Inquiry into state capture hears why asbestos audit contract would not have been extended

The former head of the human settlements department in Gauteng, Margaret Diedericks, said she would not have agreed to extend the Gauteng asbestos audit project to the Free State had she known it was going to be a joint venture, the commission of inquiry into state capture heard on Wednesday.

This was revealed during the testimony of engineering consultancy firm Blackhead Consulting director Edwin Sodi before the commission’s chair, Deputy Chief Justice Raymond Zondo.

The multi-million rand contract was secured in 2014 by a joint venture between Sodi’s company and the late Ignatius “Igo” Mpambani’s Diamond Hill Trading 71.

According to evidence leader advocate Paul Pretorius SC, the former head of the human settlements department in the Free State, Nthimose “Tim” Mokhesi, wrote a letter to Diedericks, requesting that she extend the services of Blackhead to the Free State.

In a letter dated 4 August 2014, Diedericks approved Mokhesi’s request in line with a Treasury regulation for the Free State department to participate in the contract.

However, both Mokhesi and Sodi did not disclose to Diedericks it was to be a joint venture.

In her affidavit, which Pretorius read out, Diedericks said: “If the involvement of Diamond Hill were divulged to me, I would not have issued my letter dated 4 August 2014.

“At all relevant times, Diamond Hills was not on the Gauteng database. If the letter from the HOD (head of department) of the Free State applied for permission to appoint Blackhead-Diamond hill a joint venture, I would not have been able to give permission… because this joint venture was not a registered vendor in Gauteng.”

Pretorius said Sodi “deliberately” mentioned Blackhead Consulting, while he knew it was a joint venture that would be appointed in the Free State.

Responding, Sodi said, at the time, he thought that if one of the parties had done the work already, there was nothing wrong in not mentioning the joint venture.

The businessman also told the commission that, in Gauteng, his company was appointed to audit 250 000 units.

The company charged R650 per unit, he said.

He also said the cost per house was in the region of between R300 and R350 and the remaining amount was his profit.

“We audited 200 000 more than the scope given to us,” he said, adding that he did not overcharge the department.

“When we were appointed on this exercise, we were given a rate. None of us negotiated for the rate with the department.

“This was, as I said, a take it or leave it, and it was only after the project when we looked at the expenses to determine how much you would have made.”

Sodi also told the inquiry that training field workers only took a day, while the project took less than a six months to complete.

The hearing continues.

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