the inception of the project. On the strength of Mr Zwane’s address and engagement to the community, the beneficiaries submitted their names and ID numbers to DARD to be included as beneficiaries of the project.

 

The funding allocated to the project was, amongst others, given on the strength that the project would benefit members of the Vrede Community.

 

Once funding had been secured by the FSPG the project still had to undergo two (2) more phases before it could be rolled out to the beneficiaries. It is apparent from the evidence that FSPG used the beneficiary names and/ or list to secure CASP funding but failed to ensure that the project came to full fruition for beneficiaries to benefit as the beneficiary list was never finalised through a verification process as initially committed. The above conclusion is also supported by the evidence submitted by Ms Alter Meyer.

 

I am in agreement that the blame for failure of the project cannot be placed on National Treasury, as a result of the NTAG investigation, for having halted further funds to the project as National Treasury acted as a result of the failure to properly implement the project by Estina and FSPG.

 

The failure by the FSPG to properly manage and monitor the project with Estina, resulted in the failure of the beneficiaries obtaining any benefit from the project. This in turn resulted in prejudice towards the beneficiaries who had been given hope and expectation that such a project would result in the development of emerging black farmers, which would then bring positive, improved and permanent changes to the lives of the community.

 

The conduct of the Mr Zwane and Ms Qabathe, as MEC’s of DARD, was in direct violation of section 195 of the Constitution as they failed to properly administer their public office responsibilities which include the principles of equity, human dignity, fairness, accountability, transparency and good governance. They failed in ensuring that proper good governance, accountability and oversight was exercised so as to ensure full fruition of the project.

 

Furthermore the HoD of DARD failed the beneficiaries by not ensuring that Estina was accountable and transparent at all times during the implementation of phase 1 of the project.

 

It is unfortunate that the beneficiaries were sold an empty dream by those who were elected and responsible to change the local community’s lives for the better.

             

Having regard to the evidence received during the investigation, the regulatory framework determining the standard that should have been complied with, I make the following adverse findings:

 

1. Regarding whether there was any political involvement in the Vrede Dairy Project by the Free State Provincial Government, and if so whether such conduct amounts to maladministration and improper conduct in terms of section 6(4) of the Public Protector Act, 1994

 

Part A

 

(aa)       The allegation that there was political involvement in the Vrede Dairy Project by the Free State Provincial Government, is substantiated.

 

28. The process followed by the then EXCO of FSPG in approving the Vrede Dairy Project after it was presented for consideration by the erstwhile MEC of the DARD, and thereafter through concluding the agreement with Estina, provides credence to the allegation of political involvement in the Project. This was also confirmed by the former Premier’s specific reference to the Vrede Dairy Project in his State of the Province address as the flagship Project of the Province.

 

55. The evidence that I considered to arrive at my conclusion confirms the presence of outside involvement and undue influence by persons linked to the Gupta Family on politicians in how the Project was conceptualised and implemented.

 

82. I therefore find that Messrs Magashule and Zwane, Mesd Qabathe and Rockman failed to execute their oversight responsibilities entrusted to them in terms of section 125,133, 136 and 195 of the Constitution, even after they received the NTAG’s report which was notifying the FSPG of improprieties relating to the Vrede Dairy Project.

 

109. The Constitution as highlighted in my analysis of evidence, places a great responsibility on Members of the Provincial EXCO to provide leadership, guidance and oversight to the provincial administration whilst also holding such state functionaries accountable, which they failed to do.

 

136. The conduct of Messrs Magashule and Zwane, Mesd Qabathe and Rockman in this regard therefore amounts to maladministration and improper conduct in terms of section 6(4) of the Public Protector Act.

 

Part B

 

163. The allegation that EXCO improperly appropriated funds to ensure the payment of Estina even after DARD’s cancellation of the contract, is substantiated.

 

190. The continued approval by EXCO of the appropriation of funds to Mohoma Mobung project in order to ensure payments towards Estina, long after the contract had been terminated, is improper.

 

2. I therefore find that Messrs Magashule and Zwane, Mesd Qabathe and Rockman and the subsequent appointed MEC’s of DARD failed to execute their oversight responsibilities entrusted to them in terms of section 125,133, 136 and 195 of the Constitution by approving the appropriation of additional funding for the project after receiving the NTAG’s report and even after termination of the Estina contract.

 

244. The conduct of the erstwhile EXCO members which included Mr Magashule, Mesd Qabathe and Rockman and the subsequently appointed MECs of DARD, in respect of the additional funds appropriated for the payment to Estina, amounts to maladministration as envisaged in section 182(1) of the Constitution and improper conduct as envisaged in the section 6(4) of the Public Protector Act, 1994.

 

2. Regarding whether there was possible prejudice suffered by the intended beneficiaries of the Vrede Dairy Project, and if so whether such conduct amounts to maladministration and improper conduct in terms of section 6(4) of the Public Protector Act, 1994

 

1. The allegation that there was possible prejudice suffered by the intended beneficiaries of the Vrede Dairy Project is substantiated.

 

28. The conduct of Messrs Zwane and Thabethe and Ms Qabathe in failing to ensure proper oversight, accountability, management and implementation of the project by Estina resulted in the beneficiaries being prejudiced by termination of the contract, thereby causing them a loss of the benefit of development and their 51% shareholding in the project as undertaken in all subsequent interactions with the community members.

 

55. Messrs Zwane and Thabethe and Ms Qabathe failed to uphold sections 195 of the Constitution and the Batho Pele principles in that they failed to prioritise and put the interest and welfare of the project and beneficiaries first.

 

82. The conduct of Messrs Zwane and Thabethe, and Ms Qabathe as referred to above therefore amounts to improper conduct as envisaged in section 182(1) of the Constitution and maladministration as envisaged in section 6(4) of the Public Protector Act, 1994.

 

Therefore, in light of the above, the appropriate remedial action that I am taking as contemplated in section 182(1)(c) of the Constitution, with a view to remedying the improper conduct and maladministration referred to in this report, is the following:

The Premier of the Free State Province

 

1. To take note of the report in so far as the findings and remedial action contained herein are concerned and as the Executive Authority, assist in ensuring that the remedial action as provided for hereunder is expedited.

 

2. Within 30 working days of receipt of this Report, ensure that the Speaker of the Provincial Legislature tables the Report before the House, for deliberations and consideration of issues relating to my findings under paragraphs 6.1 to 6.5 of this Report, by members.

 

3. Within 30 working days of receipt of this Report ensure that measures are put in place for the members of EXCO to be inducted and sufficiently trained on their accountability and oversight responsibilities as provided for in the relevant sections of the Constitution cited in this Report.

 

4. Within 30 working of receipt of this Report consider my findings in so far as they relate to MEC Qabathe, and consider issuing appropriate sanction against her for her role in the Project as alluded to and her omission to exercise oversight responsibility as the MEC for DARD required as provided for in sections 125,126, 133 and 195 of the Constitution.

The MEC for Agriculture in the Free State Province to:

1. Within 30 working days of this Report issue an official apology to the beneficiaries of the Project for the prejudice they have suffered emanating from the Department’s failure to treat them as required by Batho Pele Principles, as well as failing to involve them in the Project at all thereby not preserving and protecting their welfare and interest.

 

2. Within 30 working days of this Report ensure that an audit is conducted of all the beneficiaries of the Project for purposes of having a database of all of them and their heirs for those who are unfortunately deceased.

 

3. Within 60 working of this Report ensure that the Project is revived and the beneficiaries as 51% shareholders, are full participants in the Project along the same vision of the Mohoma Mobung as was envisaged by the FSPG EXCO when it launched the Vrede Dairy Project as its “flagship project”.

 

The Head of the Investigative Directorate of the National Prosecuting Authority to:

1. Consider this report in conjunction with their current investigation in relation to the possible criminal charges, including offences under the Prevention of Organised Crime Act, in respect of the Vrede Dairy Project.

 

As I conclude, I look forward to the acceptance of the findings and the full implementation of remedial action in all of the above reports in the interest of goof governance and the rule of law. Where clarity is needed, we are available to assist.

 

I wish you all a wonderful festive period and a prosperous New Year. Let us stay safe on the roads and continue taking precautionary measures to cushion ourselves from the COVID-19.

 

Thank you.

 

Adv. Busisiwe Mkhwebane

Public Protector of South Africa

 

Adv. Kholeka Gcaleka

Deputy Public Protector of South Africa