Mlaba and the tender ‘hijack’
March 14 2011 at 11:36am
By COLLEEN DARDAGAN
EThekwini mayor Obed Mlaba’s family link to a R3 billion alleged tender “hijack” in Durban has tensions running high at the city hall.
The tender is for the conversion of waste to energy at Durban’s Bisasar Road landfill which is expected to reach capacity within the next three years.
Mlaba was allegedly a “silent partner” in a firm identified as the preferred bidder for the tender, of which 20 percent was apparently owned by the Mlaba Family Trust. In a bizarre turn of events the tender, with Environmental Waste Solutions (EWS) as the preferred bidder, was allegedly “hijacked”.
The original majority shareholder, Durban businessman Richard Wardrop, appears to have been sidelined . A new company was formed with a similar name, called Own Environmental Waste Solutions (Pty) Ltd, with Mlaba’s two daughters among the directors.
The latest information comes at a time when Mlaba and city manager Michael Sutcliffe are at loggerheads over, among other things, the auditor-general’s annual report for the financial year ending June, 2010, as well as damning claims in the so-called Ngubane audit report, that has raised concerns about the city’s supply chain management process, amid calls for city officials’ heads.
With a mandate from the ANC, Mlaba has called for a full-scale forensic investigation into the city’s finances, although he has yet to announce which company will be spearheading the probe.
According to the auditor-general’s management report dated November, 2010, close family members of Mlaba and an unnamed senior city official have previously received three tenders from the city to the value of R88,31 million. The Mercury reported last year that one of Mlabla’s daughter, Thandeka, received two contracts for container toilets.
However, this is the first time Mlaba appears to have been directly linked to trying to do business with the city.
Sutcliffe would only say this weekend that “the root of the tensions are the (bid) investigations”, but declined to elaborate further.
In his reaction, Mlaba denied there was any tension between himself and Sutcliffe.
After being questioned about his alleged interest in the Bisasar Road project, Mlaba declined to make further comment and withdrew an earlier statement, saying: “Bring all the documents you have to me and I will respond to your questions properly. I don’t deal in tensions, I deal in principles.”
At the heart of the latest extraordinary tale to rock eThekwini is the city’s call for the Bisasar project early in 2008.
Three companies were shortlisted as preferred bidders: EWS (Environmental Waste Solutions); the Durban-based Re-ethical Environmental Re-engineering (commonly known as re-) and the JSE-listed Interwaste Holdings.
EWS was the trading name given to a shelf company bought by Wardrop for the project.
“Sixty percent of the company belonged to me, 20 percent to the Obed Mlaba Family Trust – Obed was one of our silent partners – and 20 percent to Bheki Mtolo, who was introduced to me by Mlaba,” Wardrop told The Mercury.
“I was told the way they had done it was all above board and straight. Obed told everybody that after his retirement ‘this is what I am going to do; this is my hobby’.”
However, Wardrop claims that, unbeknown to him, a local estate agent, Leon Boshoff, whom he befriended when buying a house in Durban, allegedly muscled in on the bid without his knowledge.
Boshoff, together with the mayor’s daughters, Thandeka and Thabiso, among others, then registered a second company called Our Environmental Waste Solutions (Pty) Ltd. This is confirmed by a company search of the Cipro database, which gives the registration date as November 26, 2009. However, both Boshoff and Thandeka Mlaba resigned as directors the day after the company was registered. Thabiso Mlaba remains listed among the directors.
Wardrop also claims that Boshoff represented himself to the city as a director of the original EWS company
“Boshoff told everyone I had been sacked. EWS was my company; how could I be sacked?” said Wardrop.
Meanwhile, Boshoff also approached re-, the company that was expected to win the bid, to set up a partnership for the lucrative job. This was confirmed to The Mercury by Tadek Tomaszewski, the managing director of re-.
On November 30, 2009, Obed Mlaba chaired a meeting with Tomaszewski and also asked for a partnership deal.
“I offered them a 50/50 partnership, but Mtolo said 60/40. Ten percent, he said, had to go to the ANC,” Tomaszewski said.
During the meeting Mlaba referred to the project as “his retirement plan”, Tomaszewski said.
Despite repeated and documented misgivings expressed by DSW officials and a French Development Bank expert, EWS was nevertheless identified as the preferred bidder.
In an earlier report to the bid evaluation committee, DSW’s John Parkin expressed concern about EWS’s submission.
“It is clear EWS has not been totally forthcoming in its communications thus far. In the proposal claims are made that cannot be substantiated or have been shown to be not true.
“It must be of further concern that the company that we originally were corresponding with has now changed and we are receiving correspondence from a company with a completely different letterhead,” he wrote.
On February 23, 2010, Sutcliffe nevertheless gave the authority for DSW to negotiate with EWS as the preferred bidder.
The confirmation letter two days later from DSW’s Raymond Rampersad is addressed to Leon Boshoff of EWS (Pty) Ltd.
Wardrop said he found out about the award by chance and immediately wrote to Rampersad to thank him.
But two days later Wardrop received a letter from a lawyer acting for Our Environmental Waste Solutions (Pty) Ltd threatening him with legal action if he continued to communicate with the municipality about the project.
“I didn’t know what was going on,” he said.
In an e-mail dated March 17, 2010 to Rampersad, copied to Sutcliffe, Wardrop announced his company was withdrawing its bid.
In a letter to Wardrop dated April 8, Sutcliffe asked to meet him “urgently and “confidentially”.
In a further e-mail on September 6, Wardrop asked Sutcliffe about a “forensic” audit which he had allegedly promised at the April meeting.
Responding to Wardrop’s inquiry, Sutcliffe blamed the World Cup for the delays, “but I believe it is in the pipeline”, he said.
In his comment to The Mercury, Sutcliffe said: “The tender process is not concluded. The preferred bidder was identified, but the tender process hasn’t been signed off.”
Boshoff and Thandeka Mlaba referred The Mercury to their lawyer, Andile Khoza, at Strauss Daly, who said he would not comment until he had seen all the documents in the newspaper’s possession.
Asked about his family’s tenders with the city, Mlaba said: “I have no response because I am not the one that awards tenders.”
Mlaba did not respond to questions by phone or an SMS from The Mercury about his alleged involvement with EWS. – The Mercury
http://www.iol.co.za/news/south-africa/kwazulu-natal/r3b-tender-mlaba-quiet-1.1041856
R3b tender: Mlaba ‘quiet’
March 15 2011 at 10:03am
By COLLEEN DARDAGAN
EThekwini mayor Obed Mlaba has again declined to comment on the latest scandal to hit the city hall, namely his alleged family link to a R3 billion tender “hijack”.
On Monday, The Mercury revealed that Mlaba was an alleged “silent” partner in a firm, Environmental Waste Solutions (EWS), which was controversially identified by the city as the preferred bidder for a tender to convert waste to energy at the Bisasar Road landfill.
EWS’s majority shareholder was Durban businessman Richard Wardrop, who appears to have been muscled out of the proposed deal by some of his minority shareholders, who included Mlaba’s daughters, Thandeka and Thabiso.
The Mlaba daughters and others, including local estate agent Leon Boshoff, formed a new company with a similar name, Own Environmental Waste Solutions (Pty) Ltd. It is this company that apparently “hijacked” the original bid involving Wardrop.
Deputy city manager Derek Naidoo, who heads the bid adjudication, could not say whether or not an investigation would be launched or the bid process would be halted.
“That’s not for me to decide. That’s for the committee to decide. Obviously we will take cognisance of what is in the media, but we will also have to look at all the contractual issues.”
Naidoo said the committee would meet within 10 days, but it all depended on whether or not the “matter was ready for the committee”.
Co-operative Governance and Traditional Affairs spokesman Lennox Mabaso said: “At this stage we can’t say anything. The minister will make a statement during the week.”
The IFP’s Bonga Mdletshe called on the provincial government to investigate. “We will be interested to see if the latest twist in the saga, namely the reported link between eThekwini mayor Obed Mlaba and a flawed R3bn tender, will at last elicit a meaningful response from the Department of Co-operative Governance and Traditional Affairs.”
DA caucus leader Tex Collins said if allegations published in The Mercury were correct those concerned should be “brought to account”.
EWS was the trading name given to a shelf company bought by Wardrop for the project. He told The Mercury he owned 60 percent, while 20 percent was owned by the Mlaba Family Trust – with the mayor allegedly one of the silent partners – and 20 percent belonged to Bheki Mtolo.
EWS was named preferred bidder despite a report from a technical specialist at Durban’s waste unit, expressing concern over its ability to deliver on the project.
The official, John Parkin, also expressed concern that the company the city was originally corresponding with had changed “and we are receiving correspondence from a company with a completely different letterhead”.
According to specialist reports to the bid adjudication committee, another Durban-based company, Re-Ethical (commonly known as re-) was, in fact, the only company which had submitted a proper proposal, and should be awarded the bid.
That company’s MD, Tadek Tomaszewski, told The Mercury that a meeting had been chaired by Mlaba on November 30, 2009, in which the mayor had asked for a partnership deal.
During that meeting Mlaba had referred to the project “as his retirement plan”, he said.
According to documents in The Mercury’s possession, on February 23 last year, city manager Michael Sutcliffe gave DSW the authority to negotiate with EWS as the preferred bidder.
The confirmation letter, two days later, from DWS’s Raymond Rampersad, was addressed to Leon Boshoff of EWS (Pty) Ltd.
Andile Khoza, the lawyer for Boshoff and Thandeka Mlaba, did not return calls on Monday. – The Mercury