By Craig McKune
As we sent this week’s front-page story — on how to rip off the government through state leasing — to the printers, a successful BEE property developer called us.
“I just want to give you a bit of perspective,” he said, before reading out a list of state leases in commercial buildings: national departments, state agencies, police.
He was trying to make two points.
First, none of these leases was awarded using an open tender process. “Actually about 80% of state leases are awarded without an open tender process,” he claimed.
Not all of these are corrupt; rather, the department of public works — responsible for state leases — is habitually taking short cuts in its procurement process, the developer said.
Second, he said white-owned companies, not BEE companies, held 10 of the leases on his list. His point here was that bad procurement practice was not only a trend favouring black businessmen.
In this week’s Mail & Guardian we describe how it is becoming trendy for BEE characters to siphon off state funds, using their political connections to secure inflated state leases, which they then use to secure unnecessarily large bank bonds, which then fill the trough so the pigs can feed while taxpayer money is used to replace the feedstock.
Businessman Roux Shabangu might be one of the best examples of this, with the public protector’s investigation showing how he was awarded two massive state leases by being allowed to negotiate his tenders with public works. Whether or not he used political links was not clearly demonstrated however.
If it turns out to be true that most state leases were awarded without a tender process, while that doesn’t mean all the leases were corrupt, it means that in each case the window was opened for government officials — often pressured by their political bosses — to favour a certain businessman for whatever reason.
“They should always be doing open tenders,” the property developer ranted. While he was at pains to point out that all developers are not corrupt BEE cronies, he was pissed off that people like Shabangu had made such a public and political mess of the state leasing game.
If public works would just follow the book and run open tenders — advertising, comparing bids, and choosing the best-qualified property owners — business could run smoothly and cleanly, he said.
“All of us do well off state leases.” Government leases longer than any other tenant, and needs the most space. It is lucrative, yes, but it need not be dirty.
Now our developer source claims to be considering getting out of state leasing entirely — we know of two major state leases in his buildings — as bad publicity like Shabangu’s case, brings too much risk to his business.
Craig McKune is an investigator with amaBhungane, the M&G Centre for Investigative Journalism.
Don’t worry, such shenanigans by the ANC cadres will be hidden after the Secrecy Bill will be enacted. This is the sole purpose of it.
I wonder if these blogs will also be declared classified or forbidden altogether “for the sake of national security”. The outside world will not be surprised, since we are following the usual African pattern.
The only continent on earth that seems to take great pride in slowly destroying itself.Cry my beloved country.WAKE UP AFRICA.
@Shaw, what you are saying is true but, the people in SA can stop this from happening with the state secrecy bill. What wasn’t not pointed out that many of these people are getting BEE contracts and then contracting them out to white companies.
Off course…you first need to lay the platform for the slime to flow on…
The ficus cake is not big enough to uplift the poor as it is a worldwide problem. There are simply too many ‘have nots’ to live off the ‘haves’ so the ANC fat cats may as well plunder the resources for themselves. A few ANC fat cats that get super rich will make no difference to many ANC supporters who have nothing anyway. Its also pertinent to note that the ANC received an overwhelming majority in the recent elections so we must assume that the ANC ‘have nots’ are happy with the situation. The fact that the ANC fat cats also rip off 1/3 of the population that object to what they are doing is of no matter to them. They have the power and that power is being used to en-richen thenselves, friends, relatives and cadres who ‘deserve’. Democracy does not work in Africa or anywhere for that matter where the money earners are outvoted by the money spenders.
fergie’s quite right about BEE companies subcontracting to white-owned companies, which is why costs so often rise so suddenly after tenders are awarded. The BEE company creams its commission off the top and the white companies cannot do the job for the remainder because the quotations are little more than thumb-sucks; suddenly inflation becomes an issue…it should have been included in the original quotes. Many big companies couldn’t be bothered to tender at all any more. They are wise. Instead, they are assured plenty of work once the BEE crews have won the tenders although they are not capable of doing the work. Look to some of the big construction companies, such as those who ended up working on the stadiums last year. In theory, BEE and AA should work, in practise neither does because any system is open to fraud.
It’s fair to say that the media don’t always get all their facts right; sometimes there are gaps they cannot initially perceive. But if they cannot even question the entire country stands to be ripped off more often and more aggressively. If the PIB goes thru’ parliament, it will prove only one thing…that the majority of ANC parliamentarians are crooked to the core!
Simple solution. Make it a condition of any lease award that the contract is null and void unless a tender process has been observed
Sick of complaining . Fight back with an iron fist !
Another solution. Any one who is complicit to an act of corruption or knows about it and does not report it should be as guilty as the corrupt party and should forfeit his entire estate
This is war ! Our country is being dismantled brick by brick
Ooops ! I forgot the complainers do not make the laws and those that do are building barricades to carry on feeding ! Do you think the question of money was not raised by JZ on his visit to MG (he who funded his trial if the report is true!)
@Peter, there is no checks and balances in SA justice system. Check out the deal with Zuma’s son where he would become a instant rich person.
“South Africa is the only country in the world where affirmative action is in the favour of the majority who has complete political control. The fact that the political majority requires affirmative action to protect them against a 9% minority group is testament to a complete failure on their part to build their own wealth making structures, such that their only solution
is to take it from others.”
London Times
The London Times @Larry Lachman says it better than any of us has ever done. Indeed, SA is a land of smoke and mirrors. False, from the top down.