MEGA claims it has no knowledge of DA’s allegations of cartel
MEGA said it does not have information about what happened, as the relationship with the developer only started in 2017 and these events occurred before its own involvement.
The Mpumalanga Economic Growth Agency (MEGA) says it does not have any knowledge about a cartel.
This follows a media briefing in which the Mpumalanga DA said it had written to the Office of the Public Protector, asking it to investigate suspected tender irregularities at MEGA and a possible tender cartel working in the province.
According to the DA, in 2010, a construction company had bought an erf from the then Mbombela Local Municipality for just under R28m. “In 2019, the company sold that same erf for over R17m less than it had paid for it. A third construction company then built a building on that erf after winning a tender from MEGA, which was then rented out to MEGA to use as offices.
“According to the lease agreement, MEGA will be paying a monthly amount of R1 067 800 (including parking, rental and facilities management), which will escalate annually by 8%. With the 8% annual increase, MEGA would have paid over R185m renting a building. It has also come to light that at least two other companies plan to invest over R120m into the project.
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“One needs to question why a company would invest a further R120m into a project where the return of the investment is only R185.6m in 10 years?”
Mandla Mkhabela, the general manager of corporate services and the chief information officer of MEGA, said it does not have information about what happened, as the relationship with the developer only started in 2017 and these events occurred before MEGA’s involvement.
According to him, the office space is a need for the agency to be able to fulfil its mandate. “MEGA is currently renting a smaller space at the ABSA Square building, which is not sufficient for requirements. It is going to pay industry rates for the new offices.”
Mkhabela disputed the allegation that MEGA is not following its mandate. “It is following its mandate and is monitored by the Department of Economic Development to ensure that MEGA achieves its objectives.”
When asked about the amounts of the erf transaction, Mkhabela said, “MEGA does not have any information on events that occurred before the service provider was appointed in 2017.”
When asked if the allegations are all false and if the agency can provide proof of it, he said, “MEGA is in no position to confirm or deny these allegations and therefore cannot provide proof for something that we are not aware of.”
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Mkhabela said that in the procurement process for the agency’s new headquarters, the tender for the provision of office accommodation was advertised on the Mpumalanga Tender Bulletin in September 2017 (Tender Bulletin volume 256) with a closing date of September 28, 2017.
“Seven interested bidders submitted bids for consideration by MEGA. Only one bidder was awarded the tender.”
MEGA also released a statement with the following:
“We appreciate that this matter has been referred to the Office of the Public Protector for further investigation, a step that we welcome. As an organisation, we have full confidence in Chapter 9, institutions such as the Public Protector of South Africa and its role in strengthening constitutional democracy in the country.”
