State capture: Mosebenzi Zwane explains ‘strange’ tender process

Former Free State Human Settlements MEC Mosebenzi Zwane on Monday spent more than two hours trying to explain why he approved a list of contractors which included disqualified bidders, and some who had not tendered at all, in the billion rand housing project.

At some point, evidence leader advocate Paul Pretorius SC said his evidence raised more questions than answers.

Zwane was testifying for second time before the commission on Monday.

The commission has heard that while an open tender process was underway, Zwane still took a different list of contractors to exco for approval.

“That is very strange,” Deputy Chief Justice Raymond Zondo who chairs the commission said.

Between 16 April and 28 July 2010 there was an open tender process underway under Zwane’s instructions.

However, on 30 June, in the midst of a tender process, Zwane went to get approval from exco with a different list of contractors, the commission has heard.

Zwane told Zondo that the open tender process was going to be used to create a database which would be used for five years.

However, that process, as Pretorius put it, “ultimately died an unnatural death”, because it was cancelled due to the tender bid evaluation period having expired.

Pretorius said: “It is clear from Treasury regulations under the Public Finance Management Act [PFMA] that for contracts of this size, you can’t just appoint. It has to go through a process… it can’t work like that Mr Zwane. That’s the law, you know the PFMA and the regulations under the PFMA.”

“It seems to me that the only explanation is that the MEC together with exco had their own plan of who was going to construct houses and [on] what basis they would be selected,” Pretorius said.

But Zwane said when he arrived at the department, there was already a list which was used in 2009 and 2010, adding he did not create the list.

He also said the list was going to be used in 2010 and 2011, until there was a dispute with contractors after former Free State Premier Ace Magashule said there would be bigger houses, but the money for the project remained the same.

“Then there was a need to begin to follow the process that would actually give us a new list,” Zwane said.

List

During the testimony of former human settlement boss Mpho Mokoena, he said Zwane approached him with a list of about 106 contractors and instructed him to appoint them.

Mokoena said some of the contractors had never been used by the department previously.

He also said he remembered asking Zwane why they were allocating contracts to contractors they did not know.

“The MEC was, however, adamant that these were the contractors we should use,” Mokoena said at the time.

In 2010 and 2011, Free State people were promised houses, however, many of those houses were never built, leaving some people’s hopes dashed.

The inquiry has heard that the department spent over R500 million before any work had be done.

The evidence revealed that the housing department made payments to contractors and suppliers without any proof that houses had been built.

It also heard that Zwane selected who should be part of the project, resulting in the department losing over R400 million.

The money was spent after the national department threatened to transfer some of the Free State housing budget to “better performing provinces”.

The Free State had underspent the money allocated to it.

However, a scheme was allegedly devised by Zwane for the money to be spent which led to more than 100 contractors getting an advance payment before anything could be done.

There was no procurement process in respect of the contractors and the parties who supplied materials.

The hearing continues.

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