Defence force official linked to dodgy R108m tender

Date: 16 Sep 2009
A top defence force official is linked to a company that received a R108 millioncontract for specialised work it doesn't appear to be qualified to do. Two months before the contract was formally awarded last month, the company had already submitted invoices for start-up costs and work done for more than R5m. The payments were approved. Earlier this month, The Star reported that Origin Exchange Consulting was awarded a two-year contract for R107.8m by the Department of Defence to clear unexploded armament from military land subject to land claims. At the time, neither of the two Origin directors contacted would explain what relevant expertise they had, while experts in the field said they had never heard of them. Now it has emerged that Ministry of Defence logistics expert Mthobisi Zondi runs a business that shares an address in Kloof, KwaZulu-Natal, with Origin Exchange. Last night Zondi flatly denied any link to Origin Exchange or any benefit from the tender. Two sources told The Star that the Origin bid was more than R30m higher than a bid put in by internationally recognised experts in the removal of unexploded ordnance. The Star was also told that Zondi instructed the defence force bid committee to take the Origin Exchange bid. The bid closed on April 22 and a month later Origin Exchange was submitting bills to the Department of Defence, even though the awarding of the contract was announced only on August 14. These included a bill of R3.99m for "project mobilisation costs", although the contract rules this out - "The Department of Defence will only pay for services actually rendered" - and calls for the contractor to provide security. Acting Chief of Logistics Major-General JT Nkonyane signed approval to pay. The contract also requires details of five years' ordnance clearing experience, but Origin Exchange was set up as a shelf company in March, 2007, and the current directors joined in November and in February. The dubious contract is worth about five times more than the total cost - reported this month by the Public Service Commission - of a year's worth of unauthorised, irregular, fruitless and wasteful expenditure and criminal losses reported by all government departments. The Ministry of Defence and Military Veterans and Department of Defence have ignored repeated requests for comment on the tender. Zondi joined the military in May last year. He was the logistics adviser to the Secretary for Defence, then head of the supply chain integration. By February, he became deputy director-general for defence logistics. Zondi previously worked for Petro SA and SA Port Operations, and holds logistics qualifications from the University of Antwerp in Belgium. In November last year, Zondi became one of two directors of the company Oak Park Trading 190. His fellow director is Tshililo Maanda, an IT security adviser who also uses the surname Muthige and in 2007 listed his employer as the National Intelligence Agency. The NIA would not tell The Star whether it had employed Maanda. NIA spokeswoman Lorna Daniels said the agency was prohibited from releasing the names of members. The Kloof property is a busy place. Both Zondi and Maanda use it for their Oak Park business. The Origin Exchange uses it as a business address. The three Origin Exchange directors are KwaZulu-Natal rugby player Rudi Urbach, Joburg businesswoman Busisiwe Pietersen and Martin Madlala. Pietersen joined the business in November last year, and Madlala and Urbach in February, a month before the tender was advertised. Urbach has been linked to the Origin group for years - he listed linked business Origin Investment as his employer in 2004. Pietersen is married to former MK member Ralph "Lawrence" Pietersen and she works from the office of one of his businesses. Ralph Pietersen is a director of many businesses, including The Intelligence Veterans Association. He has been involved in legal disputes over military contracts his businesses got a few years ago. He denied any connection to the Origin Exchange or its defence contracts, even though one of his businesses also uses the Kloof address. Ralph Pietersen and Durban mayor Obed Mlaba set up the African Wanderers Football Club in June, apparently to buy the Nathi Lions soccer team, and both use the Kloof address. But Pietersen denied any links to the Kloof address or those associated with it, or any business dealings with Mlaba. "I'm not a director of African Wanderers Football Club," he said. He said someone recently tried to use his details to open a phone account. "There's something happening which I don't understand." • For more information go to The Star 16/09/09e1