Daily News: R40m housing scandal

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R40m housing scandal
March 31 2010

The technically insolvent government housing agency,
Thubelisha Homes, is facing another scandal, involving
corruption to the tune of more than R40-million in northern Zululand.

Only 140 homes were built in a project aimed at 3 300 low-cost houses in Ingwavuma and a draft report leaked to the Daily News paints a shocking picture of fraud, funds deposited into personal accounts and overpayments on the project amounting to about R150-million.

Thubelisha’s most famous failure to deliver on its housing mandate so far is the N2 Gateway Project in Cape Town, initially touted as an exciting project to replace the eyesore shacks parallel to the highway greeting tourists landing at Cape Town International.

But an auditor-general’s report to Parliament last year found that the project had not been managed economically or effectively.

According to Thubelisha Homes, the company completed only 140 houses out of its mandate of 3 300 in Ingwavuma.

Company secretary, Mano Pillay, acknowledged the failings of the government housing agency, adding that that they were, however, able to account for every cent.

“We failed miserably in KwaZulu-Natal, but we were the ones to request an investigation after we suspected irregularities with our staff,” he told the Daily News.

The provincial general manager on project development, Jeffrey Nxumalo, said: “I am aware of the report which was an audit done by an internal unit of the Department of Human Settlements. I can only say it is yet to be finalised and referred to the national government,” he said.

Some of the conclusions in the report include an amount of about R21-million spent on agreements not sanctioned by the department; weak internal controls which led to cash being deposited into personal accounts; payments made to service providers for work not yet completed; and an overpayment of about R172 000.

The 36-page report is just one of many national investigations into housing projects by Thubelisha Homes, whose CEO is John Duarte, former husband of Jessie Duarte, President Jacob Zuma’s chief operationing officer.

“This project in Kwazulu-Natal started in 2006, before I took over, and in January last year I fired our project manager on this contract because we unravelled irregularities.

“We then alerted the authorities and requested that an investigation take place,” he said.

Duarte has resigned from his position and is among the agency’s management staff expected to leave office at the end of this month, when it is wound up.

Thubelisha Homes received a R241,5m bailout from the government last March to shut down operations nationally, with many of its staff already absorbed into the government’s Housing Development Agency, given the task of taking over all projects involving Thubelisha Homes.

The DA’s housing spokesman, George Mari, wants some answers from Human Settlement MEC Maggie Govender over the project.

“The DA is extremely concerned at yet another failed housing project which once again points to insufficient planning and proper tender processes being followed.

“We need to know whether Thubelisha will be brought to account for all the irregular payments made.

“The MEC has also announced that R650-million will be required to repair and rebuild defective houses due to shoddy workmanship,” said Mari.

* This article was originally published on page 1 of Daily News on March 31, 2010