Top govt jobs drive under threat over R30m Mvula tender scandal

A company subcontracted irregularly by Mvula Trust to implement a flagship anti-poverty and job-creation programme for government is threatening to pull out, a move that could see thousands of people dependent on the project losing their source of livelihood.

The threats are contained in an extremely disturbing email in Corruption Watch’s possession. The email is addressed to Mr John Ngobeni, a senior official in the Department of Cooperative Governance and Traditional Affairs (Cogta). The email was written by Mr Phiwa Mathenjwa, the executive and major shareholder of Ubuntu Sima, the company subcontracted irregularly by Mvula Trust in the R30-million deal.

Earlier this year a Corruption Watch investigation revealed that Mvula had won a government tender eligible only for NGOs but had subcontracted the implementation tasks – accounting for about 60% of the tender value of R30-million – to a for-profit company, Ubuntu Sima. In the tender application, Cogta was kept in the dark about the identity of the subcontracting company and the unusual extent of its involvement in the project. Cogta did not ask for this vital information either.

The email in question advises Cogta that as of the 14^th May, Ubuntu Sima will no longer be performing the vital implementation tasks assigned to it by Mvula due to a dispute between the two parties. The tasks included paying wages to some 70 000 participants in the Community Work Programme in Gauteng, Mpumalanga, and Limpopo. Since early this year there have been major protests by Gauteng participants in the programme over alleged non-payment of wages.

“This is highly disturbing considering that Cogta failed to probe the relationship between Mvula and its subcontracting partner, which is highly irregular. The upshot is that an admirable and well-conceived government programme has been trashed. This establishes in the most graphic and tragic terms that the poorest of the poor pay the highest price for corruption,” says Corruption Watch executive director David Lewis.

The Corruption Watch investigation highlighted a number of irregularities, among which revealed:

• That the major owner of the sub-contracted company, Ubuntu Sima, is a Ms Gabsie Mathenjwa, who is also a long-serving member on the board of trustees at Mvula. In short, there was a massive conflict of interest.
• Mvula, in bidding for the contract, effectively acted as a front for Ms Mathenjwa’s company.

Corruption Watch has repeatedly over the last five months informed Cogta of these gross irregularities in the tender. However, we received no response. In recent weeks the Minister of Cooperative Governance and Traditional Affairs has established an enquiry to examine these aspects of the Community Work Programme. Corruption Watch has been invited to make submissions to this enquiry, which has until the 15^th June to report back its findings.

“While we believe that a detailed investigation is undoubtedly necessary, events on the ground have rendered this a luxury insofar as this vital programme is now threatened with imminent collapse in at least in three provinces.  Government needs to act with extreme urgency if this programme is to be saved.”

Corruption Watch believes that if the Community Work Programme is to be rescued, the inter-ministerial committee responsible for overseeing the programme must assume responsibility for it, at least until Cogta’s questionable role in the awarding of this tender has been investigated.

“There are rules governing tender processes precisely to avoid this outcome. When the rules are flagrantly ignored, as in this case, we need to ask ‘why’ and ‘in whose interest’ have the rules been bent? Those responsible for this must be brought to book,” said Lewis.

For more information:

David Lewis 082 576 3748

View this press release as a PDF here.