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In fact, Mphaphuli Consulting (Pty) Ltd charged about R1 000 less to electrify one household than the amount DoE benchmarked for rural areas.

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Sizwe sama Yende

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A parliamentary record has proved that embattled electrical engineer, Lufuno Mphaphuli, did not overcharge government for electrification of rural houses.

Mphaphuli, who owns Mphaphuli Consulting (PTY) Ltd, is being accused by the corruption-busting Special Investigating unit (SIU) of having charged R5 000 more on each household he electrified at Limpopo’s Tubatse Local Municipality (now renamed Fetakgomo Tubatse after re-dermacation of boundaries) in 2016.

The SIU instituted a R76 million lawsuit against Mphaphuli in the Polokwane High Court about five years ago to recover the loss, but the trial is yet to begin.

Mphaphuli Consulting was awarded a contract worth R326.5 million in 2013 to electrify 20 000 households at R16 000 each. The budget for the project, dubbed Operation Mabone, came from the then Department of Energy (DoE) following National Treasury’s approval.

The SIU has claimed in its investigation report that Mphaphuli overcharged. However, the Department of Energy or National Treasury never raised any concern with the company’s charge and are not party to the SIU’s litigation. Even the municipality is not.

MPHAPHULI CONSULTING CHARGED R1 000 LESS

According to minutes of the National Council of Provinces’ (NCOP) Economic and Business Development Committee dated September 10 2013, the Department of Energy’s report presented by deputy director-general, Dr Wolsey Barnard, on the Integrated National Electrification Programme (INEP) was that the “least cost” benchmark for urban areas was R12 000 per household and R17 000 for rural areas.

Mphaphuli Consulting had signed its contract of R16 000 per household on August 29 2013.

“In March 2012,” reads the minutes, “the DoE had held an Electrification Indaba where all the relevant sector departments and stakeholders had been invited to participate. The Indaba had resulted in a consultative working group process through which the relevant stakeholders were involved in defining the new roadmap.  After the technology and funding options had been considered, taking into account future growth, and a mix of grid and non-grid connections, it was estimated that all formal households would have universal access by 2025.”

“The “least cost” benchmark for urban areas was R12 000 per household, and R17 000 for rural areas.   There had been a critical analysis of major infrastructure needs and costs, considering the role, and acceptance, of the independent power producers (IPPs).”

These minutes prove that Mphaphuli Consulting charged R1 000 less than the “least cost” benchmark set by the department.

SIU spokesperson, Kaizer Kganyago, has indicated that he was unwilling to comment about this matter because it was before court.

SIU PLAYS THE MAN

Mphaphuli has been arguing that the SIU expected him to still charge R11 000 per household, which he charged on electrifying houses in the Vhembe district in 2011, five years later when he started connecting the rural houses at the Burgersfort-based Tubatse municipality.

He reiterated to The People's Eye Podcast recently that it appeared as if the SIU was targeting him rather than investigating wrongdoing.

The SIU gave Mphaphuli a notice to investigate him in April 2017 – shortly after he had defeated the Tubatse municipality in the Bloemfontein Supreme Court of Appeal (SCA) on March 6 2017.

The municipality  approached the SCA with the intention to reverse a Polokwane High Court ruling authorising him to attach the council’s assets after they were refusing to pay him R41 million for work done on the project.

“The information the SIU requested appeared not related to the project. It was my banking details and also details of my suppliers. It appeared as if it was an investigation targeting me,” Mphaphuli said.

Mphaphuli has raised a number of concerns about the SIU investigation, such as that:

·      The SIU’s own report says that the unit was asked by the former mayor (Choris Phokane) and municipal manager (Johannes Mohlala) to investigate his company, and not by a presidential proclamation;

·      The proclamation targeted the defunct Tubatse Local Municipality and not the Fetakgomo Tubatse municipality;

·      The R76 million that the SIU is claiming was authorised by three court judgements made in his favour, when the municipality withheld payments, meaning that the SIU was setting a precedent of investigating binding court judgements;

·       No government's accounting official who signed the contract has been identified and accused of assisting Mphaphuli (Pty) Ltd to overcharge the municipality as he could not have done that alone;

NO PRESERVATION ORDER TO ENSURE MPHAPHULI DOES NOT HIDE ASSETS

Mphaphuli has also been saying that the SIU made no attempt to secure a preservation order against his assets since 2017 to ensure that it would be able to recover something from him after the trial. “I’ve invited and reminded them that, guys, have a preservation order against me,” he said.

Kganyago had, in June this year, said that the Constitutional Court had settled the matter. Mphaphuli had applied for the review and setting aside of the SIU’s report.

“The SIU welcomes the decision of the Constitutional Court, as it now settles the question of whether the SIU was empowered to investigate the electrification of villages under Greater Tubatse Municipality and paves the way for the civil claim against the engineering company to recover approximately R76 million to commence in the Limpopo High Court,” he said.

The court did not deal with the merits of the case. Even though the Polokwane High Court had dismissed Mphaphuli’s application, it did mention that the report was defamatory.

Mphaphuli received the SIU’s report three years after it was complete and was shocked to realise that no government official was ever interrogated to answer how his company was allowed to overcharge.

The SIU instituted its civil claim in 2017. It recently opposed Mphaphuli’s intention to amend his court papers to incorporate information he received after obtaining the report in December 2020. Mphaphuli’s filed his papers in 2018 and was not aware that the investigation report had been completed and submitted to President Cyril Ramaphosa.

Mphaphuli has since lodged a R1.8 billion civil claim against the SIU for defamation and loss of business.

For seven years, Mphaphuli has been trying to draw the attention Ramaphosa, Parliament and the Public Protector to prove that the SIU’s claim that he overcharged was not substantiated.