The Mpumalanga DA has gone on record several times calling for the disbandment of the Mpumalanga Economic Growth Agency (MEGA).
The party reiterated this during its media briefing on Friday August 12 at the DA offices in the Provincial Legislature.
Jane Sithole, the chairperson of the Mpumalanga DA, said they believe that from the beginning, MEGA was nothing but a cash cow for the comrades.
“Our reasons for calling for the disbandment of the agency are all the little bits we have been finding out over the years. The agency has lost credibility, according to us, because everything they have done so far points to losses and nothing points to any generation of revenue or any creation of employment as it should. Keeping MEGA is really giving the people of this province a middle finger that will continue to drain millions without producing anything.”
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The DA said it has written to the Office of the Public Protector to ask it to investigate MEGA and a possible tender cartel working in the province.
“In 2010, a construction company 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. We question whether this makes any business sense, taking into consideration that prime property prices usually escalate annually.
“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 ridiculous 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 R185 million renting a building. Why can’t they build their own? It has also come to light that at least two other companies plan to invest over R120m into the project. 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?
“The DA strongly suspects that there is a Mpumalanga tender cartel that is monopolising all the tenders in the province through MEGA and influential politicians.
Their modus operandi seems to be to suppress and eliminate any competition. The agency’s mandate as a parastatal of the Department of Economic Development and Tourism should be to build and maintain a property portfolio that can generate income, help achieve organisational sustainability, and facilitate employment creation.”
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The DA’s Bosman Grobler said it is important to remember the mandate of this agency.
Mandla Mkhabela, general manager of corporate services for MEGA, said the agency does not have any knowledge about the cartel.
“The agency has no information in relation to what happened, as the relationship with the developer only started in 2017 and these events occurred before its involvement.”
Mkhabela said the agency is following its mandate and is monitored by the Department of Economic Development to ensure that it achieves its objectives.
When asked about the erf, this what the agency had to say: “MEGA does not have any information on events that occurred before the service provider was appointed in 2017.”
Read more on the next print edition of Mpumalanga News.
