By Adv Boitumelo Babuseng, MPL, DA Provincial Spokesperson for Economic Affairs:
The Democratic Alliance can reveal evidence of corruption or collusion, emerging from the Northern Cape Department of Economic Development and Tourism’s first quarterly report for the 2015/16 financial year. The report reveals that technical assistance to access tenders, or preference for contracts, has been given to the spouse of the MEC for Finance, Economic Development and Tourism – John Block. It also shows that a company belonging to the spouse of the Chairperson for the Portfolio Committee on Finance was pre-targeted to receive financial support from the department’s Economic Growth and Development Fund.
Each of these scandals is evidence of maladministration and mismanagement of the department’s mandate to drive economic opportunities in the province. Instead of expanding opportunities to all entrepreneurs, opportunities are restricted and emerging entrepreneurs are denied their chance to succeed because they do not have the right political connections. The Economic Growth and Development Fund is the department’s main empowerment vehicle to broaden access to opportunities for entrepreneurs who cannot secure funding on their own. We cannot turn it into a system to dispense patronage to people with the right political connections.
The report reveals that Insimbikazi Trading CC, which is registered on the Companies and Intellectual Property Commission database as belonging to Ms. Noluthando Silungile Block, received assistance to obtain public sector contracts. She is the sole director and also the spouse of John Block. As further confirmation of her connection to him, the physical address listed for Insimbikazi Trading is also the home address of the MEC for Finance, Economic Development & Tourism.
The company was registered on the 22nd of September 2008. According to the quarterly report from the department of Economic Development and Tourism, Insimbikazi Trading is in the electrical industry and supplies geysers.
It is unacceptable that the spouse of any MEC benefits from any government contracts. This is a massive conflict of interest which has not been properly disclosed. It means that the household of the MEC for Finance, Economic Development and Tourism has benefited from this assistance, whether directly or indirectly. He is abusing his power and the public resources available to him through his department on a grand scale.
It is highly unlikely, bordering on impossible, that the assistance was given to Insimbikazi Trading without anyone in the department knowing that the MEC’s spouse would reap the benefits.
We are disturbed by the department’s denial of the ownership of Insimbikazi Trading and its attempts to cover up the corruption. The programme director for the unit, Mr. Darryl Christians, denied on record in the committee meeting that the company is registered to Ms.
Block despite the fact that CIPC records show that the official was misleading the Legislature.
Assistance was also rendered to Karibuni Security Services, a security company which has been established since 2000. The director of Karibuni Security Services is Mr. Motsamai Rantho. Karibuni Security Services has been successful in securing its own contracts, such as providing security services to StatsSA and at the site of the psychiatric hospital in Kimberley. It was recently awarded a contract worth R69 million by the Northern Cape Department of Health to provide security services at the five district offices.
By delivering assistance to a company of Karibuni’s size, the department is not expanding economic opportunities to all. A company of this strength should not need government intervention when contracts are awarded. Assistance to a well-established business like Karibuni Security Services redirects resources which should have been allocated to emerging entrepreneurs. Entrepreneurs, especially black entrepreneurs, need support from government. Contrary to its own objectives, the department is not expanding opportunities to new companies and emerging entrepreneurs. It is, in fact, restricting opportunities to the politically connected elite and recycling opportunities to the same companies.
We have followed up with written questions to the department to determine the nature of the assistance given to Insimbikazi Trading and to Karibuni Security Services. Our questions were submitted on the 21st of August and, according to the Rules of the Northern Cape Provincial Legislature, we should have received a reply by no later than the 7th of September. To date, we have not received any reply and the department’s silence on this controversial issue is deafening.
We have been informed that Insimbikazi Trading received a contract to supply equipment to Eskom. We will be following up this information to determine the financial value of this contract.
The department’s Economic Growth and Development Fund pre-targeted three companies for funding. Being pre-targeted means that the department identified you for support, including financial assistance.
One of the three companies is ABC Tours and Sons, which belongs to the spouse of the Chairperson for the Portfolio Committee on Finance, Economic Development and Tourism. The Chairperson for the Portfolio Committee, Ms. Gail Parker, also happens to be the deputy secretary of the provincial ANCWL.
Whenever you drive past her house, you will see vehicles branded with the ABC Tours and Sons logo parked inside the property. The department also did not refute the statement that it pre-targeted a company belonging to the spouse of the Chairperson for the Portfolio Committee on Finance, Economic Development and Tourism.
The Economic Growth and Development Fund needs to prioritise entrepreneurs who cannot secure financing on their own. We do not wish to speculate on the personal finances of the Chairperson of the Portfolio Committee or her family, but it is unlikely that a highly paid member of a provincial legislature needs to apply to the Economic Growth and Development Fund as a last resort. She is likely to have succeeded with an application for a business loan.
The second of the three companies that was pre-targeted for funding is Jakes General Dealer in De Aar. It was advertised for sale on Gumtree for R550 000 on the 15th of July 2015. We get the impression that the owner received funds to renovate his shop and is now selling it to turn a profit. During the presentation, the department appeared shocked at this turn of events. Why does the department not monitor the companies that receive assistance? How does it ensure that companies are financially sustainable if it just hands over the cash and goes away?
We cannot risk becoming desensitized to corruption of this nature. The report which reveals these facts only covers the first three months of the financial year. It is not acceptable that a single cent of public funds, which must support entrepreneurs and SMMEs, is being misdirected to benefit the MEC and his friends.
The DA has submitted a raft of questions to the Legislature on these matters and will closely monitor responses.