Premium Journalist
4 minute read
17 Sep 2015
2:49 pm

‘R90m spent on Centurion Aerospace Village, nothing on site’


Centurion Aerospace Village (CAV) was launched in 2008, but there remains no commercial activity nor any of the about 1 000 promised jobs on site with more than R90 million spent in the project.

An architects mock-up of Centurion Aerospace Village | Picture: Wilkinson Architects

Such is the word of Democratic Alliance MP Patrick Atkinson as he spoke to reporters outside the CAV perimeter fence, just south of Pretoria.

“I first became aware of the CAV after a parliamentary oversight visit to Aerosud, a privately owned aircraft components manufacturer, in January, where Members of Parliament were told about the adjacent Centurion Aerospace Village that the Department of Trade and Industry has been promising to create,” Atkinson said.

“I then submitted a parliamentary question to the Minister of Trade and Industry, Rob Davies, asking the annual breakdown of the costs of establishing the CAV since its inception. The figure totalled R95 002 million,” he said.

“I submitted a further parliamentary question asking the minister who the first so-called tenant was that allegedly moved in to the village in January 2012. He responded by saying Aerosud. A senior executive at Aerosud denied such a claim.”

Atkinson said he gathered that Aerosud has owned the land adjacent to the CAV for the past 15 years and does not form part of the village.

He said the minister’s parliamentary reply revealed the existence of a DTI (department of trade and industry) mandated forensic report, following an investigation by private company Nexus into the financial and administrative irregularities at the CAV.

“After an application in terms of the Promotion of Access to Information Act, the DA was furnished with a heavily redacted (blacked-out) and censored forensic report. Despite efforts by the DTI to erase the names of implicated companies, contractors, and department officials, the report still finds maladministration and unauthorized expenditure running into the millions [of rands] under the DTI’s watch,” said Atkinson.

“The report, which is dated June 18, 2014, makes an array of damning findings ranging from financial irregularities to possible tender fraud and corruption. The report also makes recommendations that both CAV and government officials be held civilly, and in at least one instance, criminally liable.”

The opposition party MP said some of the “most egregious” findings in the Nexus report includes alleged reckless tender appointments. The report recommends fraud and corruption charges are instituted against those responsible.

“The forensic report makes several damning findings, including a R65 million tender for bulk earthworks and infrastructure being irregularly awarded as 10 of the 11 bidders were disqualified for spurious reasons,” said Atkinson.

“The report states the reasons for disqualification of other tenderers (10 of the 11) will ‘not withstand scrutiny if challenged in a court of law in terms of the Promotion of Administrative Justice Act (PAJA)’.”

He said the disqualifications border on “reckless behaviour”, and the report recommends the contract be “immediately rescinded”, said Atkinson, adding Nexus had also questioned the appointment of CAV service providers in its report.

“The (Nexus) investigation could not locate approval by any of the three decision-making bodies of the CAV – the board, the EXCOM (executive committee), or management – for the appointment of five service providers to the approximate value of R84,998,950. It was found that the CAV was in contravention of section 12.4 of the MOU [memorandum of understanding] it signed with the DTI as it could not provide invoices or cheque stubs for a total amount of R 642,698.82.”

“In other words, this expenditure cannot be accounted for. The report recommends that the DTI recovers the unaccounted amount of R642,698.82 from the CAV,” said Atkinson.

He said the report found a reasonable suspicion of fraud and corruption with regard to expenditure on catering to the value of R1,142,177.02.

“It was recommended that in terms of section 34 of the Prevention and Combating of Corrupt Activities Act, the DTI has a legal duty to report this to the South African Police Service (SAPS),” said Atkinson.

From outside the perimeter fence, the vast, fenced CAV land looks abandoned, but for a sun-baked billboard reading: “Welcome to Centurion Aerospace Village”. There is evidence of some earthworks on the land. There was no activity within the fence.

The multimillion aerospace village was launched in 2008 by then Minister of Trade and Industry Mandisi Mpahlwa.

“This will allow for small companies to now be located around primary suppliers such as Denel and Aerosud and a lean supply chain to be established resulting in a cluster focused on aerostructure manufacturing,” Mpahlwa said at the time.

The development of the village was meant to create 1500 jobs for local people.

“Not only will a significant number of jobs be created, but also the integration of small companies into the industry will be advanced significantly,” Mphahlwa had said.

The CAV was designed to unlock the growth potential of the aerospace and aviation industries in the country.

The CAV development was supported financially by the European Union and the South African government through the sector-wide support enterprise, employment and equity programme (Sweeep), and the fiscus, respectively.