Staff Reporter
Despite the controversy that surrounded the Free State asbestos audit and removal project for several years, the main contractor approached the courts at the beginning of the year to force the provincial human settlements department to pay up an “outstanding” amount of R25 million.
Blackhead Consulting, owned by embattled Gauteng businessman Edwin Sodi, scored the lucrative deal in a joint venture with Diamond Hill in 2014 under potentially illicit and corrupt circumstances and the actual work was never completed.
National Prosecuting Authority (NPA) financial investigator Nkosipendule Mradla said this in an elaborate affidavit prepared following the arrest of seven people this week in connection with the alleged rot in the awarding and implementation of the project.
The project was valued at about R255 million but the human settlements department only paid R230 million.
Failure by the department to pay the balance prompted the company to approach the Free State High Court on February 5, 2020 seeking the outstanding amount.
But even if the company wins the court claim, the NPA wants the money to be surrendered to the state.
“Blackhead Consulting is claiming the rights on an outstanding amount of R25 000 000 against the Free State Department of Human Settlement in terms of a service level agreement entered between the parties,” said Mradla.
It has since emerged that the contract was overpriced and never went through a competitive procurement process in line with government procurement processes.
The NPA further claims that the Blackhead Consulting and Diamond Hill joint venture was awarded the contract despite not having the requisite qualifications and skills to audit, assess, handle hazardous material as well as remove and dispose of asbestos-contaminated rubble.
“At the time when the appointment was made Sodi, Blackhead Consulting and Diamond Hill well knew that the cost of the service to be provided was at least R44 208 859.79, but despite this proceeded to enter into a contract with the DHS with an exorbitant cost of R255 million,” Mradla claims in his affidavit.
He said this was a gross misrepresentation to the DHS and the state even though they claimed that the contract price was fair and equitable, transparent, competitive and cost-effective.
It is alleged the joint venture never did the actual work.
It subcontracted the project to Mastertrade at a cost of R44 208 856.79.
Mastertrade further subcontracted the Ori Group at a cost of R21 391 489.30.
The work, according to the NPA, was not fully completed by the Ori Group although it claimed to Mastertrade that the work was complete.
The Ori Group was only paid R6 306 834 by Mastertrade.
“I submit that if Blackhead Consulting succeeds on its claim this amount will constitute realisable property of Blackhead Consulting,” said Mradla in his affidavit.