Gauteng provincial government forked out R28m on 16 converted shipping containers to be used as fruit and vegetable stalls — at R1.75m each as part of an empowerment project that is now being scrapped.
It cost R1.38m per each 6-metre container for “architectural design, construction, and commissioning” as well as R375,443 each for “customised insulation and anti-rust coating”. The total cost of R1.75m for each one could buy a three- to four-bedroom house in most Johannesburg suburbs.
The Gauteng department of agriculture and rural development & environment (Gdard) awarded the project implementation contract to a company called Farm Yard last year to run a market outlet programme in townships across the province.
Among the shocking line items Farm Yard charged was for “equipment and fittings” at R1.12m. In this budget were 16 branded bicycles with “thermo storage” that cost R16,000 each, as well as 16 sets of three branded T-shirts and caps at R14,000 per set.
Signage and branding cost a further R1.5m, while community and site feasibility work which included “gang surveillance and crimes stats review” cost R1.85m.
A comparison done by the Sunday Times found that 12-metre shipping containers — twice the size of those used in the project — repurposed in a similar fashion to the ones used in the project cost between R150,000 and R170,000 each.
For further perspective, the trendy 27 Boxes shopping mall in Melville, Johannesburg, made out of shipping containers, cost about R32m to construct, and used about 100 shipping containers.
These exorbitant costs have prompted Vuyiswa Ramokgopa, the new MEC for agriculture in Gauteng province, to halt the second phase of the programme, in which a further R20m would have been disbursed. “It’s very important that we demonstrate impact for every rand that we spend. This is about ensuring that every rand we spend delivers to the people that it’s intended to deliver to.”
The funding is part of a R36m conditional grant from the national department that was spent on an ambitious project to boost subsistence farmers, community co-ops, and budding entrepreneurs in the townships. This would have been through the operators of the retail outlets purchasing fresh produce from their own communities, and then selling on to those who need affordable sustenance in the same area.
Instead, Ramakgopa, who took office in July as part of the government of provincial unity after the May 29 elections, discovered the project has turned out to be nothing more than pie in the sky.
A frustrated beneficiary, claiming to represent others as well, wrote to her office complaining that they had been abandoned by the implementing agent, Farm Yard, a company owned by business-person Busisiwe McCarthy.
Among their complaints were that after signing an agreement for incubation for a period of one year, they were battling to get a hold of Farm Yard, who had invoiced and been paid R2.2m for project management, training, mentorship, and monitoring.
Despite promises that the project would pay for three staff members that each beneficiary hired, these employees were now not being paid, and they had essentially been abandoned.
It’s very important that we demonstrate impact for every rand that we spend. This is about ensuring that every rand we spend delivers to the people that it’s intended to deliver to
— Vuyiswa Ramokgopa, MEC for agriculture in Gauteng province
Further investigation this month by officials in the MEC’s office found that a number of the container shops had been closed for months, while those that were operational reported they were receiving no support from the project. Their speedpoint machines were no longer functional and all had opted to purchase their own stock instead of receiving produce supplied by Farm Yard — allegedly purchased from the Johannesburg Market — as it was often spoilt or sub standard.
Farm Yard was also paid a further R4.5m to purchase an 8-ton delivery truck (R844,410.00), a 5-ton refrigerated delivery truck (R789,820.00), a refrigerated bakkie (R466,854.35), another single cab bakkie (R416,600.00), two double cab bakkies (R707,535.00 and R512,696.00), while the balance went to salaries for drivers, delivery costs, trackers, insurance, as well as licensing and registration.
“It would have been wonderful if this project was at least successful, and people were actually making a living out of it. But the dual tragedy of it is that it has not been able to translate to sustainable economic opportunities for people who desperately need it,” Ramakgopa said.
“R36m of public funds has left the door and we have nothing to show for it except for these structures which have been produced and erected at an astronomical cost. I do believe there is a possibility that we can salvage this project, but if we are to continue, we have to do so with a fundamentally different costing model, and we have to improve the operating model so that it is financially viable for people,” she said.
Contacted for comment, McCarthy refused to speak to the Sunday Times, asking how the reporter had received her contact number.
The MEC’s intervention now means that the R20m approved by the national department to continue support and expand the programme will likely be diverted to other programmes or returned to the national government. But that would only be determined by the national government, which has also asked for a report after she informed them of her decision, Ramakgopa said.
It also places her department at risk of failing to spend, meaning that the money might be lost in the next financial year. She was confident though that she had the backing of provincial government in the move, saying she had briefed Gauteng Premier Panyaza Lesufi and that he had urged her to stop the rot and hold people accountable.
“Although it is important to spend, we want to spend every rand we get, but it has to be spent properly,” she said.
Other than the complaints from beneficiaries, Ramokgopa said officials in the department also flagged some concerns on both the programme beginning with the fact that Farm Yard’s submission for consideration in February 2023 had been late but was still included for adjudication.
“If there is a fault in the system, where projects like this can actually make it through, when even you and I when looking at them at first glance can tell there is something dodgy, and that the numbers don’t make sense, I think it’s important to know where those fault lines are.
“We will be pushing to get accountability, and we will also be engaging with national government continuously,” Ramakgopa said.
The national department of agriculture, land reform and rural development said yesterday it was not aware the containers had cost R1.7m as the business plan they had approved had listed each container as costing R1.1m. It also said the project was affected by delays including the fact that Gdard was still to link the retailers with smallholder farmers on its database, and this was the reason for produce being bought from the market.
“The need to hand-hold and support these beneficiaries still remains,” it said, indicating that it was against putting the project on hold.
Gdard has been involved in controversial contracts before. Last month former ANC spokesperson and MP Pule Mabe was charged with fraud, theft, and contravening the public finance management act relating to a contract in which the department paid his company R26m to deliver 50 converted tuk tuks (motorised transportation scooters) for use by waste pickers as part of poverty eradication projects.
The contract was investigated by the SIU after allegations of financial irregularities and non-delivery were made.
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