Bosa’s Allie and MEC Maile clash over Gauteng’s mini-distribution centres

Member of the Gauteng provincial legislature for Build One South Africa (Bosa) Ayanda Allie has accused MEC for economic development Lebogang Maile and the previous administration of spending millions on what she claims are ineffective distribution centres (DCs).

“Don’t insult my intelligence. I was at that supermarket you claim is a DC,” Allie said. “This did not cost R3m to upgrade, market and stock, as they’d have us believe.”

According to Allie and Bosa, the public has not been sufficiently informed about the true state of the projects.

In a statement released by Bosa, the party questioned the involvement of Family Tree Holdings (FTH), which was selected by the department as an implementing partner for the Gauteng Township Development Act.

The statement detailed how FTH secured R25m from the Gauteng Enterprise Propeller and an additional R25m from the Industrial Development Corporation. The funds were reportedly matched by private sector funding, bringing the total to R100m, which was channelled through the Kasi Mnotho Fund.

Bosa contends that despite the large financial commitments, many township entrepreneurs have reported receiving no funding, even though they met the eligibility criteria.

In response, Castro Ngobese, spokesperson for the MEC for and economic development, defended the operations of the mini-DCs, particularly the Thokoza mini-DC.

“Since the launch of the DCs, 15 local spaza shops have consistently bought stock from the Thokoza mini-distribution centres. The strategy is to onboard additional local shops as ownership of the stores returns to local operators. At full operation, Thokoza mini-DC has about 18 employees under normal conditions, with staffing levels adjusted to meet seasonal demand,” Ngobese said.

The department also addressed concerns regarding the financial transparency of the DC projects.

“The cost of establishing a DC varies, depending on factors such as whether an existing structure is refurbished or a new one is built and the size. Significant upgrades were required before reopening the Thokoza (Kathorus) DC as a superstore/mini-distribution centre,” Ngobese said.

He provided a detailed cost breakdown for the Thokoza mini-DC, which amounted to R2,984,930:

• R1,013,285 for building upgrades;
• R187,589 for furniture and fittings;
• R347,368 for systems;
• R1,042,954 for stock;
• R212,345 for marketing; and
• R181,389 for overheads.

“The department will act accordingly should any evidence of wastage or misuse of funds emerge, not only in its retail programmes but within the Township Economic Partnership Fund as a whole.”

In an effort to address concerns and improve the programme, the department is conducting an impact evaluation of the township retail programme, which includes the mini-DCs.

“The department is conducting an impact evaluation of the township retail programme, including the DCs and their effect on the local community. The evaluation, once completed, will highlight areas for improvement and determine whether the programme should continue,” Ngobese added.

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