A company contracted by Public Works to build a courthouse for R285m was replaced at the final stretch — with just R10m in work outstanding — and the project given to another company that was paid R116m to complete the job.
And it took that company 10 years, with the Port Shepstone building only finished late last year at a total cost to taxpayers of a whopping R393m.
This project was among more than 1,000 that the national department of public works & infrastructure (DPWI), in its own internal reports, says are currently incomplete, indicating poor project management, possible corruption, and leading to hundreds of millions of rand in wastage.
The reports, including those handed to public works Minister Dean MacPherson last year, also show that the department lost a further R1bn over the last five years due to incomplete projects, late completion, stolen materials and disputes with service providers.
The Magistrate’s Court project was awarded to the construction giant Basil Read in 2014. But the company walked away in 2018 due to unpaid fees by the department. At that time, the project was more than 90% complete, according to certified payments and site meeting minutes seen by the Sunday Times.
Most of the bigger clients like Correctional Services are now preferring to work directly with the implementing agencies like DBSA due to poor service delivery by the department.
Less than R10m was left in the project budget, and minutes of the last site meeting show that Basil Read was then busy testing water reticulation, and only the external works and landscaping were outstanding, at 80% complete. At that stage Basil Read had been paid R277m. A new contractor Musan Trading Company was then tasked with completion of the project.
Another project listed in the reports is a Sarah Baartman Centre of Remembrance in the small Eastern Cape town of Hankey in Sarah Baartman District, which remains incomplete 11 years after it began, and has been through 10 different construction companies with costs currently standing at R208m against an initial budget of R164m.
The project stood at 37% completion last year, and has now been handed over to the Development Bank of Southern Africa (DBSA) to ensure it is finished.
“Most of the bigger clients like Correctional Services are now preferring to work directly with the implementing agencies like DBSA due to poor service delivery by the department,” one report states.
So bad is the situation that the department itself is unable to house 1,500 of its own staff at head office as well as in the regions, and spends about R6,3m each month on leases to accommodate them. It’s headquarters, Public Works House, remains unoccupied after staff were evacuated due to occupational health safety concerns in 2011, and never occupied again.
It has now fallen into a state of disrepair, and has been vandalised though DPWI has spent more than R17m on physical guarding and technology to protect the building. DPWI spokesperson Lennox Mabaso said MacPherson finds the monthly spend on leases to be “wholly unacceptable”.
“He has reason to believe that collusion and corruption may have occurred in awarding these lease agreements, leading to inflated costs.
“The minister also finds it strange that Nehawu [the National Education, Health, and Allied Workers Union] led a march to the minister's office demanding that these expensive leases are signed.
“As a result, the minister requested the Special Investigating Unit (SIU) last year to motivate for presidential proclamations to investigate allegations of mismanagement and irregular payments related to lease contracts with private landlords, as well as irregularities in emergency maintenance payments,” he said.
Other projects include the upgrade of the Diepkloof Prison in Johannesburg, which was awarded in 2020 at a price of R102m over 24 months. The current costs on this project are at R139m.
“It boggles the mind,” a senior government official with direct knowledge of the DPWI situation said. “The project was electrical and mechanical works and to date R120m has been paid and final completion has not been achieved.”
In response to questions from the Sunday Times on the Port Shepstone project, Basil Read said it was forced to cancel the project in 2018 after a dispute with the department over nonpayment of R29m for work that was done and certified by the site consulting engineers. The money was eventually paid two and a half years later after Basil Read went to court.
“During the entire period from contract cancellation to receipt of payment, the project remained unfinished,” Basil Read’s business rescue practitioner Siviwe Dongwana said.
“After a meeting with the department in June 2021 and at Basil Read’s initiative, an approach was made to the department for Basil Read to return to site and complete the works, subject to certain amendments to the existing contract taking cognisance of the current status of the project.
“Advocate Wassenaar SC acted as mediator in these discussions which resulted in the parties jointly agreeing the terms of a draft Heads of Agreement for consideration. “Subsequently, and in bad faith, the department unilaterally introduced further terms into the draft, never discussed at the time, and the mediation ultimately failed,” he added.
There is a long-standing culture where there is a lack of pride, care and failure to maintain even its own buildings. It is endemic to the organisation and must be rooted out
— Lennox Mabaso, department of public works & infrastructure spokesperson
At the time Musan was appointed to take over the Port Shepstone project in 2022, its own project — the R339m, three-year construction of the Soshanguve Magistrate’s Court in Pretoria that started in 2019 — was also running late, and remains unfinished some two and a half years after the November 2022 finish date.
Project costs currently stand at R365m. Despite this, Musan continues to get additional work from the department, prompting complaints from insiders who allege the contract has been irregularly extended.
An anonymous insider said contracts for construction projects made it compulsory for DPWI to impose penalties at a daily rate for late completion of projects. “DPWI officials instead awarded the contractor an extension of time way into 2025.
“DPWI continues to award huge contracts to this company, the most recent being an R80m contract to repair and waterproof the DPWI head office in Pretoria,” the insider said.
Musan does not have much of a public profile, and it's website does not list any information about its leadership team.
The company's sole director Mapula Maponya, 39, did not respond to a request for comment sent three weeks ago, while DPWI spokesperson Lennox Mabaso said the R108m paid to the company on the Port Shepstone project was due to outstanding works not completed by Basil Read, additional requested scope, and client-driven changes”.
On the Soshanguve court increase, he said: “The figure has since increased due to approved CPAP (Contract Price Adjustment Provisions) escalations and additional client-requested scope, such as ICT installations, which were not in the original brief.
“The project is currently 94% complete, with snagging under way.
“When Minister Macpherson entered office a year ago, he lamented the poor state of the department’s buildings, including that of its headquarters. A month after his appointment, the minister conducted an oversight visit to the Telkom Building complex, where he expressed his dissatisfaction that officials had allowed the building to be vandalised despite R900m being spent on it over 10 years,” Mabaso added.
“There is a long-standing culture where there is a lack of pride, care and failure to maintain even its own buildings. It is endemic to the organisation and must be rooted out.”
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