A Gauteng consultancy walked away with millions of rand in profit after promising the provincial government it would create 75,000 internships for unemployed youths in the province over three years, but ended up creating just 142 such opportunities.
The contract, awarded without a tender process, was part of the Gauteng government’s Vuthela project, meant to create employment and entrepreneurship opportunities for unemployed youth. It has exposed weaknesses in public-private partnerships and how these could be exploited to take advantage of SA’s unemployment crisis.
The programme, an initiative by the Gauteng Enterprise Propeller (GEP) meant to get young people into the job market, was launched in June 2016 by Lebogang Maile, the province’s then MEC for economic, environment, agriculture & rural development.
It was found in an investigation by the GEP into the project that the contract with Amahlo Consulting had been entered into illegally and had been signed without the authority of the board by then GEP acting CEO Leah Manenzhe.
Manenzhe, who is said to be close to Maile, signed the R65m contract with Amahlo Consulting to create 75,000 job opportunities. However, a few months later, the contract was amended, reducing the job opportunities to 5,000 but keeping the cost at R65m. This, too, was done without going to tender or seeking the GEP board’s approval.
The GEP could only verify 142 internships that had been created by the programme.
According to court documents filed by the GEP at the South Gauteng High Court, the interns were paid a stipend of R1,500 each, netting Amahlo R52m in profit.
The GEP approached the court, demanding that Amahlo pay back R52m. The court ruled in its favour.
Appeal
Amahlo has asked the court for leave to appeal the judgment. The matter is set to be heard on Tuesday.
A GEP spokesperson would not comment on the matter as it is sub judice.
Manenzhe has since moved to the department of human settlements as a chief director, the department to which Maile moved in 2019 after the local government elections.
Business Day has seen a letter written to Maile by the GEP advising him about what their investigations into Project Vuthela had revealed and how Manenzhe was implicated.
In the letter dated March 2022, the GEP says Manenzhe’s conduct breached the Public Finance Management Act. “We understand that Ms Manenzhe remains employed by the Gauteng province and for this reason thought it prudent to draw these serious findings against her to your attention and for you to consider the appropriate action to take,” the letter reads.
Despite a court finding that the deal was corrupt and the findings of the GEP’s investigation, Maile stands by Manenzhe.
Maile is “not aware of any disclosure(s)” made by the GEP against Manenzhe, his spokesperson, Castro Ngobese, said. “It will be premature to comment on a non-existent disclosure or findings. Ms Manenzhe remains a competent and highly dedicated public servant in the employ of Gauteng provincial government,” he said.
‘Poisonous’
“If the alleged disclosure can be shared based on a credible investigative report, MEC Maile will not hesitate to act guided by powers vested in him by various governance legislations, including the law. For a long time, Ms Manenzhe, has been a victim of a number of poisonous and untested allegations in the public domain intended to undermine her reputation and standing.”
When contacted for comment, a receptionist at Amahlo said no-one in the organisation, including the company’s owner, was allowed to speak to the media. Voicemail messages left for Manenzhe went unanswered.
Amahlo’s scheme is similar to the contract entered into by the Unemployment Insurance Fund (UIF) and Thuja Capital in December 2022 that was later canned and is subject to litigation. In that contract, the UIF would pay Thuja R5bn to create thousands of jobs.
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