Details of the fraught relations between the Coega Development Corporation and the Bhisho health department have emerged in a trove of secret documents which contain allegations of bullying, bribery and corruption.
The paper trail gives insight into a lengthy dispute which pitted Coega and Bhisho bosses against each other and placed the agency under financial pressure in recent years.
At the centre of it was the department’s infrastructure chief director, Mlamli Tuswa, a man Coega claimed was the mastermind behind a dodgy scheme to siphon money from the department via the agency.
Coega was the department’s implementing agent hired to manage the planning, construction and maintenance of clinics and hospitals in the province.
Tuswa, who is undergoing an internal disciplinary hearing for alleged bribery, represented the department in its dealings with Coega. He refused to comment when the allegations were put to him.
In various internal documents seen by The Herald, it is alleged that as far back as 2014, Tuswa illegally instructed Coega to award tenders to his preferred companies.
When some Coega project managers refused, Tuswa allegedly bullied them until they quit that position.
Coega claimed that when he did not get his way, Tuswa withheld payments owed to the agency for work done.
In response to questions, Coega spokesperson Ayanda Vilakazi said: “There is no doubt that Tuswa believed, and said as much, that he enjoyed administrative and political protection, and that his position within the department was impenetrable.
“This he communicated to the CDC in writing.”
In one of the e-mails sent at the height of the tension in 2015, Tuswa warned Coega officials of his power.
The e-mail reads: “First, nothing gets done without my knowledge and approval.
“I have single-handedly allocated over 70% of [the department] portfolio against provincial aspiration and thinking (sic).
“Perhaps this is a confirmation that Coega does not have the required capacity to drive future projects in the EC.”
In another e-mail, dated April 22 2016, Tuswa wrote to Coega CEO Pepi Silinga: “Mr Silinga, if you want to have a fight with me, please declare such with me directly.
“Let’s not use, abuse and misuse our access and proximity to state levers.
“I am inviting you to fight me directly.
“I am more than willing to take you on, on any day of the week and on any platform.”
Coega’s contract with the department ended in 2016, but the agency sued the department in 2017 to recover R159m in unpaid fees.
In a sworn affidavit in October 2017, Coega chief financial officer Lionel Billings claimed that weeks before, he had bumped into Tuswa at the Engen garage in King William’s Town, where Tuswa suggested that he would not pay the agency because he had a problem with Silinga.
“While standing at the counter of the Wimpy restaurant, I bumped into Mr Mlamli Tuswa
“I asked Mr Tuswa to pay Coega its long outstanding management fees, to which he responded that he had the money but that the CDC’s problem was ‘your man’.
“I understood the reference to ‘your man’ to mean that he was referring to the CEO of the CDC,” Billings said.
“Mr Tuswa stated that for the prevailing standoff between the department and the CDC to be resolved, it could be best for both him and ‘your man’ to not be around.
“I again restated my position that I did not understand the politics and repeated my request for him to process the payment for the outstanding monies owed to the CDC.”
In August, Coega was awarded through arbitration and the department paid R150m on September 11.
In a report to the portfolio committee on health, Coega claimed that, at the time, it had changed at least four “highly capable” project managers because Tuswa had made it impossible for them to work with him.
One of the Coega managers only lasted four months before being moved elsewhere.
“By this stage, Coega concluded that the dysfunctional relationship between the department was not occasioned by a weakness from its side, but due to the management style of the department’s unit head [Tuswa],” the report said.
“[This style] Coega employees found was intolerable with bullying [and] inclined to disregard processes.”
The situation stabilised when Coega placed senior programme manager Gift Honi in the position to work with Tuswa. Honi eventually resigned in 2016 after Nkoliso Flatela, chief executive of Zamazondo Construction, alleged that he had been asked by Honi and Tuswa for a bribe in exchange for Coega contracts.
In a sworn statement being investigated by the Hawks, Flatela admitted to paying a R50,000 bribe to Honi, gifting a Toyota Fortuner to a friend of Tuswa’s and also employing the same man on a monthly salary of R30,000.
Tuswa declined to comment on this allegation while Honi vehemently denied accepting any money from Flatela.
Vilakazi said all decisions were centralised in Tuswa’s office.
“He would initiate a project, set the timeframes, seek to influence the selection of service providers to implement the project, direct which invoices will be paid and which ones would not be paid,” he said.
Vilakazi said Tuswa would at times use a private e-mail address to conduct work for the department.
“This constitutes a bedrock for improper conduct, with the official knowing that it is beyond public scrutiny as it is private.
“This permits issuing of unlawful instructions, without the deterrent of recourse by the department.”
Top-level meeting tackled stalemate
Minutes of a confidential meeting in Bhisho a year ago reveal how the provincial Treasury was roped in to mediate in a volatile stalemate between Coega and the Eastern Cape health department.
Attending the meeting in the Treasury boardroom on August 30 2017 were Coega CEO Pepi Silinga, then finance MEC Sakhumzi Somyo, then health MEC Phumza Dyantyi, her department head, Dr Thobile Mbengashe, and provincial Treasury boss Daluhlanga Majeke.
Somyo had been asked by the budget cabinet committee to mediate after Dyantyi had complained to the committee about Coega.
The minutes show that Dyantyi had told the committee that Coega’s performance in implementing infrastructure projects was poor and intolerable.
She told the committee this was why Coega had been fired from similar contracts with the KwaZulu-Natal government.
She had reported that the agency had refused to account to the department and had ignored her letters.
As a result, Dyantyi’s department was asking for permission to also fire Coega.
In response, the minutes show that Silinga stated that there was never correspondence from Dyantyi or Mbengashe requiring Coega to account on its performance.
He said that an electronic scan through the agency’s communication platforms had confirmed beyond reasonable doubt that Dyantyi had never written to Silinga about this.
According to the minutes, Dyantyi then confirmed that she had, in fact, never written to Silinga and that there was miscommunication.
Dyantyi and Mbengashe also told the meeting that Silinga had failed to deliver on an undertaking to present them with allegations of irregularities against the department’s infrastructure head, Mlamli Tuswa, as agreed at an earlier meeting in Port Elizabeth.
Silinga responded that he had, in fact, sent the report on Tuswa to Mbengashe as promised and that e-mail transmissions had shown that it was delivered to his e-mail.
Silinga stated further that subsequent engagements with Mbengashe were based on a mutual understanding of Coega’s allegations against Tuswa.
Silinga said this was precisely why, in an apparent reluctance to act, Mbengashe had suggested that Coega, rather than the department, should lay criminal complaints against Tuswa.
Silinga then listed bribery and corruption allegations against Tuswa, including:
● An attempt to create a favourable outcome for four companies to secure work;
● Supplying misleading information about a company to ensure it received a tender;
● Using his position to disadvantage certain consultants hired by Coega; and
● Contractors allegedly paying for his wedding to secure work.
Tuswa, who is undergoing a disciplinary hearing for the bribery claims, refused to comment on all the allegations put to him by The Herald.
Dyantyi, who is now the social development MEC, also refused to comment, saying she was no longer with the health department.
Responding to claims that Coega had been fired by the KwaZulu-Natal government, Silinga told the meeting that this assertion was “patently false” and that the KwaZuluNatal education department had, in fact, rated Coega the best implementing agency.
It was agreed that Coega had to supply the department with documents proving the allegations against Tuswa of corruption, bribery, extortion and the solicitation of favours in return for contracts.
“[The Treasury] reviewed the documents and concluded there was basis for a formal investigation by external and specialists parties,” the minutes read.
Silinga told the meeting that the health department had meddled with tenders and withheld Coega’s authority to proceed with 23 projects.
As a result, he said, it was, in fact, the health department that had caused the delays it had accused Coega of being responsible for.
Asked for comment, Mbengashe described the relationship between the two entities as strategic and cordial.
“The department regards Coega and its leadership as credible and a professional body with respected governance and ethical behaviour.
“The issue of staff members acting outsider the policy and compliance regime is a matter that both organisations [take] seriously.
“The issue of [fraud] allegations against officials of the department was raised by Coega, and the department and the agency agreed to ask the provincial Treasury to investigate.
“The forensic investigation was conducted and a report was submitted to the provincial Treasury, and the department was afforded the findings and recommendations of the forensic investigation.”
He said this had resulted in disciplinary action against an official.
“The department takes in very serious light any acts of corruption or [misappropriation] of state funds and when these are raised with the department, we will actively pursue and prosecute anyone implicated without fear or favour within the boundaries of existing laws and legislation.”
Provincial Treasury spokesperson Pumelele Godongwana said the department had tried to mend the rift between the two entities.
“[We] provided a feasible solution which, ultimately, when the other party [Coega] was not happy with the implementation of that resolution, the matter was taken to court.”