There has been a backlash against President Jacob Zuma’s comments on ANC membership benefiting business, with a legal expert asserting that such an arrangement was “another form of corruption”. But before there was even time for the media storm to blow over, Mail & Guardian released a damning exposé, giving detailed evidence of how a R1.25-billion tender to supply the City of Johannesburg with tamper-proof 'smart meters' was fiddled with to ensure the contract went to one of the president’s most generous pals, Vivian Reddy.
Seems Zuma’s comments at the ANC’s anniversary gala dinner were a lot more than empty promises!
But the ANC has come out guns blazing in support of these controversial utterings and suggested to DA parliamentary leader Lindiwe Mazibuko, who called for Zuma to retract his remarks, that she was out of touch.
"It is a sad fact that ... Mazibuko is so naive when it comes to African traditions that she cannot relate to them," party spokesperson Jackson Mthembu said in a statement last week. "If business wants to prosper in South Africa, they have to support the ANC as their prosperity is dependent on the ANC being at the helm of South Africa’s government.
"It is our tradition as Africans that if someone gives you something, in return you thank him/her and wish them prosperity and abundance,” Mthembu added.
So one wonders if the recently reported R1.25-billion tender-tamper was exactly that, considering it was Reddy who saved the day back in 2003 in funding the Nkandla homestead when Schabir Shaik “ran into difficulties”, the M&G reported. Reddy also forked out R450 000 for a table at the recent anniversary gala dinner.
Meanwhile advocate Paul Hoffman, of the Institute for Accountability in Southern Africa, has been quoted in the press as saying there has a been a “blurring of the lines between party and state” in enticing businesses to support the ANC, adding that this kind of arrangement was “another form of corruption”.
“The implication is accordingly clear: those who offer gifts to the ANC can expect their ‘investment’ to ‘multiply’. Notice that it is a gift that is expected and that Zuma appears to have been promising rather than wishing prosperity to those who support the ANC.
“The ANC is a political party. It does not, of itself, have the means to make investments multiply,” Hoffman wrote in Business Day last week.
The IFP has also slammed the comments, saying the president was “promoting corruption by urging businesses to support the ANC for personal gain”.
It was “shameful for the president of South Africa to make such a statement, which amounts to encouraging corruption, at a time when South Africa is plagued by this curse,” IFP deputy spokesperson Joshua Mazibuko said.
“Simply put, the president was telling business people that the only way in which they could guarantee business opportunities and prosperity in this country is by joining the ANC. It is clear that the ANC is no longer about serving the country. Instead, all unscrupulous business people … will now definitely rush to swell the ranks of the ANC,” Joshua Mazibuko was reported as saying in The Star.
Prosperity, as promised
In the the lucrative electricity mater tender and what the M&G uncovered,
it is alleged that Sicelo Xulu, the Zuma-aligned chief executive of City Power played a more involved role than usual in ensuring the deal went to Reddy’s company, Edison Power, and not the more cost-effective bidder, Hefcom or Mandla Technologies.
The publication goes on to say there are detailed allegations “that an initial technical evaluation scoresheet was amended to improve the result for Reddy's company” and that the “revised scoring pushed Hefcom below the cut-off 70% technical score. When price was factored in, Hefcom – whose bid was half the cost of Edison's – would have scored better than Edison,” M&G reported.
What’s more is that the letter informing Edison it had won the bid is dated before the tender decision was even finalised and, more outrageously, “Edison's share of the contract was pushed up from an initial recommendation of a R600-million share of an R800-million contract to an exclusive contract for R1.25-billion.”
Hefcom offered a price of between R4 500 and R5 400 per meter, while Edison was charging R9 716 per meter. It’s also worth noting that Hefcom uses local technology and all components are manufactured here, unlike Itron, the US company brought in to supply the Edison meters.It seems a no-brainer that going with the cheaper option, which would also have positive spinoffs for the South African economy, made the most sense.
Hoffman touches on the subject of tenders in his recent write-up in Business Day: “Section 217 of the Constitution says the procurement of goods and services must be done ‘in accordance with a system which is fair, equitable, transparent, competitive and cost-effective.' These principles are fleshed out in the Public Finance Management Act; they leave no room whatsoever for ANC donors to have everything they touch multiply simply through being donors.”
It’s hard to see how Edison’s offer to City Power could have been the most competitive and cost-effective.
City Power has ruled out foul play in the tender process and M&G reported its preliminary enquiries prompted Xulu to appoint auditors Ernst &Young to review the tender award process. The results of that investigation should be interesting.