Response by the department to Mathatha Tsedu's OPEN LETTER
The Department of Roads and Transport in Limpopo is astounded by the extraordinary attack by Mathatha Tsedu, the former editor-in-chief of City Press and now head of the News24 Journalism Academy. Tsedu wrote an open letter to President Jacob Zuma published by Fin24, News24’s business website, on November 29 in which he made wild and unfounded allegations against the department and its leadership.
The department is of the view that Tsedu’s misguided letter is deeply offensive and cannot be left unchallenged.
In his letter, Tsedu makes the following claims:
• That the country is “witnessing the decimation” of the Roads Agency Limpopo (RAL), an agency of the department. He claims that this was because MEC for Roads and Transport Pinky Kekana had appointed her own Board of Directors at RAL “in an effort to control the tender process”. This is allegation false and without any substance.
• Without providing any evidence to back up his defamatory statement, Tsedu also suggests that “it is clear to anyone watching that the next step is to scrap RAL and take its budget to the department where political heads would be able to determine its dispersal”. This allegation is also not true. There is no decision or discussion by Government to scrap RAL.
• In his open letter, Tsedu argues that President Zuma should intervene in the affairs of the department in order to prove that he is committed to fighting corruption.Tsedu argues that the basis for such intervention is that “one of the latest board decisions was to advertise a tender with a one day deadline for submission”. This allegation is false and outright malicious. The new RAL Board has not advertised a single tender since taking office three months ago.
• Another of Tsedu’s claims is that the first task of the new Board was to remove the former CEO of RAL, Bohani Shibambu. This allegation is also false. Shibambu himself has stated that he resigned voluntarily to pursue other interests.
The Correct Facts
Tsedu correctly suggests that there should be an investigation into “RAL’s shenanigans”. Although Tsedu does not provide any basis for proposing such an investigation, we agree that there is indeed a need to look into some issues at RAL. The Chairman of the RAL Board Mr Sello Rasethaba has indicated that he is consulting with the Board to consider a forensic investigation into the affairs of RAL due to the weight of the evidence of irregularities at the agency.
The investigation will have to answer the following key issues:
• How road infrastructure tenders worth more than R100-million were awarded to companies owned by members of the previous Board;
• How former Board members were appointed as consultants for RAL on road construction tenders;
• How RAL management were awarded excessive salary increases of between 78% and 94% by the previous Board in October last year.
• Why it was necessary to increase the salary of the former CEO by 62% to R1,7-million when RAL relies on a government grant and generates a miniscule revenue of less than R1-million. For Tsedu’s information a messager and cleaner at RAL earns annual salary of R216 000 and R127 000 respectively, which is even higher than professionals such as teachers and nurses.
• Some senior managers received salary increases of well over 100%. Whether the excessive salaries where benchmarked with other agencies of similar size. An analysis shows that the salaries of RAL senior management and CEO are much higher than that of the CEO of the South African National Roads Agency (SANRAL), an agency whose work is unsurpassed in South Africa.
• Why management paid itself performance bonuses without being subjected to a performance assessment;
• How a R90-million tender was awarded to a former RAL employee two months after he had resigned from the agency. Why the said former employee was paid R10-million by the agency despite having failed to deliver the services;
• Why road infrastructure projects for Vleifontein to Bandelierkop, which were originally budgeted for R36-million, suddenly jumped to R62million with no clear and reasonable case being made; and
• Why RAL is facing lawsuits amounting R30-million?
Preliminary investigations into RAL’s affairs suggest very strongly that tenders may have been manipulated by some within the agency to favour a few companies.Our analysis shows that a total of seven companies between them got 90% of road infrastructure projects in the past two financial years.
The pattern of questionable deals points to a collapse or weakness of governance structures at RAL under the previous Board. The department is confident that efforts of the new Board will strengthen oversight of the work of the entity.Of course, Mr Tsedu the Board accounts to the MEC responsible not by choice but by law. Simply put, failure to act will amount to dereliction of our duties.
For your information Mr Tsedu we do not need your permission or your advice to exercise our responsibility. In fact, we will without fear remain undeterred and focused in raising questions even in an entity that received “a clean audit report”, which is based on a sample.
It appears to us that Tsedu’s open letter to President Zuma is part of an earlier campaign which was waged in City Press to try and discredit MEC Kekana’s efforts to transform RAL. The City Press campaign failed and Tsedu’s letter will also fail. We will not abandon our firm commitment to turnaround RAL despite these calculated efforts by Tsedu and his former newspaper. We will remain focused on the real issues.
We are however not surprised about Tsedu’s sudden interest in the affairs of RAL. After all, Tsedu’s brother-in-law works for RAL.In this context, we feel that we are entitled to ask whether the veteran-journalist-turned-lecturer is not in fact trying to protect certain vested interests in RAL. Was he perhaps also part of the failed attempt by City Press to project our efforts to transform RAL as self-enrichment? City Press, like Tsedu, has not provided any shred of evidence to suggest that MEC Kekana has personal interest in RAL projects. Yet Tsedu feels confident enough to advise President Zuma in an open letter to look to City Press articles for answers on the challenges facing RAL.
As the sole shareholder of RAL, MEC Kekana will not be deterred by anyone, including Tsedu, in her efforts to transform RAL so that it responds to the needs of our people.
Broken Development Model
RAL accounts for almost half of the total budget allocation of the department. Of the R2,89-billion, close to a billion Rand is allocated to RAL. The department has an interest in how the huge allocation is spent.
Hard and difficult questions will have to be asked. We will ask whether as Government we are deriving value for the money we invest in RAL. We cannot accept that 1km road should cost us R10-million while other provinces are paying considerably less than that.
In 2006, RAL records shows that the agency paid an average of R5,5-million for 1KM of mountainous road. This cost rocketed to R11,5-million the following year. Does this respresent the “sterling work, both in the improvement of roads and in ensuring that tenders are handled appropriately” as Mr Tsedu would like the public to believe?
And we are told that we can only tar 3 000km of gravel roads in 26 years! In the current financial year, of the R897-million allocated to RAL by government, only 150KM gravel roads will be tarred.
This is based on the model which had been implemented by the previous Board, which has the support of Tsedu and his ilk. If we continue implementing this broken model, our province is likely to tar a mere 3 000KM in 26 years.
This when we have a backlog of 15 630KM. These are some of the real issues on which MEC Kekana engaged the previous Board. MEC Kekana has made it clear that tarring 3000KM in 26 years due in part to excessive pricing cannot be accepted.
This is a chameleon speed that has to be rejected out of hand. The previous Board was not forced to resign as Tsedu and City Press would like the public to believe. They all resigned voluntarily. The new Board has been challenged by MEC Kekana to examine the current development model.
Broad-Based Black Economic Empowerment
Added to this is the issue of broad based black economic empowerment. Our people did not vote overwhelmingly for the ANC to be told that only a select few companies are the only ones capable to build roads. Projects cannot continue to circulate within a small group of companies.
Our analysis of 2007/08 and 2008/09 financial years shows that more than 90% of RAL’s work went to seven big companies. One of these companies got tenders worth R440-million from RAL within two years.
Issues of genuine B-BBEE are on our radar screen, not the self-enrichment suggested by Tsedu and his ilk, which is punching above its weight.
We have a duty as government to grow and build the civil construction industry in the province. We cannot continue to say that, 15 years into democracy, our people have no capacity when we have the wherewithal to ensure capacity building. We have a commitment to our people to improve their living conditions and spread meaningful work to a greater pool of emerging companies.
The delivery of roads projects must also be aligned to even unbundling the work to ensure that many people benefit especially women and the youth. Under the previous Board very little was being done on the labour intensive programme of Government, the Extended Public Works Programme (EPWP). Less than 1% or R5-million of the R897-million budget for road infrastructure went to EPWP. Mr Tsedu and his ilk must explain to us how underfunding for EPWP will assist Government to ensure the provision of much needed employment in the country.
Focus on strategic priorities
The province has to focus on its growth points. Limpopo province is particularly rich in platinum which is found in the south east (Sekhukhune), copper mainly in the east and north (Phalaborwa and Musina) and large deposits of coal in the Lephalale as well as tourism potential in the Bushveld.
Agriculture is also the mainstay of the provincial economy in many districts and that must be supported as well. Our province needs links between these areas and towns in the form of roads to transport mining and agriculture goods and also to get out people from point A to B.
There is a need to reconstruct R33 from Modimolle to Lephalale to accommodate huge trucks that will be transporting mining equipment. If we do nothing about this, this strategic road network will be finished in no time.
Why we had to act on RAL
We had to take decisive action to transform RAL in order to ensure that we fast track the process of realigning our roads infrastructure projects to the priorities of the ruling party. The problem with the former Board included the following:
• It had no performance agreement; and
• It had no shareholder’s compact to regulate the relationship itself and government.
It is political parties that contest elections. You may not like the policies of the ANC Mr Tsedu but the ruling party has been given an overwhelming mandate to govern this province. RAL, as an implementing agent, has to align its priorities with that of the ruling party.
Dawn of New Era
MEC Kekana is pleased that the new Board has opened a new chapter on good governance.MEC Kekana recently approved RAL’s business plan, which is geared towards the Provincial Employment Growth and Development Plan. The plan has identified agriculture, mining and tourism as key pillars of our provincial economy supported by efficient logistics hubs.
Through roads development, we have a duty to prioritise and support those industries that will enable the growth of our economy. Shareholder approval of RAL’s business plan and regular reporting on performance are non-negotiables. Those instruments are aimed at ensuring that principles of transparency and accountability can be met in a manner that is understood and is acceptable. MEC Kekana will continue to exercise the necessary oversight on RAL. As the ANC-led government we have committed to responding dynamically to the huge expectations of the communities who have entrusted us with the mandate to lead once again.
Without an improvement in the quality of life of the majority of South Africans, the political conditions for growth will not exist, and without growth the economic conditions for improved quality of life cannot be created.
Ours is to ensure:
• That transport services are safe, reliable, affordable and sustainable;
• That we reduce travel times and cost of doing business;
• That we implement policies that co-ordinate public and private sector investment in the transport sector; and
• That transport infrastructure and services meet investment, economic and social demands of our people.
MEC Kekana believes that the new board is bringing with it a combination of skills and experience which will certainly propel RAL to greater heights. Their role as a Board will not be an easy one given Government and the people of Limpopo’s expectations for RAL to accelerate the process of service delivery to bring a better life to our people.
Issued by the Department of Roads and Transport
For more information Contact: Wisani Ngobeni 082 902 1361