Hawks probe MTN, CCTV contracts
Business Day30 May 2019Niki Moore
Under a cloud: Mayor Zandile Gumede was recently arrested on charges of fraud, corruption and racketeering.
The eThekwini metro's controversial cell tower project with MTN and the associated roll-out of CCTV cameras
in the city are two contracts Hawks investigators are scrutinising as part of their probe into alleged tender fraud and money laundering.
The eThekwini metro's controversial cell tower project with MTN and the associated rollout of CCTV cameras in the city are two contracts Hawks investigators are scrutinising as part of their probe into alleged tender fraud and money laundering associated with mayor Zandile Gumede and senior officials.
The investigations have revealed that Gumede, head of disaster management Vincent Ngubane and
his deputy, Mervin Govender, allegedly benefited from the two projects.
Gumede was recently arrested on charges of fraud, corruption and racketeering related to a controversial R208m Durban Solid Waste tender. She and two others were released on bail of R50,000.
The Mail & Guardian reported that the Hawks are expected to move against 62 other councillors.
Business Day has learnt about the MTN and CCTV contract investigations from several sources in the Hawks who wished to remain anonymous.
Hawks spokesperson Brig Hangwani Mulaudzi said: "There are a number of investigations under way, but we cannot comment on any specific investigation until it has been completed."
Numerous attempts to get comment from the city manager's office, the integrity unit and the communications department failed. Gumede's office, Ngubane and Govender have repeatedly failed to respond to requests for comment.
The MTN matter was first raised in 2017, when Durban residents took the metro to court over the unprocedural building of cell masts. Court papers revealed a letter from Ngubane, allegedly giving MTN permission to erect hundreds of towers across Durban, allegedly without due process.
MTN said at the time it was an "infrastructure-sharing" arrangement dating back to the 2010 World Cup.
The city announced then that the towers were in fact "camera poles" to house CCTV cameras. Only later was the municipality compelled to concede that the poles were cell towers for MTN.
There is no documentary evidence of an infrastructure-sharing arrangement with MTN, though some masts were fitted with CCTV cameras.
In 2016, the disaster management unit issued a tender for "the installation and maintenance of CCTV cameras" worth about R115m over three years. The tender was awarded to Brandfin Trade 110cc, a shelf company that in the past two years won two tenders from the municipality for unspecified "technical assistance" to the value of about R13.5m.
In November 2014 Brandfin Trade received an additional R5m through the controversial section 36 exception clause, which allows deviation from supply chain management processes in cases of emergency, citing that Brandfin was the only company with the relevant expertise in common proprietary software.
Between 2015 and 2018, Brandfin would be paid about R100m for installing 130 cameras, some of them on the MTN masts. Fifty were intended to be simple surveillance cameras, but 80 were intended to be topof-the-range number platerecognition cameras. These cameras are linked to sophisticated software in the cloud that matches CCTV footage to the licence-plate numbers of vehicles sought by police.
On its website, the company claims to have a record of "steady growth in the IT sector since 1998". A company search shows that the current sole director, Alistair Mingay, took over the shelf company in 2005, prior to which he was a sales manager for Konika cameras. Before the municipal tenders, Brandfin had no record of work in the security industry.
The website also claims that Brandfin is "51% black-owned" through the Siza Ntombi Trust, an empowerment fund that disburses "100% of its revenue to improve black ladies under the age of 35 [sic]". But trust records show that Siza Ntombi has three white shareholders only.
In a telephone interview in April 2019, director Brad Wooldridge said the trust had only been operating for a few months and had made no disbursements yet. Brandfin pays R100 tax per year.
In June 2018, the city advertised for yet another rollout of CCTV security cameras, including on-board bus surveillance cameras. This tender, valued at R310m over three years, was awarded to EOH Security and Building Technologies (now named Nextec), a wholly owned subsidiary of Johannesburgbased EOH Holdings.
EOH is doing an internal investigation regarding corruption involving government contracts, which is expected to be concluded at the end of May.
Member of the metro security oversight committee Shaun Riley has claimed repeatedly that the cameras have never worked satisfactorily, and Ngubane is quoted as explaining the fibre optic cables were never connected. However, Mingay claims the cameras have all worked as per installation and that his firm delivered the service at an industry-related price. He said problems encountered were due to the city changing its mind over cloud-based services, and unprofessional conduct by service providers.
Company records show that Govender established a private company with his wife in 2015, allegedly to get contracts through the CCTV tender.
Ngubane has been the subject of several probes into fraud and corruption. No results on these were ever revealed.
In August 2018, building contractor Calvin Mathibela claimed in a newspaper article that tenders in Durban all depended on a "donation" that had to be paid into the Mama Zandile Gumede Foundation.
MTN, Brandfin and EOH Holdings were asked if they had been approached about a "donation". MTN said anyone found guilty of bribery should be prosecuted, and EOH said it has "engaged ENSafrica to conduct an independent investigation into all legacy public sector contracts". Brandfin did not respond to this request for comment.
THERE IS NO DOCUMENTARY EVIDENCE OF AN INFRASTRUCTURE SHARING ARRANGEMENT WITH MTN
SECURITY OVERSIGHT COMMITTEE MEMBER SHAUN RILEY HAS CLAIMED REPEATEDLY THE CAMERAS HAVE NEVER WORKED SATISFACTORILY