State Capture: Sub-contractor involved in Free State asbestos project charged 10% of overall fee charged

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Deputy Chief Justice Raymond Zondo.
Deputy Chief Justice Raymond Zondo.
Photo: Netwerk24
  • A sub-contractor involved in the Free State asbestos audit project says he charged 10% from the overall fee charged by the main contractor. 
  • ORI Group PTY LTD director Abel Manyike was testifying at the Zondo commission on Friday.  
  • A joint venture between Blackhead Consulting and Diamond Hill Trading 71 scored the contract.

A businessman who was subcontracted to assess and audit Free State asbestos housing units, says he charged 10% of the overall fee charged by the main contractor to the provincial department of human settlements.

ORI Group PTY LTD director Abel Manyike was testifying before chairperson of the state capture commission, Deputy Chief Justice Raymond Zondo on Friday.

The focus was on the R255 million asbestos audit project in the province. 

A joint venture between Gauteng-based engineering consultancy firm Blackhead Consulting and Diamond Hill Trading 71, scored the contract in 2014 for the "audit and assessment of asbestos housing units". 

News24 previously reported that records from the department also showed it had paid the joint venture R230 million in 10 tranches between the end of 2014 and August 2016.

"Would it be correct to say that if the Free State department of human settlements invited bids openly, you could have put in the bid to do the job and what you would have charged may well have been exactly what you charged for doing this job, would it be correct to say that? Or is the position that if you had been the main contractor, you would also have charged maybe R250 million?" Zondo asked.  

READ | Zondo commission: Businessman confirms document linking Magashule to kickbacks was created on his PC

Manyike answered: "I would have done that chair; I would have partnered with someone with financial muscle simply because before [government] awards jobs of this nature, they look at your financial position. So I would have been disadvantaged".

He also told Zondo that charging 10% was "fair" and "profitable".

The joint venture sub-contracted the work to Master Trade who, in turn, sub-contracted to Manyike's company.

But Manyike told Zondo that Master Trade did not have "the expertise" to do the work.

"I don't know if Blackhead was aware of that, but I saw some papers where he wrote as if, taking all the glory and credit, but he never did the work. He has always been a social facilitator," Manyike testified.

Manyike told the commission that he was litigating against Master Trade for money owed to him.

He claimed that when the Special Investigating Unit went to court to obtain documents, there were certain affidavits that "grew feet".

"I saw that being a limitation to them being able to execute the investigation. I could see there was an alleged deliberate intent for some documents," he said.

"I could see there is a strong hand messing with things," he said.

On Monday during his lengthy opening, head of the commission's legal team, advocate Paul Pretorius said the team conducted an investigation into the project.

He said Gauteng and the Free State had extended the multimillion-rand asbestos contract to each other, adding the process was flawed.

In Gauteng, he said, a panel of service providers was appointed, adding there were two panels appointed, one doing work in general housing and another to eradicate asbestos.

There was also no evidence of any competitive bidding that occurred in relation to the appointment of either panel, he said.

"A panel of eight contractors were appointed to do an audit of asbestos in Gauteng and they did so on the basis of instructions to perform work.

"The price that Blackhead charged, or the assessment, not the eradication, was R650 per unit".

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