Construction mafia battle breaks out in Vaal River project

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2023-08-03 at 18:16 #414805

Nat Quinn
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An hour south of Johannesburg, the Vaal River City interchange and link road projects are under construction – part of a R21 billion mega-project intended to revitalise and rejuvenate the Vaal City area, which includes Vereeniging, Sasolburg and Sebokeng.

Last week, an alleged member of the construction mafia was beaten unconscious by members of the community amid claims that the mafia are being paid off by the construction company, Ditshimega, to keep the community in line.

Ditshimega says it is cooperating with investigators and denies any wrongdoing (see the company’s response below).

Listen/read: Government confronts construction mafia ‘scourge’

On Friday last week, another alleged member of the construction mafia was shot in the Vereeniging CBD, escaping death when the bullet struck his shoulder.

That’s two attacks against alleged mafia members in a week.

Enforcer changes sides

In June, Moneyweb was approached by an enforcer for the construction mafia in the Vaal City area with an interesting story to tell.

Enforcers are usually former convicts capable of threatening, intimidating or actually meting out violence.

The enforcer speaking to Moneyweb claimed that the nine members of the construction mafia on the Vaal City Road projects were being paid R300 000 a month by the contractor, but that several of them – stricken by pangs of conscience or simply buckling to community pressure – had pulled out of the arrangement and were now working to ensure the community gets its expected share of the spoils.

The enforcer, let’s call him ‘Jake’, is a known thug in the area with a criminal rap sheet a page long. He doesn’t attempt to hide it. It’s not wise to mess with him.

But he and four others have left the Vaal City Road construction mafia and thrown their lot in with the community.

Jake’s role as enforcer was to intimidate community members looking for a piece of the construction work. He did this with bare-faced threats.

“We’ll kill you and your family if you don’t shut up,” he would tell people demanding a share of the construction pie.

“We behave like a business forum,” he tells Moneyweb. “One of the mafia guys knows procurement and arranges the payment. Our job is to keep the community in line. When they don’t listen, we come in with force.”

He pulled out of the mafia because he fears tensions are rising to the point where people will die.

Last week’s events suggest he may be right. “We [the mafia] are the gatekeepers. We appoint the security on the site and anyone wanting access to the site has to come through us,” he says. “For that work, nine of us get paid R300 000 a month.”

Investigation

These allegations – the claims of intimidation of community members – are now being investigated by the Gauteng Department of Roads and Transport (DRT).

From the start, members of the community suspected something was rotten when sub-contractors from outside the area were appointed to do key work on the project.

They allege that eminently qualified local companies with the requisite CIDB (Construction Industry Development Board) gradings were pushed aside in favour of contractors with lesser gradings and without roots in the local community.

To keep everyone, including the local community on side, it is alleged that the contractor paid off nine local members of the mafia.

Two parts of the overall project – worth R18 million and R22 million – were to have been earmarked for about 30 local companies that met the required CIBD gradings for the laying of roughly 300 metres of road and the upgrading of the K55 route.

The construction work by Ditshimega is currently underway. Image: Supplied

Community members say these two projects worth a combined R40 million should have gone to local companies, but that didn’t happen.

They claim Ditshimega has attempted to recover this money for itself, paying the mafia 10% to pull this off.

Asked to respond to this claim, Ditshimega says it will not deal with the merits of the allegations out of respect to the investigative process, but denies any unlawful or irregular dealings.

Emergence of the mafia

Construction mafia have sprouted across the country, invading building sites, threatening staff sites – often at the point of a gun – and demanding 30% or more of project revenues.

Perhaps the government should have anticipated this kind of anarchy when it introduced regulations to the Preferential Procurement Policy Framework Act.

The regulations allow 30% of all contract value above R30 million on state construction contracts to be allocated to certain designated groups, including black-owned small, medium and micro-sized enterprises (SMMEs).

The regulations apply to public sector projects, but the mafia, often styled as ‘business forums’, seized on them as an opportunity to invade any building project, whether private or public.

Rather than rely on law enforcement or courts to put the mafia in their place, many contractors find it easier to simply pay them off in what has become a countrywide protection racket.

Public participation

Prior to the commencement of the project, Ditshimega held public participation meetings with the local communities to assess what local skills were available to be employed on the project, as required in terms of regulations to the Preferential Procurement Policy Framework Act.

A roster of local companies capable of fulfilling the contract requirement was assembled, specifically for the R40 million worth of work related to the resurfacing of a section of the Ascot on Vaal Road, which connects Vanderbijlpark with areas south of the Vaal River.

Ditshimega, rather than employing local companies, is claimed to have tried to force local contractors to form a consortium under two companies from outside the area, Seebo Group and Nduvho Construction.

“This violated what we previously agreed with Ditshimega through the public participation process,” says a local community leader who did not want to be named.

“We spent weeks engaging with the contractor and drawing up a list of local capabilities, only to have this completely ignored at the end.”

It now appears that Seebo and Nduvho have been taken out of the project on the grounds that the community is unhappy with their involvement.

Seebo and Nduvho involvement specified in tender

In a statement to Moneyweb, the Gauteng DRT says: “Appointment of two sub-contractors Seebo and Nduvho for 30% of the contract amount is one of the conditions of tender which was put by DRT to all bidders to subcontract 30% of the contract amount to Exempted Micro Enterprises (EMEs) and Qualifying Small Enterprises (QSEs) during the bidding process.”

It says it is currently investigating irregularities in the selection process of local SMMEs.

It is also investigating compliance with the requirement that 30% subcontracting amounts be awarded to EMEs and QSEs.

“Ten percent of the contract amount is allocated to the local SMME [sector] as per the contract,” it says.

“Selection of local SMMEs is supposed to be fair, transparent, competitive and cost effective and aligned to the agreements done during social facilitation process which is done before work commences.

“Social facilitation identified beneficiaries as ward 4 and ward 12 local labourers and SMMEs.”

Frustrated local community

The matter was reported to the department in January, though community members are frustrated with the apparent lack of progress by investigators.

They also claim that meetings with Ditshimega to resolve this issue have come to nought, and claim they have been ignored by the company – which referred them to the mafia for redress of complaints.

That redress took a violent turn over the past week as community members, some armed, took matters into their own hands.

The Gauteng DRT says the matter was referred to its social facilitation team for resolution but, due to the quantum of allegations, has since been passed on to the DRT risk investigation unit.

Moneyweb asked the DRT what steps are being taken to ensure that future projects aimed at uplifting the Vaal area are not going to be awarded to companies that engage with mafia members and award sub-contracts to chosen outsiders.

“[The] Social facilitation unit of the department has been tasked to get all stakeholders to agree on implementation processes before project commence,” replied the DRT.

Are you not afraid that your life is in danger, we asked the enforcer.

“Maybe, but I died a long time ago.”

Ditshimega responds

“We refer to your email addressed to our Mr [Themba] Sekgoele (the CEO) on the 24th of July 2023 wherein various serious allegations are made and questions posed.

“We have been apprised of the pending investigations with regard to the allegations. We have and will continue to provide our co-operation to the investigatory bodies in as far as our co-operation is required.

“Due to the nature of the investigations and our respect for the investigative process, we will not deal with the merits and detail of the allegations, save to deny in the strongest terms any involvement of the Company in any alleged unlawful and/or irregular acts and/or dealings.”

Ditshimega denies being involved in any unlawful activity. Image: Supplied

SOURCE:Construction mafia battle breaks out in Vaal River project – Moneyweb
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An hour south of Johannesburg, the Vaal River City interchange and link road projects are under construction – part of a R21 billion mega-project intended to revitalise and rejuvenate the Vaal City area, which includes Vereeniging, Sasolburg and Sebokeng.

Last week, an alleged member of the construction mafia was beaten unconscious by members of the community amid claims that the mafia are being paid off by the construction company, Ditshimega, to keep the community in line.

Ditshimega says it is cooperating with investigators and denies any wrongdoing (see the company’s response below).

Listen/read: Government confronts construction mafia ‘scourge’

On Friday last week, another alleged member of the construction mafia was shot in the Vereeniging CBD, escaping death when the bullet struck his shoulder.

That’s two attacks against alleged mafia members in a week.

Enforcer changes sides

In June, Moneyweb was approached by an enforcer for the construction mafia in the Vaal City area with an interesting story to tell.

The enforcer, let’s call him ‘Jake’, is a known thug in the area with a criminal rap sheet a page long. He doesn’t attempt to hide it. It’s not wise to mess with him.

But he and four others have left the Vaal City Road construction mafia and thrown their lot in with the community.

Jake’s role as enforcer was to intimidate community members looking for a piece of the construction work. He did this with bare-faced threats.

“We’ll kill you and your family if you don’t shut up,” he would tell people demanding a share of the construction pie.

“We behave like a business forum,” he tells Moneyweb. “One of the mafia guys knows procurement and arranges the payment. Our job is to keep the community in line. When they don’t listen, we come in with force.”

Last week’s events suggest he may be right. “We [the mafia] are the gatekeepers. We appoint the security on the site and anyone wanting access to the site has to come through us,” he says. “For that work, nine of us get paid R300 000 a month.”

Investigation

These allegations – the claims of intimidation of community members – are now being investigated by the Gauteng Department of Roads and Transport (DRT).

From the start, members of the community suspected something was rotten when sub-contractors from outside the area were appointed to do key work on the project.

They allege that eminently qualified local companies with the requisite CIDB (Construction Industry Development Board) gradings were pushed aside in favour of contractors with lesser gradings and without roots in the local community.

To keep everyone, including the local community on side, it is alleged that the contractor paid off nine local members of the mafia.

Two parts of the overall project – worth R18 million and R22 million – were to have been earmarked for about 30 local companies that met the required CIBD gradings for the laying of roughly 300 metres of road and the upgrading of the K55 route.

Community members say these two projects worth a combined R40 million should have gone to local companies, but that didn’t happen.

They claim Ditshimega has attempted to recover this money for itself, paying the mafia 10% to pull this off.

Asked to respond to this claim, Ditshimega says it will not deal with the merits of the allegations out of respect to the investigative process, but denies any unlawful or irregular dealings.

Emergence of the mafia

Construction mafia have sprouted across the country, invading building sites, threatening staff sites – often at the point of a gun – and demanding 30% or more of project revenues.

The regulations allow 30% of all contract value above R30 million on state construction contracts to be allocated to certain designated groups, including black-owned small, medium and micro-sized enterprises (SMMEs).

The regulations apply to public sector projects, but the mafia, often styled as ‘business forums’, seized on them as an opportunity to invade any building project, whether private or public.

Rather than rely on law enforcement or courts to put the mafia in their place, many contractors find it easier to simply pay them off in what has become a countrywide protection racket.

Public participation

Prior to the commencement of the project, Ditshimega held public participation meetings with the local communities to assess what local skills were available to be employed on the project, as required in terms of regulations to the Preferential Procurement Policy Framework Act.

A roster of local companies capable of fulfilling the contract requirement was assembled, specifically for the R40 million worth of work related to the resurfacing of a section of the Ascot on Vaal Road, which connects Vanderbijlpark with areas south of the Vaal River.

“This violated what we previously agreed with Ditshimega through the public participation process,” says a local community leader who did not want to be named.

“We spent weeks engaging with the contractor and drawing up a list of local capabilities, only to have this completely ignored at the end.”

It now appears that Seebo and Nduvho have been taken out of the project on the grounds that the community is unhappy with their involvement.

Seebo and Nduvho involvement specified in tender

It says it is currently investigating irregularities in the selection process of local SMMEs.

It is also investigating compliance with the requirement that 30% subcontracting amounts be awarded to EMEs and QSEs.

“Ten percent of the contract amount is allocated to the local SMME [sector] as per the contract,” it says.

“Selection of local SMMEs is supposed to be fair, transparent, competitive and cost effective and aligned to the agreements done during social facilitation process which is done before work commences.

“Social facilitation identified beneficiaries as ward 4 and ward 12 local labourers and SMMEs.”

Frustrated local community

The matter was reported to the department in January, though community members are frustrated with the apparent lack of progress by investigators.

They also claim that meetings with Ditshimega to resolve this issue have come to nought, and claim they have been ignored by the company – which referred them to the mafia for redress of complaints.

The Gauteng DRT says the matter was referred to its social facilitation team for resolution but, due to the quantum of allegations, has since been passed on to the DRT risk investigation unit.

Moneyweb asked the DRT what steps are being taken to ensure that future projects aimed at uplifting the Vaal area are not going to be awarded to companies that engage with mafia members and award sub-contracts to chosen outsiders.

“[The] Social facilitation unit of the department has been tasked to get all stakeholders to agree on implementation processes before project commence,” replied the DRT.

Are you not afraid that your life is in danger, we asked the enforcer.

“Maybe, but I died a long time ago.”

Ditshimega responds

“We refer to your email addressed to our Mr [Themba] Sekgoele (the CEO) on the 24th of July 2023 wherein various serious allegations are made and questions posed.

“We have been apprised of the pending investigations with regard to the allegations. We have and will continue to provide our co-operation to the investigatory bodies in as far as our co-operation is required.

“Due to the nature of the investigations and our respect for the investigative process, we will not deal with the merits and detail of the allegations, save to deny in the strongest terms any involvement of the Company in any alleged unlawful and/or irregular acts and/or dealings.”