The Pretoria High Court has found that Mpumalanga Premier David Mabuza interfered with a parastatal’s duties when he stopped the bidding process for a fourth casino licence in the province.
On April 8 2014, the Mpumalanga Gambling Board withdrew its request for proposals (RFP) for a new casino licence after Mabuza had written to former MEC for the department of economic development Pinky Phosa, complaining that he and his Cabinet were kept in the dark about the bid.
In a letter dated February 2 2014, Mabuza ordered Phosa to see to it that the process of gathering proposals was halted, even though neither he nor his Cabinet were vested with any power to interfere in the gambling board’s affairs.
“As neither myself nor the executive council was consulted in this regard, it will be appreciated if you, as MEC, would provide me with exposition of the processes and procedures followed by both yourself and the board,” Mabuza wrote.
“The process already embarked upon in respect of the said RFP must be suspended forthwith, until the executive council has been afforded the opportunity to duly consider and express itself on this matter,” he added.
One of the bidders, the Tsogo Sun Group, took the matter to the High Court in Pretoria, where it raised the objection that the premier, his Cabinet and the MEC did not have the power to interfere and give instructions to the Mpumalanga Gambling Board.
Tsogo Sun, according to the court’s judgment, argued that the decision to halt bids was procedurally unfair “because the board did not inform [Tsogo Sun] of the true reasons for the intended cancellation ”.
Tsogo Sun had, during that time, become aware of – and challenged – the fact that Victor Khanye Local Municipality in Delmas had offered a site to Listensure, trading as Delmas Star City Hotel and Casino Entertainment Resort, for the establishment of a casino.
Listensure had also submitted its bid.
Acting judge HR Fourie has set aside the board’s decision – three years since the legal wrangle started – and ordered it to continue to evaluate the preliminary proposals it received when it first invited bidders on September 6 2013.
“It is common cause that only the board is entitled to make a decision to cancel the process in question. The board, however, exercised this power on instructions of the executive council [and] abdicated its powers, in terms of the Mpumalanga Gambling Act, to the executive council,” Fourie said.
“As such, the resolution to cancel the RFP for the fourth licence was unlawful and must be set aside,” he added.
Mabuza’s spokesperson, Zibonele Mncwango, confirmed his having received written questions on the matter, but did not respond.
This order means that a new RFP, published by Mpumalanga Gambling Board chairperson Bheki Mlambo on September 14 2015, is null and void.
The board intends issuing the fourth licence to a company that will build a casino and other recreational facilities with the purpose of maximising economic opportunities to keep the casino viable.
According to the RFP, the board would like the new casino to be located in one of the following places: Mpumalanga’s capital city Mbombela, Standerton, Delmas, Mashishing (formerly Lydenburg) or along the scenic Panorama Route, which includes tourist attractions such as the Kruger National Park, God’s Window, the Three Rondavels and the Bourke’s Luck Potholes.
It should be a casino resort with a stated commitment to developing the tourism potential of the province.
At present, Mpumalanga has three casinos: Emnotweni in Mbombela, Ridge Casino in Emalahleni and Graceland Casino in Secunda.
The Mpumalanga Gambling Board collected R84.8 million in gambling revenue in the past financial year.
Tsogo Sun Group spokesperson Priya Naidoo said it was normal business practice that the company took the matter to court. “There is absolutely no allegation of corruption. It is a normal commercial dispute. We had acquired land and had it rezoned, and it became complicated and we had to go to court.”
She added that Tsogo Sun was keen to develop in the Delmas area, but could not provide details of the type of casino the group wanted to establish or shed light on the amount to be invested and job opportunities that would be created.