Nkandla prices ‘a joke’

2012-11-10 20:15

R248m bill is grossly inflated, say contractors

Construction experts have questioned the cost of controversial upgrades to President Jacob Zuma’s R248 million Nkandla estate, with some describing the costs as a “joke” and many saying they seem to have been grossly inflated.

City Press spoke to experts in the construction industry after the department of public works this week asked Auditor-General Terence Nombembe to probe the spending.

Nombembe’s investigation of the costs comes as Public Protector Thuli Madonsela is probing the upgrades, which were largely paid for by the taxpayer.

The experts agreed to speak to City Press without access to detailed information about the extent of the renovations.

This information has been deemed secret by Public Works as Zuma’s private residence has been declared a national key point.

Stuart Clark, a contracts manager at Reed Simpson Construction, said that after taking a look at published pictures of the residence, the R66 million paid to Bonelena Construction for 25 buildings was “grossly overestimated”.

This translates to R2.6 million per house. These structures are thought to be accommodation for Zuma’s bodyguards.

According to documents in the possession of City Press, a builder, Moneymine 310, was paid R48 million to construct six buildings at the residence at a cost of R8 million each.

“The further away the construction site is, the higher the price of construction, with everything having to be hauled in from far away. But looking at the pictures (of the residence), everything seems overpriced,” said Clark.

“For R2.6 million you can get a high-end house over 275 square metres at R11 000 per square metre. I can build a three-bedroom house with two bathrooms, a lounge, a dining room, a double-door garage and a patio. Because the completed houses look like thatched rondavels, there’s not a chance each one cost more than R500 000 to build.”

Asked whether any of the houses he could see from photos could cost anything up to R8 million, Clark reiterated: “Not a chance!”

He said: “The R2.6 million for each of those buildings is astronomical and sounds diabolical. Pay me R500 000 (to construct each house) and I will do that job and make a profit.”

He said a bunker and a separate sewage works system would increase the cost of construction “because underground works cost a lot to do”.

Clark estimated he would, however, have charged a maximum of R3 million for each of the main buildings.

Hermanus van Niekerk, owner of Security Experts, said the R30 million price tag for security equipment and fencing at Zuma’s private residence was a “joke”, adding it was “impossible to think security installations can cost that much”.

Van Niekerk, with more than 20 years of managerial and technical experience in the security industry, said security installations could include anything from alarm systems, fencing, fingerprint access control and motion sensors, to security cameras linked to a client’s cellular phone, laptop or computer.

“If you take a 50-hectare farm and you install all the security features with all the bells and whistles, you can secure it for less than R1 million. The R21 million (for security equipment) is a ridiculous price that seems inflated. It seems someone, somewhere is inflating the prices,” said Van Niekerk.

He said even with the most expensive security fence, he would not put the final price for security at more than R2 million.

Van Niekerk said a camera system with immediate streaming of live video to a mobile phone would cost about R100 000 “and even with those technical gadgets security for one residence should not cost that much money”.

Richard Nowitz, sales manager at United Elevators, the country’s biggest independent lifts company, said the R2.3 million price tag for a lift seemed “very exorbitant”.

He said the most expensive lift his company had ever installed cost R600 000.

Nowitz could not say what kind of lift one could install for R2.3 million.

He said he had supplied and installed a lift with marble floors in Sandton – which stops on four floors, carries 13 people and can hold 1 000kg at a time – with up-market finishes, a full stainless steel cabin and “state-of-the-art LCD displays” for R389 000, excluding tax.

Anthony Arbuthnot, a seasoned construction projects manager from KwaZulu-Natal, said the industry used regulated guidelines to estimate tariffs and fees.

The R5.4 million paid by the state to one project manager was “not out of kilter” with what he would have charged, as the costs are calculated at a percentage of the entire project cost.

However, the R18.6 million paid to Minenhle Makhanya Architects seems inflated, said an industry architect.

Had tariffs been prescribed, and based on the total cost to upgrade Zuma’s compound, the architect’s fees should have come to R14.3 million.

An air conditioning expert, who asked not to be named because he does work for government, said the R1.5 million spent by the state to install air conditioners in all the houses was “not unusual”, but added all systems did not cost the same.

“For one big house, three standard air conditioners can cost you R12 000, maximum,” said the expert, adding he could install air conditioning in a five-storey building for less than R1 million.

A glass company said that for the R3 million paid by the state for bulletproof glass, it could have supplied 3 hectares of bulletproof glass – enough for an eight-storey building.

Nkandlagate: Did contractors overcharge?

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