From state capture inquiry to arrests: 4 must-read stories on the asbestos project
The Hawks have arrested all seven suspects implicated in the allegedly corrupt Free State asbestos auditing project.
The 2014 project cost the province's human settlements department R255m. Companies Blackhead Consulting, owned by Edwin Sodi, and Diamond Hill trading, owned by murdered Ignatius Mpambani, were awarded a contract in a joint venture to assess houses with asbestos roofing in the Free State.
The joint venture later subcontracted Mastertrade 232 to do the audit. Mastertrade, in turn, subcontracted ORI Group to do the audit and assessment for R21.3m.
Sodi made news headlines before the arrests when the state capture inquiry heard his testimony in August.
Here are four critical stories on the matter:
Inexperienced companies appointed for project
Sodi told the inquiry his company did not have the skills to handle the removal and disposal of asbestos sheets despite it being appointed for the project.
Asked why his company agreed to handle the project, he said the plan was to finish the “first phase” , which was the auditing and assessment of households with asbestos roofing.
He said for the removal and disposal of the asbestos sheets, they planned to recruit a service provider which was skilled and accredited for the work.
State capture inquiry evidence leader Paul Pretorius said a letter presented by the companies to human settlements did not mention the companies were not skilled in the handling and disposal of asbestos.
Deputy chief justice Raymond Zondo questioned why the companies agreed to handle a project in which they were not skilled, and said the letter was misleading. The state capture inquiry chair said service providers must not misrepresent their skills when bidding for tenders.
Hawks pounce on six suspects
The Hawks on Wednesday arrested six suspects allegedly involved in the corrupt project. Among them were three senior government officials, three businessmen and five companies.
At the time, one senior government official from KwaZulu-Natal had evaded arrest. Hawks spokesperson Brig Hangwani Mulaudzi said a warrant of arrest in his name had been secured.
Mulaudzi said the suspects will appear in court in Bloemfontein on Friday, where they will face 60 charges which include corruption, fraud and money laundering.
Seventh suspect arrested
After evading arrest, the KwaZulu-Natal suspect, who is a recently appointed senior official at the Richards Bay Industrial Development Zone (RBIDZ), handed himself over to the authorities on Thursday.
Mulaudzi said the official was given an ultimatum by the Hawks and will appear in court with the other suspects on Friday.
How the group broke the law
A 39-page indictment prepared by law enforcement agents against Sodi and his co-accused reveals his company and two others were paid R51m before starting the project. The suspects and their companies also allegedly attempted to pocket R25m from the state.
The first phase of the project involved the assessment of houses with asbestos from March 2014 to April 2015 at a rate of R650 per house. However, the state alleges the price was inflated to R850 per house.
Blackhead Consulting and Diamond Hill in May 2014 further asked to be appointed for the risk audit and assessment, handling of hazardous material and disposal of asbestos.
“The rates were outlined as door-to-door assessment at R1,300 per house, excluding VAT, and removal and disposal to an approved designated site at R32,760 per house,” reads the document.
In June and July 2014, Nthimotse Mokhesi, head of human settlements in the Free State, asked for approval to participate in the contract of the national department of human settlements and a contract between Gauteng human settlements and Blackhead Consulting, in term of Treasury regulations.
His request was approved in August. He then appointed Sodi and Diamond Hill as professional resource teams for the eradication of asbestos in the province. After the service level agreement was entered into between the department and the two companies, the deal amounted to R255m.
The companies were then allegedly paid the R51m advance. The indictment further alleges, among other things, that Blackhead Consulting and Diamond Hill had subcontracted work worth more than R44m to one of the suspects, Sello Radebe and Mastertrade 232.