Mpumalanga economic agency rocked by allegations of corruption

The Mpumalanga Economic Growth Agency (MEGA) is allegedly used by a cartel of influential politicians controlling tenders in the province, suppressing and eliminating competition.

In 2010, a construction company allegedly bought an erf from the Mbombela Local Municipality for just under R28 million and, in 2019, the company sold that same erf for over R17 million less than it paid for the property.

The DA in the province has asked whether this made any business sense considering that prime property prices usually escalate annually.

However, according to the party, the logic seemingly unraveled when a third construction company then built on the land concerned after winning a tender from MEGA, which was then rented out to the agency for office use.

According to the lease agreement, the DA claim 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?” the party charged in a statement.

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Probe the tenders

The party said it has since written to the office of the Public Protector to investigate the suspected tender irregularities in the province.

According to the DA, it has also come to light that at least two other companies plan to invest over R120m rand into the project.

“One needs to question why would Company E, (Company C and Company D) invest a further R120 000 000 into a project where the return of the investment is only R185.6 million in 10 years? The DA strongly suspects that there is a Mpumalanga tender cartel which 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 party said.

MEGA’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.

The party said it was requesting the Public Protector to investigate this tender between MEGA and the suspected cartel of companies,

“If it is found that there are irregularities, this tender must set aside. The DA once again is calling for MEGA to be disbanded, as it is more evident that this entity is nothing more than a cash cow for the political connected,” the party added.