Aerospace project: DA alleges fraud

Allegations of fraud, corruption and reckless tender appointments have surfaced about the planned Centurion Aerospace Village (CAV), in a Trade and Industry Department (dti) mandated forensic report into the project. A heavily redacted and censored forensic report by Nexus into financial and administrative irregularities at the CAV, an aerospace supplier park modelled on the insights and successes gained by the automotive industry, was obtained by the DA through an application in terms of the Promotion of Access to Information Act. Patrick Atkinson, the DA’s shadow deputy minister of economic development, said yesterday that despite efforts by the dti to erase the names of implicated companies, contractors and department officials, the report still found maladministration and unauthorised expenditure “running into millions”.

He said a parliamentary question he had submitted to Trade and Industry Minister Rob Davies asking for an annual breakdown of the costs of establishing the aerospace village since its inception indicated that the costs totalled R95 million. However, Atkinson said the forensic report mentioned that R122m had been distributed to the CAV from October 2006 until March 2013. Solly Msimanga, the DA mayoral candidate for Tshwane in next year’s local government elections, said the city had in 2012 also budgeted R5 billion for the CAV and the creation of 1 000 jobs, but it was unclear how much money had been used by the city for the project. Attempts to obtain comment from the dti and the City of Tshwane were unsuccessful. Atkinson added that the forensic report, dated June 18, 2014, made an array of damning findings ranging from financial irregularities to possible tender fraud and corruption.

“The report also makes recommendations that both the CAV and government officials be held civilly, and in at least one instance, criminally liable,” he said. Among the findings of the forensic report were an irregular tender appointment worth R65m for bulk earthworks and infrastructure because 10 of the 11 bidders were disqualified. But the report said it was abundantly clear that most of the reasons for disqualification of the other bidders would not withstand scrutiny in a court of law if challenged in terms of the Promotion of Administrative Justice Act and in some instances the disqualifications “border on reckless behaviour”. In addition, the forensic investigation could not locate approval by the CAV’s board, executive committee or management for the appointment of five service providers for contracts valued at R84.9m. The report also found the CAV was in contravention of the memorandum of understanding it had signed with the dti because it could not provide invoices or cheque stubs for a total amount of R642 698.82.

It said “a reasonable suspicion of fraud and corruption” also existed for total expenditure of R1.14m on catering and recommended that in terms of the Prevention and Combating of Corrupt Activities Act, the dti “has a legal duty to report this to the SA Police Services”. The aerospace village project, together with the National Aerospace Centre of Excellence at the University of the Witwatersrand and the Aerospace Industry Support Initiative housed at the Innovation Hub in Pretoria, formed part of a three-pronged government initiative launched in 2007. Nomfuneko Majaja, the then chief director for advanced manufacturing at the dti, said at a sod turning ceremony in August 2008 that the project would create about 300 jobs during the construction phase and about 500 permanent jobs when the medium-sized enterprises started operating in the first phase. Speaking outside the site for the CAV yesterday, Atkinson said sadly all that existed seven years later was “a vacant plot of barren land characterised only by a few piles of sand and enclosed by a rusted barbed wire fence”.