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Ekurhuleni: Excessive hopes trashed as tens of millions promised to group contractors evaporate

  • An
    Ekurhuleni waste administration mission to improve small-scale group operators
    into viable companies has led to acrimony.
  • Town
    laid out R1.2 billion – however group operators complain they have been
    short-changed by firms appointed to mentor them.
  • At fault
    is the town’s failure to observe firms which offered mentoring, or to maintain
    watch on how the funding was allotted.

Month after month, John Buthelezi (not
his actual identify) and his little crew emptied bins, picked up litter, cleaned the
streets of Ekurhuleni and emptied containers. Buthelezi had been promised that
after 5 years, he would have R3 million in his checking account, two vehicles and
entry to enterprise {qualifications}.

The 5 years ended on 30 June. However Buthelezi’s
dream of operating his personal profitable waste administration firm is just not prone to

The daddy of three from Katlehong is
one among 45 contributors in a R1.2-billion Metropolis of Ekurhuleni waste removing
mentorship mission. He has not emerged empty-handed: he now owns a truck and
obtained a R250 000 payout. However this can be a far cry from what he had been led to
count on after 5 years.

Buthelezi is a part of a gaggle of Group-Based mostly
Contractors (CBCs) who’ve alleged – each in interviews with amaBhungane and
in petitions to the municipality – that the mission short-changed them.

They argue that cash that must have
gone to the CBCs could as an alternative have been retained by 5 well-established
firms employed to mentor them.

The mentor firms have been paid charges ranging
between R130 million and R450 million, from which they have been to fund the
improvement and operations of the group companies – however for which they
have by no means correctly needed to account.

The 45 CBCs and 6 recyclers have been
appointed in 2017 to render complete refuse removing companies in particular
areas round Ekurhuleni.

They might be guided by 5
well-established firms, known as the Growth Contractors (DCs).

The mission’s goals have been to create
employment, contain the group in cleansing their very own areas and develop
small-scale companies.

By the top of 5 years, these small
companies would have a beneficial banking profile, personal their plant and
gear, and have the monetary muscle and enterprise know-how to go on their

Regardless of the mission’s noble intentions,
it seems to have failed for 3 causes:

  • A scarcity of oversight by the
    municipality, which repeatedly uncared for to make sure that its necessities had
    been applied.
  • The municipality signed
    contractual relationships with the event contractors in control of
    mentoring, however none with the CBCs themselves.
  • The CBCs haven’t any entry to key
    monetary info. The event contractors have been left to interpret
    open-ended contractual preparations in their very own pursuits.

The municipality has not responded to
repeated questions from amaBhungane, nor to complaints from the CBCs.

the mission was to work

In November 2015, the municipality
invited bids from well-established BEE firms within the Ekurhuleni space. The
bid doc didn’t outline entry necessities to qualify for the tender;
bidders have been to be chosen on the idea of the working mannequin plans they

However there was a further issue: there
had already been the same five-year mission which had ended unsatisfactorily.
As a substitute, because the tender doc said: “The choice course of
shall give choice to the outgoing CBC’s for the 2010/15 monetary years as
they didn’t derive the anticipated advantages from the earlier mission.”

The municipality awarded 5 improvement
contractors the contracts originally of July 2016, to run for 5 years.
Every would oversee a particular part of Ekurhuleni’s sprawling metropolitan

The event contractors’
obligations included recruiting their very own CBCs from the neighbourhood; creating
an operational plan to cowl acquisition, operation and upkeep of plant
and gear; producing  costing
projections that will guarantee profitability; controlling and administering the

The event contractor was additionally
anticipated to rearrange coaching and improvement programmes for the CBCs.

In response to a doc detailing
funds to numerous Ekurhuleni initiatives, the 5 appointed improvement
contractors have been:

MCC Safety and Earlier than Daybreak three way partnership

Paid: R467.6 million

MCC Group was established in 1996 and
is concerned in development, waste administration and safety. The corporate web site
says it operates in 4 provinces and is especially engaged in authorities

MCC partnered with Earlier than Daybreak
Property Growth, a waste administration companies firm that additionally affords
development and property administration companies. The businesses have been contracted to
service Tembisa, Daveyton and Etwatwa.

Sungu Sungu

Paid: R241.6 million

Owned by Thabang Khomo, a businessman
mentioned to be politically related in Ekurhuleni. The corporate can be a
contractor in controversial
Ekurhuleni chemical bathroom initiatives. 
Sungu Sungu companies Kathlehong and Dukathole.

Miya Mdluli

Paid: R229 million

Operates within the Vosloorus space. Not
a lot is thought about it. 

Vusimuzi Buying and selling and Njabs

Paid: R131.9 million

Vus’muzi is owned by Chavier Sibiya,
who was a former councillor in Tsakane. It is a three way partnership with Niabs. The
two service the Tsakane and Langaville areas.

Gundo and Nokeng

R130.2 million

Gundo and Nokeng fashioned a three way partnership
that collects garbage within the Thokoza and Palm Ridge areas. It has obtained
native prominence attributable to media stories regarding protests towards poor
efficiency on this contract.

the CBCs anticipated in return

The phrases of the tender specified that every
CBC head ought to obtain a minimal month-to-month wage of R30 000.

By the top of the contract, every CBC would
personal at the very least two 19 cubic meter compactors with bin liners. Compactors are the
large vehicles utilized by waste disposal companies across the nation. The unlawful
dumping crew would get to personal a compactor and a 10-ton tipper truck.

They might additionally obtain coaching in
enterprise abilities, leading to a proper tutorial qualification equal to
NQF6 degree. 

As well as, the CBCs anticipated to obtain
a pay-out of the revenue accruing to the CBC, which was pegged at a most of “15%
of the overall prices excluding month-to-month drawings”.

to day operating of the mission

The tender specs gave
appreciable element to the CBC’s obligations.

These included door-to-door refuse
removing to at the very least 12 000 service factors per week, litter-picking,
removing of unlawful dumping, bulk container companies in sure areas and
using locals from the identical work space.

“The community-based contractor
have to be and keep actively concerned and dedicated to the mission for the
period of the contract,” the tender paperwork said.

The CBCs have been to report day by day to the event
contractor on work accomplished and provide proof comparable to photos. On the finish of the
month, the event contractors have been speculated to compile stories and submit
invoices to the municipality. The CBCs invoiced their improvement contractors
for their very own salaries and the final employees’ wages. 

In response to one CBC, drivers have been paid
R12 000 a month, crew leaders R5 400, runners R4 500 and litter pickers R4
000 a month.

Our informant (‘Buthelezi’) defined
that for about two years, his CBC solely obtained the wage funds. The event
contractor would deal with different operating prices comparable to plant and gear rent,
workplace rental, stationery, private protecting gear, accountants, legal professionals
and human assets specialists.

“So on the finish of the month in my
checking account I’ll, for instance, get R300 000. I must minus my wage and the
employees’ wages and return the remainder of the cash to the DC inside 24 hours.

“One thing we fail to grasp is
how is that this constructing a relationship with a financial institution if each month a big quantity
are available in after which virtually instantly it goes out,” mentioned Buthelezi.

How the cash was spent stays opaque,
however some thought could be gleaned from an bill from Gundo and Nokeng which
amaBhungane has seen.

For every of 5 CBCs, Gundo and Nokeng
would bill R300 000, or R3.6 million over the 12 months. However this determine was
increased than the CBCs precise bills. The CBC would draw down adequate cash
to pay workers and overheads, then return the remaining to the event contractor.

Multiply R3.6 million by 5 CBCs and
and 5 years, and we arrive at a determine of R90 million. We all know that Gundo
and Nokeng have been paid R130 million over the 5 years, leaving a niche of R40

Though we have no idea their different
bills comparable to shopping for vehicles, workplace rental, gas and upkeep and different
sundries, these appear unlikely to have come to shut to R40 million.

that have been ignored

AmaBhungane carried out intensive
interviews with varied waste assortment CBCs mentored by totally different improvement
contractors. None was prepared to be recognized, fearing victimisation.

An amaBhungane evaluation of paperwork we
have seen means that the center of the discontent is the distinction between
the bid specs, which set out the roles and obligations of the
improvement contractor, and the service degree agreements which adopted. 

For instance, based on the bid
specs, every
refuse removing CBC have to be provided with two waste assortment vehicles. Nonetheless most
CBCs obtained just one truck. (The exception being these working for Sung
Sungu.) The recyclers obtained one bakkie (aside from one recycler from Earlier than
Daybreak who didn’t obtain a car in any respect).

One other situation is the secrecy across the
five-year funding of funds on behalf of the CBC and the way the revenue attributable to
them was truly accounted for.

In 2019 a compliance report was compiled
by a former waste division official who analysed Gundo Nokeng’s companies
following public complaints.

He concluded, “Neither the CBC or
their monetary advisors are conscious of the intricacies of the Thokoza Palm Ridge
permitted monetary plan or whether or not it’s being monitored or evaluated towards
projected targets and milestones.”  

The disgruntled Gundo Nokeng CBCs say they
have been shocked to seek out out their investments have been lower than R300 000, after they
have been anticipating a pay-out near R3 million.

The mission supervisor for Gundo Nokeng,
Vongani Shirilele, defended the deviations in a response to amaBhungane.

He mentioned the bid doc was merely a guiding
a instrument for adjudication of the tender. The precise operational guiding guide was
the service degree settlement.

Shirilele declined to provide particulars on how the
funding pay-out was calculated, saying solely that it was primarily based on the
monetary plan submitted to the municipality.

The municipality didn’t reply to

AmaBhungane analysed invoices and located different

For instance, the CBCs contracted to MCC-Earlier than
Daybreak have been paid R21 000 a month as an alternative of R30 000. These CBCs had additionally not obtained their last salaries
and funding payouts. “We don’t know the place the funding cash is, if
it exists,” mentioned one CBC.

The chief government of Earlier than Daybreak, Velani
Magagula, declined to reply questions, citing a non-disclosure settlement with
the municipality that prevented him from revealing something in regards to the
contractual relationships with out “the categorical prior written consent of

Coaching in enterprise abilities

Regardless of
the onerous day by day work necessities, the CBCs have been additionally anticipated to attend
courses. The event contractor was tasked to make sure that every beneficiary
could be educated in enterprise abilities and attain a minimal NQF6 qualification
from an accredited establishment in the course of the 5 years.

The Gundo-Nokeng CBCs say they have been
anticipated to register at Unisa, however that they had objections to distance and on-line studying. “Most
of us have matric. We aren’t used to laptops and like old fashioned studying. We
organised a coach ourselves, however the improvement contractor rejected this,”
mentioned one.

from Gundo Nokeng mentioned the CBC’s most well-liked coach was 4
occasions as costly as Unisa. Regardless of this, after negotiations on the worth,
coaching was permitted.

mentioned it was the CBCs themselves who lacked curiosity within the coaching and by no means
replied to emails asking them which course they want to pursue.

The recycling mission

recycling mission was handled individually from the waste disposal initiatives, with
totally different specs, however was a part of the identical tender and geared toward coaching
recycling cooperatives or small medium and micro enterprises.

bid doc specified that the event contractor was to implement a
coaching programme in workplace administration and enterprise administration. “The
members of the cooperatives shall be given all the required help by the
improvement contractor to make sure the sustainable operating of their enterprise,”
said the bid doc.

improvement contractor was to make sure that the general public offloading facility
offered by the municipality was geared up with workplace amenities. The waste
recycling website was to be supplied with gear together with balers and plastic

improvement contractor was additionally to rearrange a standing settlement between
recycling cooperatives and recycling firms to safe patrons for the
materials. The cash derived from promoting materials from the recycling centre
could be for the cooperative account.

the bid could be very clear on the obligations and expectations of the event
contractor to the recycling CBC, it seems that every mentor had its personal
interpretation of the specs. 

Kenneth Tshabalala, the one individual prepared to talk underneath his personal identify, mentioned
that, on the finish of the contract he solely obtained a Mahindra bakkie.

“For years we complained to the
municipality about this mission and the way we have been being handled by the
improvement contractor however nothing was accomplished. A few of us have been labelled as
hassle makers as a result of we requested questions, and now we have been threatened with dismissal
and that we cannot get our advantages.”

was not getting a wage and I’ve no funding payout to look ahead
to.  Actually this mission is a rip-off
in any case these years I’ve nothing to point out for it,” he mentioned.

added that the amenities with baler machines and plastic granulators by no means

tender doc specified that every improvement contractor implement a
group outreach programme which might educate environmental consciousness.

the service degree settlement mentioned nothing about group outreach, and in accordance
to Tshabalala and different recyclers, this by no means occurred.

Monitoring and analysis

mission’s failure to ship on empowerment advantages could be attributed to a woeful
lack of oversight by the town of Ekurhuleni.

was regardless of the bid specification that there needs to be needs to be supervision,
monitoring and analysis.

bid paperwork required month-to-month assembly between officers, improvement
contractors and CBCs. Nonetheless the CBCs declare that conferences have been solely convened
when employees protested or when there was a dispute.

the dearth of oversight, the municipality had a contract with the event
contractor, however none with any of the CBCs. Every CBC had a contract with the event
contractor, after which one other with their very own basic employees.

“It is
just like the municipal officers launched themselves from any duty and
because of this there have been many protests round this mission. There have been combined
messages and aggrieved events did not know the place to go for assist,”
Tshabalala mentioned.

He mentioned
politicians and officers obtained concerned after media consideration, however didn’t resolve

One other
CBC mentioned municipal officers didn’t reply to their requests for a gathering to
focus on the outcomes of this mission. “How do the officers and
politicians know we obtained what is because of us. They’re solely counting on the DC’s

A brand new contract, however not new hopes

contract ended on 30 June. A brand new waste removing tender has been issued to
exchange it. However the brand new tender necessities have dashed the hopes of CBCs who
have been hoping that this time, they may very well be improvement contractors themselves,
primarily based on their 5 years of expertise.

In accordance
to the brand new bid specs, a bidder will need to have at the very least 9 waste removing
vehicles, R3 million in annual turnover and a minimal of 37 employees, together with basic
employees, drivers and security officers.

taking part on this mission, we do not even qualify to subcontract on this new
one as a result of we do not have sufficient gear or monetary muscle. All we will do
is to use as one other worker … as a result of now we have the expertise,” mentioned one

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