The Gauteng government is battling to contain the fallout from a controversial and unlawful R25‑million prepayment for motorised three-wheelers that were never delivered by a company associated with ANC spokesperson Pule Mabe.
The company, Enviro Mobi, is embroiled in a war of words with the Gauteng department of agriculture, environment and rural development. The disagreement relates to a contract to provide waste pickers (informal recyclers) with motorised bicycles that the department wants to pull out of.
But instead of giving in to the department’s demands to cancel the contract, the company made its own demand — for R9‑million for storing the vehicles since September.
This comes after the department threatened to terminate its contract, which was found by the provincial treasury to be unlawful.
The department is also under pressure from the office of the auditor general, which has declared the entire payment a prepayment — something prohibited in the contract.
Enviro Mobi is the company for which Mabe declared himself to be a director on his MP’s declaration of interests form in 2016. It is now run by his cousin, Eulender Rakoma, and business associate Tinyiko Mahuntsi. Mabe has said that he resigned from Enviro Mobi in 2014.
The two directors have recently been implicated in another irregular multimillion-rand contract for laundry and dry-cleaning services awarded by the North West Development Corporation, allegedly scoring R49‑million without delivering any services.
Companies linked to Mabe featured prominently in the multi-million-rand service-level agreement signed between Mvest Trust and the corporation.
The corporation is investigating the North West contract, because it was not awarded through proper procurement processes.
The Mail & Guardian has now established that Enviro Mobi was hastily paid R16‑million just 10 days after it signed the contract on March 14 2017 with the Gauteng environmental department — despite a clear directive in the service contract that there would be no prepayments.
Further payments of R9.4‑million and R1.6‑million were made last October and in March this year. But Enviro Mobi did not deliver the three-wheeler motorbikes or tuk-tuks.
Mabe has previously stated that these three-wheelers, a pet project of his that he called “karikis”, are his invention and would help in the government’s waste management programme.
These vehicles, which were showcased during a project launch attended by Gauteng Premier David Makhura in Tembisa last September, were meant to be used by 65 co-operatives to deliver waste to recycling centres in Gauteng.
The three-year project, which was meant to empower and employ waste pickers, who usually pull heavy loads of recyclable material, has raised a stink in the department because only three of the 200 vehicles that were ordered are on the streets.
This was meant to be the pilot project for a much larger rollout to municipalities across the province.
The M&G understands that the vehicles were never delivered and there are contradicting versions of what happened.
According to the department’s official response, Enviro Mobi was paid R16‑million, and then R9.4‑million for fleet acquisition and R1.6‑million for fleet management. But the department’s internal audit report and the provincial treasury paint a different picture of no services being rendered and no fleet being delivered.
“It was noted that Enviro Mobi was paid over R25‑million … for goods or services which were not delivered to the department,” said the audit report. “Furthermore, when internal audit went on a site visit at the manufacturers’ premises [in March and April 2018], we noted that only 50 fleets of ‘tuk-tuk’ were completed out of a total of 200 and therefore were not ready for delivery, although they were already paid [for].”
The department, responding to the M&G’s inquiries, claimed that the fleet was in safe storage. “It was discovered [after the launch] that the co-operatives did not have capacity to keep [the] fleet safe [after] the launch and the pilot phase,” said departmental spokesperson Nozipho Hlabanga.
But pictures seen by the M&G, which form part of the audit report, show incomplete and vandalised tuk-tuks abandoned in the Krugersdorp factory where they are supposedly assembled. The provincial treasury deemed the contract irregular because Enviro Mobi had not provided the mandatory costing for the three-year period of the project, and the department had not budgeted for years two and three.
According to the contract signed between the department and Mahuntsi on behalf of Enviro Mobi, invoices had to detail work done before any payments could be made.
This has raised questions in the department about how Enviro Mobi was paid for work that had not been done, forcing the department in March to issue Enviro Mobi with a letter of intention to terminate the contract and recover the money that had been paid to the company.
Enviro Mobi has challenged the department on its intention to cancel the contract and blamed it for not taking delivery of the tuk-tuks.
In its letter of demand, Enviro Mobi stated that terminating the contract was unlawful and that it had rendered services but the department failed to collect its fleet of tuk-tuks.
“Enviro Mobi has, in compliance with its obligations in terms of the SLA [service-level agreement], assembled and made available for the taking of delivery/collection by [the department] of 200 three-wheeler motorised vehicles at its site in Krugersdorp, Johannesburg, since June 2017.”
In the letter of demand, drafted by Mkhabela Huntley Attorneys on May 4, Enviro Mobi says the department should also pay a further R9.7‑million for fleet management.
This week, Mahuntsi said the matter had become a court issue between Enviro Mobi and the department.
“The dispute has become litigious and I am no longer at liberty to talk freely about it,” said Mahuntsi, referring further questions to his lawyers.
Mabe had not responded to requests for comment by the time of going to print.