Nkandla report: Payback time, Zuma

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President Jacob Zuma has derived “substantial” personal benefit from works that exceeded security needs at his Nkandla homestead and must repay the state, public protector Thuli Madonsela has provisionally found.

Cabinet members have justified the tax millions splurged on Nkandla, saying it was essential in providing Zuma with appropriate security.

But a swimming pool, visitors’ centre, amphitheatre, cattle kraal, marquee area, extensive paving and new houses for relocated relatives were all improperly included in the security upgrade at “enormous cost” to the taxpayer, Madonsela found.

AmaBhungane calculates that cost at nearly R20-million.

And, what may be Zuma’s greatest embarrassment since taking office, Madonsela’s provisional report recommends that Parliament must call him to account for violating the executive ethics code on two counts: failing to protect state resources, and misleading Parliament for suggesting he and his family had paid for all structures unrelated to security.

Zuma told Parliament last Novem­ber: “All the buildings and every room we use in that residence was built by ourselves as family and not by government.”

Madonsela’s report is provisional as she has yet to give the interested and affected parties, including Zuma, a chance to comment, which may affect her findings. Its working title is Opulence on a Grand Scale – apparently from a complaint made by a member of the public. Her findings include that the upgrade constitutes exactly that.

The release of the report has been delayed by the security cluster and public works ministers’ attempt earlier this month to interdict her from releasing it pending the resolution of their “security” concerns. This has raised fears that Madonsela may be prevented from reporting her full findings.

AmaBhungane has learnt key features of the report from sources with direct access to it but who cannot be named due to sensitivity over leaks. Her findings are corroborated by over 12 000 pages of evidence amaBhungane obtained through access-to-information litigation from the department of public works, which implemented the upgrade.

Key allegations in the report include:

  • Costs escalated from an initial R27-million to R215-million, with a further R31-million in works outstanding;
  • There was “uncontrolled creep” of the project’s scope after Zuma’s private architect, at Zuma’s behest, assumed a second hat as the public works department’s “principal agent”. This meant he was conflicted, serving two masters with divergent needs;
  • Another four firms that Zuma had privately engaged for his own work were taken on by the department without following tender procedures.

AmaBhungane estimates that the Zuma appointees were paid more than R90-million by the state;

  • There were unsuccessful attempts by the department to apportion non-security costs to Zuma. Madonsela could not determine whether a document apportioning the costs reached Zuma;
  • The Nkandla upgrade was “acutely” more expensive than public works expenditure at previous presidents’ private homes, by far the most expensive of which was Nelson Mandela’s at R32-million (see graphic); and
  • Even genuine security measures, such as 20 houses for police protectors, a clinic and two helipads were excessive and could have been placed at the nearby town to benefit the broader community.

Security assessment

Madonsela does not share concerns about the R100 000 cap the Ministerial Handbook places on security upgrades at the private residences of members of the executive. She finds that its prescripts do not apply to the president and his deputy, whose needs are regulated by a 2003 Cabinet policy, among other measures.

A police security assessment in May 2009, after Zuma’s swearing in, and her own inspection in August this year confirmed a genuine need for a security upgrade.

Following the initial police assessment, the public works department estimated the upgrade at about R27-million.

But two factors intervened, both in August 2009: Zuma started building three new houses, necessitating further security, and his private architect was introduced to the department to become its principal agent for the entire upgrade.

Madonsela finds the latter resulted from Zuma’s “political interference”.

Zuma’s team

Her report quotes public works officials as saying they were told Zuma wanted the architect, quantity surveyor, engineers and building contractor he had engaged for his private work appointed by the department for the security upgrade.

Zuma, according to a statement from the architect, attended when his service providers were introduced to the department. Like all other contractors and consultants on the upgrade, the department engaged them without tender.

AmaBhungane calculates, based in part on the documentation it obtained, that the state paid Zuma’s team more than R90-million, including R16.6-million for the architect, R13.8-million for the quantity surveyor and R56.3-million for the builder. This is more than 40% of the total cost.

Madonsela places much blame for the eightfold cost escalation to R215-million on the architect, Minenhle Makhanya, who precipitated “uncontrolled creep” of the scope of the upgrade. He declined to comment for this article.

Makhanya was conflicted, Madon­sela finds. As the department’s prin­cipal agent, he was supposed to ensure legitimate security works were implemented cost-effectively but, as Zuma’s private architect, he was supposed to satisfy the latter’s needs.

He allegedly remained directly in contact with the president, discussing designs with him.

Aggravating the conflict, Madonsela says, is that Makhanya’s fees were calculated as a percentage of project spend – an incentive to expand the scope of the works.

Wagging the dog

In the end, Makhanya became the tail that wagged the state dog. The police security experts made some proposals but the design was largely left to Makhanya, who was no security expert.

Madonsela cites the underground security bunkering and sheltered walkways as an example. The original cost estimate – admittedly before there were three more houses – was R500 000. After Makhanya’s introduction, this increased to about R8-million. Eventually R19.6-million was spent.

Madonsela says that Makhanya struggled to explain to her why the security upgrade needed to include elements she ultimately found improperly benefited Zuma – the swimming pool, visitors’ lounge, amphitheatre, kraal, paving and the relocation of some of the presidents’ relatives.

The relatives who had humble rondavels near Zuma’s homes, were apparently because Makhanya felt the security fence should not meander around them. R7.9-million was spent building the two affected families a collection of new rondavels beyond the perimeter fence.

A public works progress report from June 2010, among the documents amaBhungane obtained, places responsibility at Zuma’s door, saying that “it is understood that the owner/owner’s representative negotiated with the families” and agreed to provide each with four rondavels, palisade fencing, an access road, paving, water and electricity connections and a cattle kraal.

The report’s author expressed uncertainty whether this should accrue to the state or Zuma, and sought guidance.

Madonsela finds that the relocations did not fulfil a true security need, was “unlawful” and improperly benefited the presidential family.

Excessive

Other items she found exceeded security needs and unduly added value to the president’s private property are, as costed by amaBhungane:

l The swimming pool, which aerial photographs show as a large, oblong-shaped feature at the centre of an extensive paved area covering basement garages.

The public works documentation amaBhungane obtained refers to it as a “fire pool” on the pretext that it doubles up as a water reservoir for fire-fighting purposes, although photo­graphs show a large water reservoir higher up the hill.

The minutes of a progress meeting in June 2011 show that Makhanya was to “meet with the principal [Zuma] and present the fire pool”.

An early estimate costed the pool at about R550 000 but it and the basement parking ultimately came to R2.8-million;

  • The visitors’ centre, which shares a building with a control room. An earlier estimate for the “visitors’ centre and lounge” came in at about R5.4-million but the “visitors’ centre and control room” ultimately came in at R6.7-million;
  •  The amphitheatre – a large stepped area overlooking an open space for performances. It appears not to have been costed separately and forms part of R68-million in “general site works”;
  •  The cattle kraal, including a chicken coop. The department’s original cost estimate provided for an existing kraal in the residential complex to be “revamped”.

But later pictures show an entirely new, much larger kraal, complete with a reinforced culvert going under the perimeter fence. AmaBhungane could find no separate costing for the kraal, but a March 2011 estimate put the culvert at R1.2-million; and

  • Extensive paving and a marquee area, which appear not to have been costed separately.

Repayment

The figures above, starting with the R7.9-million for relocations, approach R20-million.

Madonsela does not attempt a similar costing exercise but finds that the value of Zuma’s private property was unduly increased and that he must repay a “reasonable” amount to the state, based on the cost of non-security items.

She does not resolve why attempts by officials to allocate some of the costs to Zuma came to naught.

The documents obtained by ama­Bhungane show that the department’s own professional team complained in December 2010 about the runaway costs, with one official writing about estimates having “almost doubled” and the need for a budget to be “established and confirmed”.

The same official also writes: “Any grey areas in terms of apportionment of costs must be identified, discussed and resolved. Items which are essential and items which are ‘nice to haves’ and therefore not necessarily required for this project, must be discussed.”

Allocations

As of January 2011, there were several iterations of cost allocations, initially apportioning R7.9-million to Zuma. Two months later, in March, the department’s Durban regional manager brought the results of a third allocation exercise to the attention of his minister and her deputy: R10.7-million to Zuma.

The manager sought authority from them to proceed with these works, “as it falls outside the scope of security measures”, and suggested discussing it with Zuma.

Incidentally, Madonsela finds that the professional team was sidelined that same month, supposedly on head office instructions.

The next month, June, a fourth cost allocation exercise reduced Zuma’s portion to R3-million, ama­Bhungane’s documents show.

Madonsela says that the then deputy minister, Hendrietta Bogopane-Zulu, was also sidelined after asking questions about costs and apportionment. Zuma shifted her to become deputy minister of women, children and persons with disabilities in October that year.

Madonsela finds there is inconclusive evidence for whether the apportionment calculations reached Zuma. However, implicit in her conclusions is that, by the time she completed her provisional report, Zuma had not repaid a cent.

His office has never responded to detailed questions about the upgrade, including apportionment, and had again not done so at the time of going to press. – Reporting by Stefaans Brümmer and Lionel Faull


Zuma's say-so sent millions to his annointed Nkandla contractor

President Jacob Zuma's intervention halfway through the security upgrade at Nkandla channelled an extra R20-million to two contractors, one of whom had been his own private builder before government work began.

Although Zuma allegedly justified himself on the basis that he did not want different contractors on his premises for a new phase of construction, the bulk of this work was to accommodate a sizeable police VIP protection contingent on government property removed from his homestead.

This flies in the face of the distinction that the parliamentary joint standing committee on intelligence tried to make this month between the upgrade on Zuma's private land and construction on adjacent land belonging to the public works department, and where the additional R20-million was spent.

"Neither these buildings nor any of the security features to be found on the state-owned property belong to the president," said the committee's report to Parliament earlier this month. "It should therefore be noted that over 52% of the costs of the security upgrades went to the state-owned property."

On the contrary, Zuma's documented request to retain the previous contractors led to their appointment by the state to take on the additional work – to build 20 new police houses at a staggering R1-million per house.

Building contractor Moneymine, which Zuma had previously commissioned as his private builder, got the lion's portion of this work.

Zuma made his demand through then-deputy public works minister Hendrietta Bogopane-Zulu in December 2010, when the department was considering how to undertake phase two of the upgrade.

On December 16, the project's quantity surveyor advised the department of two possible ways of dividing up the work for phase two. The surveyor suggested that Moneymine and co-contractor Bonelena could continue doing security work within the homestead while a new contractor built the police accommodation elsewhere.

The other option, the surveyor proposed, was for Moneymine and Bonelena to share the police accommodation contract between them, in addition to the work assigned to them on Zuma's property.

The surveyor recommended the latter option, although they also raised a concern that Bonelena had struggled to deliver during phase one.

The clincher, however, appears to have been Zuma's demand to keep new contractors out.

According to the project manager's procurement report that later justified the decisions made by the department: "A meeting was held with Deputy Minister Bogopane-Zulu … on December 21 in which she confirmed that the Principal [Zuma] indicated that he does not want other contractors on site in Phase II opposed to Phase I."

In January 2011, the department appointed Moneymine and Bonelena to do all the work on both the properties. – Reporting by Lionel Faull & Stefaans Brümmer

* Got a tip-off for us about this story? Email amabhungane@mg.co.za

The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.