The probe into Limpopo’s finances has thrown implicated businessmen, politicians and civil servants into a panic mode. Piet Rampedi reports.
|||The Limpopo government instructed provincial departments to allocate more money to infrastructure development projects, which benefited mostly companies linked to Premier Cassel Mathale and suspended ANC Youth Leader Julius Malema, insiders said.
The Sunday Independent was told by three senior civil servants and two ANC leaders this week that they were ordered by the premier’s office at the last two provincial cabinet lekgotla meetings to prioritise infrastructure spending or divert funds from operational costs if need be.
The departments were required to furnish the premier’s office with annual infrastructure development plans containing a list of tenders to be issued, areas, and their value, they added.
The bulk of the multi-million-rand tenders were eventually awarded to companies owned by well-connected businessmen, including On-Point Engineers and SGL Engineering Projects – previously or currently owned by Malema and his Ratanang Family Trust.
Payment schedules were also changed from 30 days to twice a week, which is against National Treasury regulations, in order to fast-track cash-flow to certain companies. Officials who dared stand in the way of powerful leaders were needlessly paid huge amounts to leave their posts.
Finance Minister Pravin Gordhan confirmed these developments at a media briefing in Polokwane on Thursday, adding that Limpopo was “technically bankrupt” after being plunged into a R2 billion cash-flow crisis.
He said fraudulently awarded tenders, inflated prices for goods and possible illegal payments to service providers had caused the unprecedented crisis. An unauthorised expenditure that ballooned from R1.5bn in 2009 to R2.7bn last year compounded the problem.
A lion’s share of the squandered taxpayers’ money is thought to be lying in family trust accounts, personal and business accounts of businessmen associated with Malema and Mathale.
Some of the money is believed to have been used to buy cars, property or for partying.
The elite investigative unit, the Hawks, Sars and Public Protector Thuli Madonsela are probing alleged tender irregularities – including fraud and corruption – in Limpopo. The investigation touches Malema and a network of his key allies, including Mathale. They are accused of widespread looting of multi-million-rand contracts to bankroll their lavish lifestyles and buy political patronage.
The reprioritisation of funds left departments with very little money to implement the Occupational Specific Dispensation (OSD), adjust salaries, fill vacant posts and cover operational costs such as travelling, telephones and accommodation, according to the sources.
Some official cars have since been grounded and landlines restricted.
Sources said the provincial government justified the decision by saying investing in infrastructure was necessary if Limpopo wanted to develop as fast as China, Dubai and Brazil.
“The plan sounded noble because we would be planning ahead. But these guys then planted companies on the other side, which then benefited from infrastructure tenders. Eventually the contracts went to companies owned by their people, your On-Point, SGL and others.
“As a result, certain government projects would suffer because, for example, when national (government) said ‘implement OSD’, you find that the money that was supposed to be used for that had already been shifted to infrastructure,” said a senior bureaucrat.
Gordhan said a forensic probe would begin immediately, with World Cup-style courts in place to fast-track the wheels of justice.
“We cannot make any firm statement that there is corruption. We have forensic investigators who will start their work this week. We have courts ready. If we find that there is a case that has to be answered with the law, they will have to answer the case whether they are in government or outside government,” said Gordhan.
Vowing that the cabinet would not “sit there” and be an “object of derision”, Gordhan hit back days after ANC treasurer Mathews Phosa – who is close to Malema and Mathale – told a Limpopo party meeting in Sekhukhune last weekend that Mathale’s powers had been “stolen”.
Phosa added: “I understand comrade chairperson that in your capacity as premier, some of your powers have been stolen. It is a serious problem. We need to know as the leadership of the ANC the impact of a provincial government with less powers… on service delivery.
“If you have half power you have no power. You must understand that so that if there are problems, we must solve them and move on to strengthen this province.”
President Jacob Zuma, through the cabinet, placed five key Limpopo provincial government departments under administration on December 5.
They are the departments of Treasury, Education, Health, Public Works and Roads and Transport.
This came after City Press reported that Limpopo had exhausted its operational budget three months into the 2011/2012 financial year. The province had an annual budget of R43bn.
The Sunday Independent was told that Gordhan’s briefing had thrown implicated businessmen, politicians and civil servants into a panic mode. The move is likely to cost many business and political careers.
A source who was briefed by Malema’s business associates said they were working on a fight-back plan, especially those without supporting documents to justify payments.
Flanked by members of a joint ministerial task team, which included five ministers, Gordhan said Limpopo had 2 400 excess teachers and 200 ghost teachers on its payroll and an accrual of R500 million.
Accruals refer to invoices left for payment in the next financial year, usually done to hide over-expenditure from the Auditor General. Following reports that some hospitals had run out of food, Gordhan accused unnamed people within the provincial government of telling service providers to withhold services in order to create an impression the intervention had worsened the situation in Limpopo.
“It is unacceptable to use defenceless people like hospital patients by depriving them of food in order to defend our political base,” said Gordhan, adding law enforcement agencies would act “fairly shortly”.
The ANC Youth League in Limpopo dismissed allegations of sabotage as “unfounded”, adding that the intervention had paralysed service delivery in the province.
Limpopo government spokesman Tebatso Mabitsela referred enquiries to provincial Treasury MEC David Masondo’s spokeswoman, Nokubongwa Mdlalose, who referred The Sunday Independent back to Gordhan.
Mathale has consistently said he “accepted” the intervention and denied any wrong-doing.
He maintained that the overdraft dated back to 2000, adding that funds used to implement OSD as instructed by the national government caused the crisis.
After Gordhan’s media briefing, Mathale told the e-News channel that “we cannot allow individuals either in the executive or the administration who go around sabotaging the process. There is no way I am putting my head in the sand and saying, ‘I am not co-operating with minister Gordhan’, we need to work together to address these issues”. - Sunday Independent