SA Express's R2.4bn fuel con
Music promoter got state airline 'dodgy deal' worth R67-million a month
A little-known music promoter was awarded a R2.4-billion, three-year deal to supply SA Express with fuel - at a cool R67-million a month - despite the troubled airline already having a contract to receive jet fuel from SAA.
The Sunday Times can today reveal that two SA Express executives, Sam Vilakazi and Merriam Mochoele, allegedly engineered the deal with EML Energy, owned by Pretoria music promoter Eldridge Motlhake, without any tender process or the knowledge of the airline's board and management.
SA Express did not receive one drop of fuel for the R2.4-billion deal.
"I can't comment due to contractual obligations," Motlhake said last night. Neither Vilakazi nor Mochoele could be reached for comment.
The Sunday Times has seen the contract, which is now the subject of an investigation.
Little is known about Motlhake, who has a habit of posting pictures of himself with South Africa's rich and powerful on Facebook.
The Sunday Times visited the head office of EML Energy yesterday. It is a nondescript house with palisade fencing in the Pretoria suburb of Akasia.
SA Express confirmed that its current fuel supply deal with SAA came at an average cost of R45-million a month, meaning the dodgy EML Energy deal was inflated by roughly R22-million a month - R800-million more than SAA over the three years.
The South African Civil Aviation Authority suspended SA Express's operations on Thursday and grounded all of the airline's planes after it failed several safety requirements.Public Enterprises Minister Pravin Gordhan revealed on the same day that the carrier had paid more than R5.7-million to Trillian Capital, a Gupta-linked company, without following due process, and hinted at another dodgy R67-million deal, believed to be the EML deal.
Airline spokeswoman Refilwe Masemola said yesterday: "Once the irregularity of this contract was brought to the attention of management, the airline enlisted the assistance of forensic investigators."
A meeting was later arranged with EML Energy, where "the supplier confirmed that this contract was issued without following the airline's procurement processes and that they had engaged directly with some executives, who have subsequently been placed on suspension", she said.
"A full internal investigation into the matter is under way, and once the final report is concluded, the airline will explore all legal charges to be proffered against the ... parties concerned."
Masemola also confirmed that SA Express's fuel contract with SAA was still in place. "It is our view that it was operationally senseless and financially irresponsible to conclude a fuel agreement with a third-party supplier while the SAA agreement was still in place."
She said Vilakazi was suspended because, as chief procurement officer, his "role entails that he provided expertise with regard to procurement arrangements, and had exhaustive oversight over the purchasing contracts entered into by the airline".She said Vilakazi and Mochoele were both members of the bid adjudication committee.
Investigators had established that Mochoele, the airline's head of legal, risk and compliance, had been given permission by the previous acting CEO, Victor Xaba, to sign the deal on behalf of the airline, she said.
SAA spokesman Tlali Tlali confirmed that the airline has been supplying SA Express with fuel "for at least the past 10 years".
When asked whether SA Express might have entered into the deal with EML Energy because it was not getting enough fuel from SAA, Tlali said: "To the extent we are aware, there has never been any such complaints by SA Express. The contracts entered into with suppliers are for the full requirements of SA Express and we manage fuel for them."
Little is known about EML and no public records exist of Motlhake previously handling contracts of this magnitude.
He has posed for pictures with former president Jacob Zuma and ANC secretary-general Ace Magashule, among others, and in February last year posted pictures of an SA Express plane with the caption "Almost is not enough".