DA exposes alleged Mpumalanga Tender Cartel and MEGA

Issued by Bosman Grobler MPL – Spokesperson on Finance & Economic Development
12 Aug 2022 in Press Releases

The DA in Mpumalanga has written to the office of the Public Protector asking them to investigate suspected tender irregularities at the Mpumalanga Economic Growth Agency (MEGA) and a possible tender cartel working in the province.

In 2010 -a construction company bought an erf from the Mbombela Local Municipality for just under R28m. In 2019 the company sold that same erf for over R17m less than it paid for the erf. The DA questions whether this makes any business sense, taking into consideration that prime property prices usually escalate annually.

A third construction company then built a building on that erf after winning a tender from MEGA which was then rented out to MEGA to use as offices!

According to the lease agreement, MEGA will be paying a ridiculous monthly amount of R1 067 800 (including parking, rental and facilities management), which will escalate annually by 8%. With the 8% annual increase, MEGA would have paid over R185 million renting a building. Why can’t they build their own?

It has also come to light that at least two other companies plan to invest over R120m rand into the project. One needs to question why would Company E, (Company C and Company D) invest a further R120 000 000 into a project where the return of the investment is only R185.6 million in 10 years?

The DA strongly suspects that there is a Mpumalanga tender cartel which is monopolising all the tenders in the province through MEGA and influential politicians. Their modus operandi seems to be to suppress and eliminate any competition.

MEGA’s mandate as a parastatal of the Department of Economic Development and Tourism should be to build and maintain a property portfolio that can generate income, help achieve organisational sustainability, and facilitate employment creation.

The DA is requesting the Public Protector to investigate this tender between MEGA and the suspected cartel of companies. If it is found that there are irregularities, this tender (MEGA/2017/13) must set aside.

The DA once again is calling for MEGA to be disbanded, as it is more evident that this entity is nothing more than a cash cow for the political connected.