Banana Republic: Tenders plump and delicious
You, too, can make R130m in two years. Here's how .
Feb 21, 2010 10:40 PM
Justice Malala, Sunday Times
Justice Malala: There are many people out there who are wondering what they need to do to get rich as quickly as ANC Youth League president Julius Malema has. As was reported in various media, Malema's companies have made a staggering R130-million from government tenders in a mere two years.
If Malema and his partners were charging a management fee of 25%, they are sitting on a cool R32.5-million. Not bad for two years' work.
For those of you who want to make the same amounts, or more, with no expertise in any field, this column was written for you. Here is how it is done:
First, you need to join your nearest ANC branch. This is very easy. To find out the details, phone the ANC on 011-376-1000. They will put you in touch with your branch and someone will promptly sign you up.
There are no barriers to entry: the ANC wants to sign up as many members as possible and everyone is allowed in.
From here on make sure you attend branch meetings so you can identify who the leaders are, and who in the branch is opposed to the sitting branch leaders.
The next step is to ensure you attend the next annual general meeting of the branch, where you need to raise your hand frequently and make a lot of noise.
If you have some money, buy as many poor people as possible branch membership and make sure they attend the annual general meeting. This way you ensure that you get elected into the branch executive committee.
If you are in a relatively large town such as Polokwane, being on the branch executive committee means you have begun your ride on the gravy train. If you are in a small village somewhere in a godforsaken part of the country, you will need to put in extra work.
From your branch executive committee position, you need to be elected into the regional executive. To do this you may need to lead a service delivery protest in your village or township. You need to agitate against regional ANC leaders, who happen to be sitting as district mayors and councillors.
Once the people believe the leaders are the cause of poor service delivery, tyres will be burnt and all sorts of mayhem will be caused. The national ANC leadership will send in a "task team" that will get rid of the leaders and demand the democratic election of new regional leaders.
Because the rioters will have been organised by you, you will make it into this new "legitimate" leadership structure.
This is what happened in Pretoria, where the ANC leadership has already kicked out the municipal manager and is trying to oust mayor Gwen Ramokgopa. The aim, ultimately, is for them to instal their "own people" into these positions - very soon tenders and other largesse from the council will come through.
When you are at this point of your ANC career, you need to be very careful. Do not become a mayor or municipal employee. Simply become very powerful in the party - with easy access to the deployment committee - and then register companies in your name and your friends' names. This power will ensure that municipal tenders begin flowing to your companies.
Plus, you don't need to declare anything. After all, you are a private citizen, not a public representative.
To make hundreds of millions, you need to aim higher.
One way is to fight tooth and nail - as Malema did - for the leadership of a national structure of the ANC. In Malema's case, there were physical fights at the conference that elected him. Things got so bad the conference was abandoned.
These are battles you may need to fight to get to wealth. But when you have won them, the road is clear for serious looting.
Say, for example, you become known as a person on the winning side of the ANC leadership, as Malema is. Then your Range Rover Sport can arrive in a town like Polokwane and political office bearers will prostrate themselves before you.
Your reputation will be of someone who can whisper in the ear of the premier - mayors could lose their jobs if they don't co-operate with you. When you indicate that certain tenders should be reserved for certain companies, this will be done.
This, my dear friends, is how to make R130-million in two years. It is as easy as saying "banana republic".
» » » » [Sunday Times]
How Malema made his millions
ANCYL president benefits handsomely from state tenders
Feb 21, 2010 12:00 AM
By Buddy Naidu & Simpiwe Piliso, Sunday Times
ANC Youth League president Julius Malema's millionaire lifestyle is being bank-rolled by lucrative government contracts awarded to his companies.
A Sunday Times investigation has found that, despite his claims to the contrary, Malema has benefited substantially from several tenders - and that most of them stem from his home province Limpopo, where he wields significant influence.
One of Malema's businesses, a small engineering firm, has profited from more than R130-million worth of tenders in just two years.
Malema's lavish lifestyle - from his luxury homes, Gucci suits, Breitling watches and parties where his guests are served R700 bottles of whisky and Moët&Chandon champagne - flies in the face of a politician who claims to earn a "middle income" salary.
Malema has often warned ANC supporters to be wary of individuals who cannot explain the source of their fortune.
But when asked about his business dealings yesterday, Malema said: "That is none of your business."
The Sunday Times has seen documents which show that SGL Engineering Projects and its subsidiaries, which Malema co-owns with Lesiba Gwangwa, have been awarded dozens of contracts since 2003 - often from cash-strapped municipalities in Limpopo.
The projects range from road and pavement construction to bulk water supply and upgrading cemeteries.
Asked about his involvement in SGL and its subsidiaries, and the string of tenders awarded to them, Malema responded: "What gives you the power to ask me that question? Let me tell you, I do not owe you any answer, to be honest. I am not accountable to you ... I am accountable to the ANCYL and ANC. My organisations have never raised any concerns about those things.
"There is no law that says politicians can't be businessmen. The problem with you is that when an African child is emerging and becoming successful, that is when you have a problem. That is your major problem that causes you sleepless nights.
"You want to see us dying in poverty. That is what you are committed to."
Official tender and government documents show that Malema - who has been dubbed a "tenderpreneur" (someone politically well-connected who has got rich through the government tendering system) - was involved in more than 20 contracts, each worth between R500000 and R39-million between 2007 and 2008.
Malema's share funded his two luxury homes, worth about R4.6-million.
While he has been seen driving a fleet of cars from a C63 Mercedes-Benz AMG, to an Aston Martin and a Range Rover, none of them is registered in his name. The only car registered in his name is a 2005 Audi A4.
Malema, the son of a former domestic worker, matriculated in 2001. Now, as co-owner of SGL, Malema is worth millions.
But yesterday Malema repeatedly refused to discuss his involvement in SGL.
"I have nothing to do with their operations. I know nothing about what is happening in SGL, where are they making their money, where do they get tenders. I know nothing about that," he said.
Attempts to contact Gwangwa were unsuccessful.
Besides being listed as a consultant for the Waterberg District Municipality, Gwangwa also sits on the board of Magalies Water, a state-owned water board which provides a range of related water and sanitation services to Gauteng, Limpopo, North West and Mpumalanga.
Although the Sunday Times could not establish whether SGL and its subsidiaries have cashed in on Magalies Water contracts, the firm was involved in a R2.1-million sewerage upgrade project, which was awarded by the Waterberg District Municipality and completed in July last year.
Other projects awarded to SGL between 2007 and 2008, include:
- A R39.3-million sewer reticulation project awarded by the Mopani District Municipality;
- A R27.9-million street paving and drainage contract allocated by the Greater Letaba Local Municipality; and
- A R28-million tender for several municipal infrastructure projects from the Tzaneen Municipality.
While the public documents reveal that some of the projects were completed on schedule, the majority of projects were not.
Other municipalities that have given contracts to SGL include Lepelle-Nkumpi, Bojanala Platinum District Municipality, Vhembe District Municipality, Mutale, Makhado, and Tzaneen District Municipality.
SGL was also awarded a tender by Roads Agency Limpopo (RAL), which has a budget of over R2-billion, and which is headed by Sello Rasethaba, a close friend of Malema.
Rasethaba was appointed last year shortly after Malema's ally, Limpopo premier Cassel Mathale, took office.
Another company that has boosted Malema's bank balance is Ever Roaring Investments, which made millions from managing and organising the state-funded annual Mapungubwe Jazz Festival in Polokwane.
According to government officials and politicians who oversaw the awarding of the multi-million-rand contract, it never went out to tender - until recently.
Last year the contract was awarded by tender to Ziyaphenduka Promotions.
Government officials in Limpopo painted a detailed picture of how the ANCYL president's businesses secured repeated tenders.
While Malema's companies often bid for the tenders, some of the contracts are awarded to contractors closely linked to him, who then subcontract his company.
Malema, through SGL, was recently selected as a service provider for government projects including the "implementation of roads and storm-water projects" for the current financial year.
Allegedly Julius Malema's House in Limpopo
Range Rover in Upstairs Room built for car
Range Rover with personalized Numberplates, in Upstairs Room
SGL would therefore be a frontrunner in the rush to benefit from the Limpopo government's request for a R5-billion loan from the Development Bank of Southern Africa (DBSA), to build and upgrade roads in the province.
The Sunday Times has established that Limpopo province has applied for the loan, but the development bank's Rosemary Mangope declined to comment.
The SA Communist Party and trade union federation Cosatu have repeatedly warned against "a culture of tenderpreneurship".
SACP general secretary Blade Nzimande described tenderpreneurs as the "biggest threat to our revolution", and Cosatu general secretary Zwelinzima Vavi has called for a "lifestyle audit" of politicians ''living in expensive houses and throwing lavish parties".
Malema said he would welcome such an audit. "All of us need to be audited. We are agreeing with Cosatu, as the youth league. We are saying that anyone high profile in politics must be audited.
"We are prepared to go for a lifestyle audit, conducted by the democratic institutions of our government - if that (process) is well arranged."
Finance minister Pravin Gordhan this week announced that a task team would investigate corruption in tender and tender and procurement processes in all nine provincial governments
Malema's businesses all share an office bought and registered under Segwalo Consulting Engineers in Limpopo's capital, Polokwane.
The office, in Fauna Park, was bought for R1-million in August 2006, with a bond registered for R950000 with First National Bank. Besides SGL and Ever Roaring Investments, Malema is also a director of Blue Nightingale Trading 61 and 101 Junjus Trading.
In his own words:
- "We are the elite that has been deliberately produced by the ANC as part of its policy to close the gap between blacks and whites in this country. It was the ANC that made it possible that, as part of that elite, some of us are now able to live in the suburbs." - Explaining in December 2008 that the salary he receives from the party makes him part of the black middle class.
- "People go to the township and boast about drinking imported, expensive liquor and the German sedans they drive. This is an insult to the people. What type of message are you sending when you change cars like you are changing shirts?" - Speaking at Esselen Park, where the ANC held its three-day election manifesto conference in December 2008.
- "Being involved in business compromises the independence of the ANCYL because every time you open your mouth, you must check if business will be happy or not." - Following Malema's decision to close down the ANCYL's investment arm, Lembede Investments, which was fraught with allegations of corruption.
- "Never be scared to iron out problems with your mayors and municipal managers because they are your servants. We voted them into power so that they can serve us and not enrich themselves or those close to them." - Speaking at the Peter Mokaba memorial lecture in Vereeniging in September last year.
- "The rich keep getting richer and it is white males who continue to own the means of production in the country. Not even Tokyo (Sexwale), who is the minister of human settlements, is an owner. Tokyo is owing the white baas because he wants to borrow from the banks. Who owns the banks? Tokyo is a rich man, but he doesn't own." - Speaking at the 16th national congress of the South African Students' Congress in Durban in December last year.
» » » » [Sunday Times]
» » [Sunday Times: Malema warms Up Liberal Sandown to Reality]
Malema's tenderpreneurship gets to the heart of what is wrong with the ANC's closed, crony society for the few
Khume Ramulifho, DA Youth National Spokesperson
21 February 2010
“South Africa risks gaining a reputation as one of the most corrupt countries in the world if we do not nip the scourge in the bud. In the midst of abject poverty and hunger, greed and the speedy accumulation of wealth have become the most defining characteristics of South Africa's post-apartheid democracy.” -- Sunday Times Editorial, Nov 22, 2009
The report that ANC Youth League President Julius Malema's lifestyle has been funded by government tenders, and that the majority of the projects won by his firms were not completed on time, demonstrates two facts:
First, tenderpreneurship continues to bankroll heavyweight ANC politicians, as part of the ANC's closed, patronage society for the well-connected few. Along with their policy of cadre deployment, the awarding of government contracts to the ruling elite, stands at the heart of what is so fundamentally wrong about the ANC's style of governance. The tragedy of the sort of tenderpreneurship engaged in by Malema and his ilk, is to be found in the nature of its relationship with the chronic backlogs in service delivery across many South African provinces and municipalities. The link is obvious: contracts or jobs that reward cronies inevitably come at the expense of the majority, since they are provided to those who are well connected, rather than those with the skills to deliver services to the people.
Second, for Malema to say "there is no law that says politicians can't be businessmen" just shows how duplicitous and, frankly, delirious, people like Malema have become. This, after all, was a man who once said "being involved in business compromises the independence of the ANCYL".
In classic ANC style, it's 'one set of rules when they suit us, and another set when they suit us'.
When the Democratic Alliance argued that there was a contradiction between the public attitude of President Zuma and his private behaviour, that assertion was met with considerable outrage from the ANC, which seems incapable of being able to properly identify the requirements of public office. But that contradiction is not particular to the President, it applies to a great many leaders in the ruling party, whose personal values and principles seem to differ fundamentally from those they promote and advocate for the South African people. Julius Malema is only the latest example of this kind of hypocrisy.
And the double standards that mark the gulf between his personal and public personas has reached an acute level, whereby his very name seems to have become synonymous with duplicity. The revelation that Malema's double life extends not only to the various and marked contradictions that define his rhetoric, but to his personal wealth, thus do not come as a surprise.
Indeed, they confirm that, whenever the ANC in general, and the ANCYL in particular, say something, you can be sure their own behaviour runs in the opposite direction.
The ANC might well claim to represent the poor, to berate capitalism for controlling the country's wealth, but its leaders are the first to warp BEE to their favour and to go about systematically creating and sustaining a small black elite, out of touch with ordinary South Africans, but happy to preach with moral indignation from the nearest soap box.
» » » » [Democratic Alliance]
» » [Freedom Front Plus: SARS must investigate ANCYL President]
» » [COSATU: Ban Career Politicians & Wives from Doing Business with Gov.]