Tender for the construction of Talana Shacks in Limpopo Province was fraudulently obtained
The Special Investigating Unit (SIU) has concluded its investigation into the R15.3 million tender awarded by the Limpopo Provincial Government for the construction of 192 transitional residential areas, popularly known as Talana shacks.
The SIU investigation has revealed that the tender was fraudulently obtained. The appointed service provider, Aventine Group CC, made misrepresentations and forged documents of industry experts with no links to the company to influence the direction of the bid.
In July 2020, Premier Stanley Mathabatha referred allegations to the SIU with regard to the construction of shacks for hostel dwellers during the national state of disaster by the Limpopo Co-operative Governance, Human Settlements & Traditional Affairs (COGHSTA).
The SIU was, in terms of Proclamation R23 of 2020, directed by President Cyril Ramaphosa to investigate allegations of corruption, malpractice, maladministration and irregularities in the procurement of goods and services during the Covid-19 state of disaster.
Limpopo COGHSTA identified a number of densely populated informal settlements in Limpopo Province which made it difficult to observe social distancing as per Covid-19 regulations. Priority was given to two settlements, Talana Hostel in Tzaneen and Burgersfort Ext. 10, which required urgent attention in the form of a partial relocation.
The investigation revealed that COGHSTA appointed an implementing agent, the Housing Development Agency (“HDA”) for the establishment of transitional residential areas. HDA then appointed a service provider, Aventino, to construct 192 units to sum of R12.3 million. An extension of scope was approved to include the construction of 152 pit toilets and installation of three water tanks (10 000 litres), for additional fee of R3 million, taking the contract value to R15.3 million.
The service provider only managed to construct 40 shacks at Talana Hostel and submitted two invoices totalling over R2.5 million, which were paid between April and October 2020. In Burgersfort Ext.10 site, no structure was completed as there were only half build ones. In line with SIU Act 74 of 1996, the SIU has referred evidence pointing to criminal action against the director of the Aventine Ms Constance Mohlala to the National Prosecuting Authority for further action. As a result, Ms Mohlala was arrested by the Hawks in December 2020 -Polokwane Case: 384/12/2020- and she is facing criminal charges for submitting fraudulent documents to influence the direction of a tender.
Furthermore, the SIU made a referral to HDA recommending that the service provider be restricted from doing business with government. The matter has been escalated by HDA to the National Treasury for consideration.
In addition to the above mentioned referrals, the SIU is in the process of instituting civil proceedings in the Special Tribunal to review and set aside the R15.3 million contract and recover financial losses suffered by the State.
Mr Kaizer Kganyago (SIU) Special Investigating Unit
Tel: 012 843 0048
Cell: 082 306 8888