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Former Free State Official Admits Supply Chain Rules Ignored In Awarding Multimillion Rand Asbestos Tender

Free State Human Settlements Department staff members did not follow internal supply chain and National Treasury regulations when an unsolicited bid for a multimillion-rand asbestos tender was approved, the Zondo commission heard.

On Friday, the inquiry heard testimony from Nthimotse Mokhesi, the former head of the department.

Mokhesi took the stand after his legal representative, advocate Dali Mpofu, failed to convince Deputy Chief Justice Raymond Zondo that his testimony should be postponed.

Mpofu argued that Mokhesi feared incriminating himself if he took the stand as he was aware that law enforcement agencies were interested in investigating the controversial asbestos tender.

It was under Mokhesi’s watch that a controversial contract to assess and remove asbestos roofing from thousands of houses was awarded to joint bidders Blackhead Consulting and Diamond Hill in 2014.

The two companies were appointed through an extension of a Gauteng asbestos tender which Blackhead Consulting was part of.

At the time, Blackhead was one of eight companies that were appointed to assess asbestos roofing in government houses in Gauteng. The company was paid over R200 million to assess 250 000 housing units for asbestos.

The Free State Department of Human Settlements used this panel appointment of Blackhead Consulting in Gauteng to seek an “extension” of the contract for use in the Free State.

So far, the inquiry has heard evidence from three individuals that were linked to the contract, namely Edwin Sodi and Thabiso Zulu, a former official at the national Department of Human Settlements.

Sodi, a director at Blackhead Consulting, admitted to the commission that he had omitted to mention to the department that his company was not certified to handle asbestos. He also admitted he never disclosed that the tender would eventually be subcontracted twice.

Mokhesi, as the accounting officer at the Free State Department of Human Settlements, faced tough questions over his oversight role which saw the Blackhead and Diamond Hill joint venture being appointed.

Mokhesi first said he had not been entirely involved in assessing the proposal from the joint venture to assess and remove asbestos in Free State government houses. He delegated his responsibility to his supply chain counterpart.

Advocate Paul Pretorius, the head of the commission’s legal team, showed Mokhesi documents which regulated how bids, or in this case unsolicited business proposals, should be dealt with.

These documents include an internal supply chain memorandum that Mokhesi had signed, another was the PFMA and a National Treasury memorandum drawn up in 2009.

These documents cite how government entities should handle unsolicited bidders, namely that they should be proposing a service that is new and innovative and it should be cost-effective.

When Pretorius asked Mokhesi if the proposal presented by the joint venture had been innovative, he admitted that it was not. He also admitted the proposal had not provided a breakdown of how much the government would be required to spend.

Pretorius asked: “When you read the unsolicited proposal, did you consider whether it met the requirements?”

Mokhesi replied: “The instrument that was used for this proposal was not the correct one, I admit. The application of that proposal and how it was applied was an issue, it was a problem. Mr Matlakala (supply chain manager) applied the wrong prescripts in this situation.”

According to government regulations, for one province to enter and participate in a contract sought from another province, it requires that the same features remain, including the service provider, the prices and service.

the evidence before the commission, it appears this was not the case. None of the features of the Free State asbestos project was the same as in Gauteng.

Mokhesi also conceded in this case that his supply chain department staffers did not obtain the needed documents from Gauteng, which included the details of the original contract.

Mokhesi also admitted he only became aware after the joint venture was appointed that it was not Blackhead Consulting being appointed by a joint venture with Diamond Hill.

“That Diamond Hill was not part of Gauteng only became apparent later. We picked it up when external auditors came up,” Mokhesi told the inquiry

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