BEE is a giant rip-off - Mantashe

ANC secretary-general Gwede Mantashe has warned BEE companies to stop using the state as their cash cow by providing poor-quality goods at inflated prices, or face exclusion. He said black companies must bring quality and affordability to the table if they needed continued support from the government. Speaking at the ANC’s dialogue series at the University of Johannesburg on Tuesday, Mantashe said it was unacceptable for contractors to charge taxpayers R20 million for a public school when the private sector spent between R5m and R10m on a similar project.

The ANC leader questioned the country’s tender system and lashed government officials for prioritising the enrichment of BEE companies through public contracts at the expense of the provision of quality services at affordable prices. “We need to move away from a tender state to a state that has capacity to do business. The state must be able to do what it has to do and never make secondary what has to be a primary objective,” said Mantashe. “The primary objective of the state is to deliver food to a school. Who delivers it is secondary.”

Suggesting that the public must rise against this practice, he said “we have tolerated it when somebody delivers bread on Monday for the whole week. By Friday, it’s stale.” It also was unacceptable for BEE companies to build bridges that got “eroded at the first rainfall”. Mantashe implored black business owners to reflect on whether their own conduct was not contributing to the “huge ideological attack” on BEE. A representative of the Black Business Council conceded that some BEE companies overcharged taxpayers for building schools. But not everybody agreed with Mantashe. Andile Nyhonyha, a representative of black professionals in the financial sector, admitted that the private sector spent R10m on a similar school, “and even less”.

However, he blamed the ANC’s “lack of clarity” on BEE for the “confusion”. “The party must come clear on whether there is BEE, what it is and what it is all about,” he said. A lion’s share of the state’s total spending of R1.1 trillion, or 32 percent of gross domestic product, is channelled through tenders. A senior government official on Tuesday said President Jacob Zuma established his Presidential Infrastructure Co-ordinating Council (PICC) in September last year partly because the provinces were paying inflated prices for infrastructure projects. Comprising premiers, ministers and metro mayors, the PICC is led by Zuma and Deputy President Kgalema Motlanthe.

Some of the BEE contracts that saw the public being ripped off were often marred by fraud and corruption. Among them are:

• SGL Engineering Projects, a company in which axed ANC Youth League leader Julius Malema was a co-director, built shoddy roads in Limpopo a few years ago as part of R400m worth of tenders from several municipalities;
• A road built at Lebowakgomo, near Polokwane, was washed away weeks after completion;
• Human Settlements Minister Tokyo Sexwale was forced to knock down shoddily built RDP houses for renovation at a cost of billions of rand;
• Some companies are said to charge the government R30 for a loaf of bread that costs about R10; and,
• Forensic auditors probing Limpopo have found that one company charged a provincial government department R500 for a broom last year.