31 October 2022
This abandoned drug rehabilitation centre in Kuruman, Northern Cape, is one of the projects that will finally be completed. Archive photo: Raymond Joseph
Abandoned infrastructure projects funded by the National Lotteries Commission, including four old-age homes and a drug rehabilitation centre, will finally be completed, years after tens of millions of rands intended for their construction were looted.
The National Lotteries Commission (NLC) has allocated nearly R65-million to finish several multi-million rand infrastructure projects that were left incomplete after Lottery grants went missing.
These funds will be paid directly to the engineering firms commissioned by the NLC instead of the non-profit companies (NPCs) or non-profit organisations (NPOs) that were initially supposed to fund the projects.
Details of additional funding for the unfinished projects, which are all currently being investigated by the Special Investigating Unit (SIU) and the Hawks, are included in the NLC’s latest annual report, which was presented to Parliament by its new board last week.
Over R240-million, including the latest grants, has now been allocated for these projects in need of completion.
Most of these unfinished projects initially received “proactive” funding, which was at the heart of the looting of the Lottery and has now been suspended. Proactive funding allowed the NLC to identify projects to fund without first receiving an application, and to identify and appoint an NPC or NPO to run the project. This resulted in dodgy, often hijacked, NPCs or NPOs with no experience of construction being put in charge of multi-million rand projects which were never completed.
NLC spokesperson Ndivhuho Mafela told GroundUp that “the NLC took a decision to oversee the completion of these projects directly through its own panel of engineers. The Special Investigating Unit was engaged on completion of the projects and did not oppose such action.”
The additional funds were not paid to any of the non-profit companies that were originally funded. The NLC’s annual report identifies the new funding with the names of the organisations originally funded, but this is only for reporting purposes.
Instead, the latest grants will be “controlled” by the engineers tasked with completing construction of the various projects.
The unfinished projects which have received additional funding are:
The NLC has decided not to complete an old-age home in Maila Village in Limpopo, where Mushumo Ushavha Zwanda, a hijacked NPO, was used to steal millions of rands from the Lottery.
Grants worth R27.4-million were used to begin building the old-age home, but the NLC decided that it is beyond repair. When GroundUp visited the home earlier this year, the buildings were in a very poor state. There were no roofs, doors or windows, and the buildings had been abandoned to the elements and left to rot.
No additional funding was allocated for Denzhe Primary Care, a hijacked NPO, which received R27.5-million for the construction of a drug rehab near Pretoria. SkX estimated that only R4.8-million of this was spent on the rehab’s construction.
“House of Mercy and Denzhe are at the heart of the SIU investigation and we would like to await the outcome of that process,” said Mafela.
Mat Cuthbert, the Democratic Alliance shadow minister for Trade, Industry and Competition, who played a key role in Parliament in exposing the rot at the NLC, welcomed the decision to complete the projects.
“We are satisfied that [the NLC] took the appropriate steps to ensure that these organisations were not given the opportunity to misuse any more lottery funding and we are hopeful that the new leadership at the entity will continue to act prudently in this regard,” he said.
The NLC’s annual report should have been completed last year but was delayed due to misstatements and other issues found in the financial statements. It was finally completed in February this year, when the Auditor-General issued a qualified audit opinion, after extensive back-and-forth with the NLC, which had contested some of the findings.
Mafela told GroundUp that the NLC was in the process of placing Zibsilor, Matiene, Nunnovation, WAR_RNA, Abrina and Ubusu and their directors on its internal delinquency list so that no further funding would be advanced to these organisations or their directors.
“The NLC is currently reviewing all pro-actively funded projects for the 2021/22 financial year. Any irregularities identified will be referred to law enforcement agencies and recovery of funds will ensue,” said Mafela.