State capture report p4: Highlights on Eskom, FS asbestos and dodgy tenders

Some 16 individuals and entities - among them former Free State premier and now suspended secretary-general of the ANC, Ace Magashule - are already facing criminal charges in connection with the saga.

Members of the People’s Movement hold placards outside the Bloemfontein Magistrates Court on 2 October 2020 where 7 suspects are appearing on corruption charged related to a multi-million rand Free State asbestos project. Picture: Xanderleigh Dookey/EWN

JOHANNESBURG - Chief Justice and chair of the State Capture Commission of Inquiry, Raymond Zondo, is calling for new legislation that would make it a criminal offence for government officials to dish out tenders without proof that they’re going to companies that know what they’re doing.

This on the back of the Free State asbestos removal saga that saw the provincial Department of Human Settlements fork out more than R200 million for a contract to identify and eradicate asbestos roofing on low-cost homes.

Despite the massive amount of money that was paid over to the two companies that were awarded the contract - Blackhead Consulting and Diamond Hill - the roofing in question was never even removed.

In the commission’s fourth report, which was published on Friday, Zondo found the companies in question actually had no “training, qualifications, expertise, accreditation, experience, or knowledge” of working with the dangerous material.

NEW LEGISLATION

And in line with this, he recommends that consideration be given to ensure that legislation and policies of government departments or state-owned entities or companies “require that no entity or person or service provider may be awarded a tender or may conclude any contract with a government department or state-owned entity or company unless it has produced proof of relevant qualifications, skills, experience or expertise required to perform the work”.

Furthermore, he recommends making it a crime for government officials not to do their due diligence.

“It is recommended that consideration be given to the enactment of legislation that will make it a criminal offence for any official, office bearer of a government department or of a state-owned enterprise or company to award a tender to or award a contract for the provision of services [or] goods with any person or entity unless he or she has satisfied himself or herself or itself that such person or entity has produced proof of possession of the minimum academic qualifications or expertise or experience,” he said.

Some 16 individuals and entities - among them former Free State premier and now suspended secretary-general of the ANC, Ace Magashule - are already facing criminal charges in connection with the saga.

Zondo, however, has also recommends the government look into what legal options it has available to try and claw back the money that was paid over.

“It is recommended that the government obtains a legal opinion aimed at establishing whether it would be able to successfully recover the monies it paid to the Blackhead Consulting and Diamond Hill joint venture in regard to the asbestos eradication project, for which it received no value, or because the Blackhead Consulting and Diamond Hill joint venture made a misrepresentation to the department of human settlements that it had the qualification or expertise or skills or experience necessary for the performance of the job, when it had no such experience, expertise, qualifications or skills,” he said in the report.

NEW REQUIREMENTS FOR BOARDS

Zondo says new ways of appointing boards of state-owned companies need to be adopted.

“The way members of boards of state-owned companies are appointed cannot remain as it has been during all the years which have been covered by the investigation of the commission. The same applies to the appointment of chief executive officers and chief financial officers of these companies,” he said.

His remarks come against the backdrop of the rot at Eskom that was uncovered during the commission - a major focus of this instalment.

“The evidence heard by the commission has revealed quite clearly that part of the reason why some of the state-owned companies have performed as badly as they have and why some rely on government bailouts year in year out is the calibre of some of the people who are appointed as members of the boards of these companies or who are their chief executive officers and chief financial officers”.

THE ROT

And he said that in the fifth and final instalment, which is set to be released by mid-June, recommendations would be made regarding the changes that must be made.

For now, Zondo found that the evidence proved “a scheme by the Guptas to capture Eskom, install the Guptas' selected candidates in positions of strategic importance within Eskom as members of the board, the committees of the board and executives at Eskom so as to then be able to divert Eskom’s financial resources to themselves, their entities and their associates”.

He further found that former president Jacob Zuma had been “central to the Guptas’ scheme of state capture” and that they must have identified him “at a very early stage as somebody whose character was such that they could use him against the people of South Africa, his own country and his own government to advance their own business interests”.

“President Zuma readily opened the doors for the Guptas to go into the state-owned-enterprises and help themselves to the money and assets of the people of South Africa,” Zondo said.

“It is clear that from quite early in his first term President Zuma would do anything that the Guptas wanted him to do for them”.

Zondo recommended potential prosecutions against a string of former Eskom heavyweights, including Matshela Koko, Vusi Mboweni, Ayanda Nteta, Jacques Roux, Anoj Singh, Sean Maritz and “all the people still alive who were members of the 2014 board”.

READ: State Capture Commission Report Part IV Vol I

State Capture Commission Report Part IV Vol I by Primedia Broadcasting on Scribd

READ: State Capture Commission Report Part IV Vol II

State Capture Commission Report Part IV Vol II by Primedia Broadcasting on Scribd

READ: State Capture Commission Report Part IV Vol III

State Capture Commission Report Part IV Vol III by Primedia Broadcasting on Scribd

READ: State Capture Commission Report Part IV Vol IV

State Capture Commission Report Part IV Vol IV by Primedia Broadcasting on Scribd