The Congress of SA Trade Unions is concerned “tenderpreneurs” are corrupting South Africa’s political system and warns the country could become a “predatory state” similar to Nigeria should the practice not be curbed.
“The stories of the recent weeks beg the question as to whether our stance that public representatives should not be involved in business because of inherent contradictions of interests should not be extended to all leaders of political formations,” says Cosatu general secretary Zwelinzima Vavi (pictured). He was speaking yesterday at a briefing after Cosatu’s first central executive committee meeting of the year, the South African Press Association reports.
“We shall campaign to expose the tenderpreneur, who through political connections wins tenders unfairly and provides shoddy services to communities while more genuine entrepreneurs are sidelined as well as their skills and proper services,” he said. Vavi has previously explained that under Sani Abacha’s 1993-1998 directorship in Nigeria, there was a clear pecking order in terms of which tenders were awarded to his family, friends and followers. His concerns follows media reports about ANC Youth League president Julius Malema’s lavish lifestyle that he allegedly bankrolls through lucrative government tenders.
Vavi declined to name those he felt were responsible for tenderpreneuring, but expressed concern at a City Press report revealing that a company to which Malema was linked – SGL engineering projects – won an infrastructure tender and then delivered roads and bridges that washed away after heavy rain. Vavi also condemned “javelin throwing” by politicians who left government service to profit from opportunities they created while they were public servants.
The federation boss added that a clique of tenderpreneurs in the party were making a play for control of the ruling African National Congress – another nod at Malema – at the party’s national general council later this year in order to gain control over the allocation of state finances. “We warn that the action may only plunge the ANC into unprecedented crisis which may destroy its unity and cohesion forever, something they don’t care a damn about,” he said. “… we will not name any individuals involved with those activities, I think any South African will not be confused about what is happening,” he said.
Vavi said the labour federation was also concerned about recent reports that the ANC’s investment arm, Chancellor House, had a 25% stake in Hitachi Africa, the company that has a R38 billion contract to supply boilers for two coal power stations currently under constructions. SA’s electricity price regulator this month granted state power utility Eskom a 25% tariff hike for each of the next three years, a move economists fear will cost the country 200 000 jobs in addition to the 900 000 lost to last year’s recession.
“The problem with this is that the ANC will not be able to ward off genuine concerns that it might have decided to accept the extraordinarily high tariffs imposed on the poor and industry. because it stands to benefit. If it is true that the ANC company has invested in Eskom, then God help us all,” he said. But party secretary general Gwede Mantashe is on record confirming to the media that the ANC does own the share.
According to latest estimates Eskom’s controversial programme will cost R385 billion and create 40 000 direct construction jobs as well as 160 000 direct and indirect jobs in addition to restoring the country’s energy security, or at least that of its power supply.
The Sowetan newspaper earlier this week reported that Public Enterprises minister Barbara Hogan, who is politically responsible for Eskom, had admitted in Parliament that the arrangement was “a conflict of interests in the sense that the ruling party benefitted.” She added that this was “certainly … not desirable”. Hogan also tried to downplay concerns about the ANC benefitting financially from the power price hikes by saying “Chancellor House is a very, very minor subcontractor”. She later told 702 Talkradio that political parties were central to the SA political system, but except for some funding before elections were not supported by the state. Parties therefore needed to raise money to fund themselves between elections.
ANC treasurer-general Mathews Phosa promised two years ago to appoint “reputable bankers” to exit Chancellor House from the Hitachi Africa deal. The Sowetan adds Phosa Wednesday said he has lived up to his promise by advising the “front company” to divest itself of the share. “We stand by what we said two years ago. We advised the firm accordingly and the fact that the company is taking its time, does not mean it is doing nothing,” he told the paper.
The extent of Chancellor House’s dealings in the defence sector is unknown, as is the scale of tenderpreneuring, although anecdotal evidence of the latter, in addition to other tender irregularities, have been reported.
Commentators say the Chancellor House stake in the Eskom construction programme has made it near impossible for the party to rein in tenderpreneurs as what is good for the goose is good for the gander.