R95 million Aerospace Village still a vacant plot 7 years after launch

The Centurion Aerospace Village (CAV) is still an empty plot, seven years after its initial launch, according to the Democratic Alliance.

Shadow deputy minister of economic development, Patrick Atkinson, said on Thursday that the CAV was meant to be a primary incubator of innovation and opportunity for growth and job creation.

Initiated by the Department of Trade and Industry in 2006,it would see the development of a strategically located high-tech manufacturing, aero-mechanical and defence cluster adjacent to the Waterkloof Airforce Base in Centurion, Tshwane.

The aim of the centre was  to create a sub-tier supply chain to integrate the local aerospace and defence companies into the global supply chains and becoming suppliers of choice to Original Equipment Manufacturers (OEMs) such as Boeing, Airbus, Spirit Aviation and Labinal.

“The potential this project had to create thousands of high-skilled niche job opportunities cannot be overstated, as the village was set to become a key feature of the South African aerospace industry.”

At the official “launch” of the CAV in 2008, then Minister of Trade and Industry, Mandisi Mpahlwa, was full of optimism and declared that “not only will a significant number of jobs be created, but also the integration of small companies into the industry will be advanced significantly,” Atkinson said.

“Sadly, all that exists 7 years later is a vacant plot of barren land, characterized only by a few piles of sand and enclosed by a rusted barbed wire fence.”

The DA said it submitted a parliamentary question to the Minister of Trade and Industry, Rob Davies, asking the annual breakdown of the costs of establishing the CAV since its inception. The figure totaled R95 million.

It said that it submitted a further parliamentary question asking the minister who the first so-called tenant was that allegedly moved in to the village in January 2012, in which he responded by saying Aerosud.

However, a senior executive at Aerosud denied the claim, stating that Aerosud is a private company that has owned the land which is adjacent to the CAV for the past 15 years and does not form part of it.

“The same reply revealed the existence of a DTI mandated forensic report following a forensic investigation by private company Nexus, into the financial and administrative irregularities at the CAV.”

“After an application in terms of the Promotion of Access to Information Act, the DA was furnished with a heavily redacted and censored forensic report. Despite efforts by the DTI to erase the names of implicated companies, contractors, and department officials, the report still finds maladministration and unauthorized expenditure running into the millions under the DTI’s watch,” Atkinson said.

The DA said that the report, which is dated 18 June 2014, makes an array of damning findings ranging from financial irregularities to possible tender fraud and corruption.

The report also makes recommendations that both CAV and government officials be held civilly, and in at least one instance, criminally liable.

The report revealed the following:

Reckless tender appointment – 11.89 of the report

The forensic report makes several damning findings, including a R65 million tender for bulk earthworks and infrastructure being irregularly awarded as 10 of the 11 bidders were disqualified for spurious reasons.

The report states that the reasons for disqualification of other tenderers (10 of the 11) will “not withstand scrutiny if challenged in a court of law in terms of the Promotion of Administrative Justice Act (PAJA).” The disqualifications border on “reckless behaviour” and the report recommends the contract be immediately rescinded.

The report established that the works were suspended in June 2011 for failure to comply with section 217 of the Constitution in ensuring a procurement system that us fair, equitable, transparent, competitive and cost effective.

Regulation 30 of the CID (Construction Industry Development) regulations makes any person or organ of state that fails to comply with these regulations or awards a construction works contract contrary to these regulations guilty of an offence and is liable to a fine not exceeding R100 000.00.

The forensic report recommends that the DTI institute criminal charges against the relevant individuals for contravention of this regulation.

Appointment of service providers – 7.3.11 of the report

The investigation could not locate approval by any of the three decision-making bodies of the CAV – the Board, the EXCOM, or Management – for the appointment of 5 service providers to the approximate value of R84 998 950.10.

Recovery of R642 698.82 unaccounted funds spent – 6.2.5 of the report

It was found that the CAV was in contravention of section 12.4 of the MOU it signed with the DTI as it could not provide invoices or cheque stubs for a total amount of R 642 698.82. In other words, this expenditure cannot be accounted for. The report recommends that the DTI recovers the unaccounted amount of R642 698.82 from the CAV.

Fraud and corruption charges – 11.104.2 of the report

The report found a reasonable suspicion of fraud and corruption in total expenditure on catering to the value of R1 142 177.02. It was recommended that in terms of section 34 of the Prevention and Combating of Corrupt Activities Act, the DTI has a legal duty to report this to the South African Police Service (SAPS).

The DA further pointed out that according to minister Davies, a “turn-around strategy” has subsequently been put in place, including the imminent appointment of a suitable CEO, and the strengthening of the Board.

It called on the minister to get to the bottom of where the R65 million spent on bulk earthworks and infrastructure has gone as there is nothing to show on site.

“The CAV is often highlighted in presentations to both the committees on Trade and Industry and Economic Development as one of this government’s success stories. This is entirely disingenuous as we can with our own eyes today that not only is this project a complete flop, but has also become another trough from which ANC cadres can feed while 8.4 million South Africans remain trapped in unemployment,” Atkinson said.

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R95 million Aerospace Village still a vacant plot 7 years after launch