Valuable friends

Jozi DA embraces ANC crony with R100m tender.

The City of Johannesburg, led by the DA, has quietly awarded a tender of nearly R100 million  to a company which eight years ago they accused of being part of the ANC’s “crony” capitalist machine of tender rigging, jobs-for-pals, and substantial backhanders. And they don’t want anything said about it.

eValuations Enhanced Property Appraisals has won the right to value nearly 900,000 properties in Johannesburg for the General Valuation Roll 2018 (GV2018). They were awarded the tender through what appears to be a dodgy process pushed through just days before the ANC lost power in the metro.

The bid was then processed and subsequently awarded by the DA-led council.

eValuations only won the contract when the first tender (under Bid A654, in which eValuations was the third-lowest bid, with the worst BBB-EE scorecard) was mysteriously withdrawn and then re-issued and re-advertised as Bid A683. When the bids came in on this round, lo and behold,  eValuations came in as the lowest bid.


The sizeable Melrose Arch development was valued at R0

The only confirmation that the tender had been awarded to eValuations came as a passing remark in an off-chance telephone conversation with a strategic advisor to the Joburg council. The advisor promised to email Noseweek formal comment, but never did.

eValuations’ founder, a known ANC backer and KZN Teflon Club member who has been fingered in questionable contracts in Durban, is Willy Govender (nose203).

Govender once boasted in a 2011 interview with Entrepreneur Magazine that “90%” of his growing business empire’s work was from “the public sector” and that they already had a turnover of R250m which he hoped to grow to R1 billion by 2016.

In February 2009 Helen Zille, then DA leader, said eValuations and Willy Govender were part of “closed, crony politics” and that Govender had been awarded the valuation contract in Durban in 2008 because he was “a well-known backer of the ruling party”.

Noseweek revealed in August 2016 (nose202) that eValuations had conveniently under-valued the properties of Johannesburg’s elite, including billionaires such as the Guptas, the Oppenheimers, Johann Rupert, Tokyo Sexwale, property tycoon Douw Steyn and Angolan warlord Bento dos Santos Kangamba. Not to speak of providing valuations of nil for billion-rand developments such as Melrose Arch – as in the General Valuation Roll of 2013 (GV2013).

These “discrepancies”, such as with Johann Rupert’s valuation which was set at R0 then re-valued to R88.8m, and a Gupta-owned property that changed from a valuation of R480,000 to one of R22m – were uncovered by Howick pensioner and maverick tax crusader Dr Robert McLaren (noses 202; 203 & 207). Later, McLaren was served a R24,000 costs order by the city’s internal valuations appeal board, apparently for “wasting their time”. The board had never before issued such a costs order.

The board had asked McLaren to provide information to back up his demands for higher rates for the city’s uber-rich by providing information (which the city had refused to provide him with) that eValuations was allowed to ignore when doing its original valuations. As a result McLaren was forced to withdraw many of his otherwise-valid objections.

Ironically, in the GV2013 there were 94,565 valuation objections of which 71,552 were lodged by the city’s own officials – an unheard-of situation in South Africa’s recent valuation history. The explanation: the majority were for over-valuations of township dwellings which the then-ANC-led council realised was not likely to please their voters in Soweto.

McLaren lodged 961 objections, all of which focused on the high-end market.

Vanessa and Willy Govender at their silver wedding anniversary party

Govender told Noseweek in a 2016 article that the overall value change as a result of the objections “was a reduction from R290bn to R284bn, the difference therefore being R6bn”. He said the total value of the GV2013 was R912bn, which reflected “a less-than-1% roll reduction”. In other words, they had been successful in carrying out their mandate.

Noseweek, in conjunction with the investigative journalism programme Carte Blanche, has since revealed how Johannesburg’s own valuers were able to manually alter valuation rates illegally for high-end city customers – at a price. The gritty facts are detailed in a 52-page forensic report that shows how a sample of 22 high-value Johannesburg properties (together worth R885.26m) were re-valued downwards by an average of 58% of their real value by means of forged signatures and fake documents (nose207).

Among those found to have benefited from this scam – although they denied any knowledge of the crooked valuations – included self-confessed KZN slumlord Ahmed Kazi, South African/Chinese business leader Li Xinzhu and Bloemfontein property developer Nic Georgiou.

The city failed to answer whether they would prosecute the customers found to be colluding with the already criminally charged former Joburg Metro employee implicated in the fraud, Mbali Maclare. 

Now the city has elected to throw a veil of secrecy over the lucrative contract awarded to eValuations for GV2018. They tried to thwart  Noseweek’s requests for details of the contract – first, via a Promotion of Access to Information Act (PAIA) application, then through direct questions to Rendani Tshivhase, Strategic Advisor to the city’s finance boss, Prof Rabelani Dagada, a staunch libertarian and close ally of Mayor Herman Mashaba.

But despite the city’s best efforts to hush up the deal, eValuations’ Johannesburg office confirmed informally over the phone, that they had won the contract and had been given “a short time frame” to fulfil their mandate.

The first bid, A654, was issued on 4 December 2015, with the closing date of 21 January 2016. Five bids were received. According to the Bid Opening Register – which is available online and was also obtained via the PAIA application – DPP Valuers quoted R144m; Sizanane Consulting, R264m; Black Jills PMM Consortium, R95m; eValuations, R167m; and Inani Lempahla Consortium/ICT Works, R417m. 

Bidders to whom Noseweek spoke said they had heard nothing further about the bid until 30 June 2016 when the bidders received a “Cancellation” letter. 

“The City of Johannesburg regrettably informs you of the cancellation of the above mentioned tender due to the expiry of the validity period,” said the letter sent by director of strategic supply chain management support, Setlhabi Leso.

The letter said a new bid, number A683, would be opened on 4 July and closed 1 August 2016 – just two days before the start of the country’s local government elections. 

The city refused to divulge any information concerning this bid as requested by Noseweek’s PAIA application, including the bid register which should be publicly available. Furthermore there is no publicly available online record that this bid was awarded. Normally records of this nature are stored on the city’s website.

However a source leaked Noseweek the details. The bids were as follows: DPP Valuers –  R145m; Sizanane Consulting – R229m; Inani Lempahla Consortium/ICT Works – R483m; Lutendo – R108,4m; Indigo – R166,7m; another firm called “Lapdot Property Consulting” – R110m; and  the lowest bid was eValuations – R99,897,750, a reduction of R67.3m from their previous bid.

Out of six requests for information made in Noseweek’s PAIA application only a portion of one request was answered. It was submitted on 30 November 2016 and it took the city 105 days to respond. All they provided was a hodgepodge of information that made little sense. All of the documents provided were already freely available on their website.

What was denied to Noseweek were the minutes for both Bid A683 and Bid A654 from the Bid Specifications Committee, Bid Evaluation Committee and Bid Adjudication Committee, as well as the 90/10 Preference Point System score for each bidder; names of members of bid committees including emails, letters, notes, memos relating to the bids; any evidence that there were significant differences in tender requirements between Bid A654 and Bid A683; details of why any bidder was disqualified; details on any joint ventures between bidders and records that “evidence the withdrawal of Bid A654 including communiques with bidders, officials, and the committees”.

The city claimed that providing such information contained “privileged information of third party” and its “disclosure would involve the unreasonable disclosure of personal information”.

They further claimed they were not obligated by law to provide any documents containing opinions or advice such as minutes of meetings.

Noseweek has appealed the city’s findings against the PAIA application. 

The only formal confirmation by the city that eValuations had won the tender was via a short conversation with Tshivhase who, when asked who won the contract, said: “The same company who undertook the previous valuation”. Probed further, he asked for questions to be emailed.

Tshivhase repeatedly missed deadlines to provide answers, despite the deadline having been extended six times. Noseweek’s questions included asking for “substantive reasons” as to why Bid A654 was cancelled; whethert they had inquired into the manner in which eValuations won the tender, and why the DA seemed to be embracing ANC “crony” business. He said the reason for the delay in responding was that the answers had to be approved by the mayor’s office.

The city’s formal media channels ignored all questions about the tender.

A new question for Mr Tshivhase (and the mayor’s office): Might some of the Gauteng DA’s major funders be amongst those favoured with nil or ultra-low valuations, allowing them to pay little or no rates on their valuable properties? – Ed.

eValuations merger under scrutiny

A proposed merger between EOH Holdings, a technology services group founded by Israeli immigrant Asher Bohbot, and Willy Govender’s companies: eValuations, Data World (Pty) Ltd, Data World Information Systems and Xcallibre (Pty) Ltd is the subject of a Competition Commission inquiry.

EOH is one of the fastest growing companies in the country and is gobbling up technology companies at a rapid rate. One valuer said that if the deal were allowed it would effectively “put the lock on the valuations business” which he claims eValuations had cornered through political muscle. The pending merger was lodged with the commission on 27 February 2017.

EOH is no stranger to Johannesburg residents, having had its hand in the billing crisis that rocked the city in the past decade. Last year EOH was awarded a three-year R404,656,224 contract as “Providers for the SAP Implementation/Upgrade”. They have also regularly won multi-million-rand contracts in another DA-led metro, Cape Town, as well as Nelson Mandela Bay Metro and the City of Tshwane. 

The company is a regular sponsor of City of Johannesburg events including the recently rained-out Joburg Open Pro-Am.

Early last year EOH paid R16.5m for a 100% share company called New African Rail (NAR), The BEE partner to French manufacturing firm Alstom who were partners in a R51bn contract to supply 3,600 new passenger carriages to  the Passenger Rail Agency of SA (PRASA). 

NAR’s BEE shareholders, who sold before a single carriage was built, were, according to News24, Thalente Myeni, son of SAA chairman Dudu Myeni, Monde Africa and Sesinyi Seopela.

Thalente Myeni
Dudu Myeni
BEE ripoff
Willy Govender
Asher Bohbot
City of Johannesburg
valuations scandal
Monde Africa
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