Zuma’s Nkandla tax headache

He is liable for fringe benefit tax - auditor.

President Jacob Zuma has to pay fringe benefit tax on any personal benefit derived from the R206 million upgrades at his Nkandla residence, says Pretoria auditor Rudie van Zyl, who specialises in tax matters. This may leave him with a multimillion liability.

Public Works Minister Thulas Nxesi maintained last week that “allegations that the President had used state resources to build or upgrade his personal dwellings are unfounded”. He released a full report of the government task team on the Nkandla matter, which can be read here.

This is however contrary to preliminary findings of the Public Protector Thuli Madonsela, published earlier by the Mail & Guardian (M&G) from a leaked report and other documents obtained by the paper. The personal benefit she identified, was quantified by M&G to be almost R20 million.

In response to a Parliamentary question about the tax treatment of a holiday flight by then deputy president Phumzile Mlambo-Ngcuka in 2006, then Minister of Finance Trevor Manuel said presidents and deputy presidents were exempt from paying income tax on remuneration until 1994. This exemption was then repealed through an amendment to the Income Tax Act that was approved “by the new government of President Mandela to ensure that the tax laws apply equally to all South African residents.”

The minister stated that there are differences between the tax treatment of, for example, members of the legislature and civil servants. Members of the National Assembly for example got an allowance of R40 000 per year at that stage for traveling, entertainment and office expenses that could be set off in determining their taxable income.

Similarly, the minister said, the “unique nature of the responsibilities of a public office bearer” necessitates 24-hour security for the president and deputy president and it is not the practice of Sars to tax either of them on the value of such service.

Van Zyl says in determining Zuma’s tax liability the value of the benefit will be added to his annual salary of R2.6 million and he will be taxed on the total – in this income bracket at a rate of 40%.

In terms of the Income Tax Act that will include the value of improvements to his fixed property, the value of any movable property like furniture that was bought for his benefit and the value of obligations paid on his behalf like municipal accounts.

It also includes the value, and operations and maintenance of, the property for his personal benefit and personal benefit to his family members.

Van Zyl says in terms of s 16(b) of Schedule 7 of the Income Tax Act any benefit enjoyed by any other party on Zuma’s behalf, can also be regarded as a taxable benefit to him.

If it is found that the total R206 million was spent for his personal benefit, his tax liability will be R82.4 million, but that is not likely since some of the expense was incurred on state land for the state’s benefit, like accommodation for members of the South African Police Service who provide Zuma’s VIP protection.

If it is R20 million as the M&G calculated, it is still R8 million.

If costs for operations and maintenance are added, the number may increase further. A benefit to family members may bring the building of a tuck shop allegedly for one of his wives into the equation, Van Zyl says.

He further argues that if the M&G report proves to be correct that Zuma’s effected the appointment of his own architect, quantity surveyor, engineers and building contractor to the project, he should also be taxed on the benefit they derived, apart from any bona fide security expenses. M&G calculated 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.”

Taxed at a rate of 40% this element might add R36 million to Zuma’s tax bill.

Van Zyl says the obligation for declaring the tax benefit does not lie with Zuma alone. His employer has to declare the benefit within 30 days after the end of the tax year and show it on his IRP5. If the employer fails in this, the Commissioner has to determine the taxable benefit and instruct the employer to collect the tax.

The South African Revenue Service (Sars) is currently taking a wait-and-see approach. When approached by Moneyweb, Sars spokesperson Adrian Lackay said: “Once the facts around expenditure on the matter have been finalised and published, Sars will be in a position to determine whether any tax consequences may arise. Sars will then apply its legal mandate.”

- Moneyweb

First Nkandla estimate was a 'thumb suck', report finds

It started out as a “thumb suck”, but has ended up costing the South African taxpayer more than R200-million.

This is just one of the revelations made in a government task team report on President Jacob Zuma’s lavish Nkandla estate, which has escalated into a career-threatening crisis for him. (see below for highlights from the report)

The 50-page document goes on to say that officials initially estimated in 2009 that it would cost R27-million to revamp Zuma’s KwaZulu-Natal homestead. However, this figure was not based on expert opinion.

“On 21 May 2009, the professionals of DPW (Department of Public Works) visited the President’s residence and prepared a scope or proposal on security upgrades to be effected at the residence,” the report reads.

“According to the initial scope by Public Works, the estimated cost was approximately R27-million.

However, these cost estimates were not based on any expert security assessments – they were merely thumb sucked.”

Public Works Minister Thulas Nxesi last year appointed a task team to investigate the costs around renovations at Zuma’s rural home.

The task team released its findings this week and exonerated the president from any wrongdoing, though it did point the finger at former officials from the Department of Public Works.

But the report has also raised more questions about the validity of the expansive remodelling of the president’s private residence, including a swimming pool, a chicken run and a cattle kraal.

Senior government officials, including Police Commissioner Riah Phiyega, defended these additions to the president’s 3.83 hectare property as necessary in order to ensure the safety of Zuma and his family.

Nxesi listed several factors for this, including:

• The Zuma residence is located in an area with a violent history;
• The Zuma homestead and family members had been attacked on three occasions;
• Zuma uses Nkandla to receive official delegations, hold meetings.

These all “necessitated major security upgrades in Nkandla”.

Nxesi added: “The requirement to provide security for President, both sitting and retired, remains the responsibility of government.”

 Here are some highlights from the report.

• In 2009 officials from DPW put the cost of upgrades at R27-million, but says these estimates were not done by experts. It also does not specify what was included in the R27-million assessment.
• The report stresses that Zuma didn’t ask for upgrades but it does not say if he was made aware of the progress of the upgrades and the cost.
• It says it was decided in 2003 that the ministerial handbook,  which is a “guideline for benefits and privileges to which members of the executive and their families are entitled”, did not “adequately cover the provision of security upgrades on the private residences of the President, Deputy President and former Presidents and Deputies are concerned.”

However, it does not say how exactly the handbook fell short.

• The report says one of the contractors was paid R78-million despite the contract being cancelled for “poor performance”.
• The report says that Zuma’s residential complex also had to include accommodation to save staff a one-hour commute from Nkandla to Eshowe… “sometimes they were sleeping in cars at Nkandla,” the report says.

Government spokespeople could not be reached for comment. 

- eNCA

Nkandla scapegoats hit back, deputy minister disputes report

Hendrietta Bogopane-Zulu yesterday lashed out at her cabinet colleagues for implicating her in wrongdoing relating to the R206-million security upgrade at President Jacob Zuma's private home in Nkandla.

Bogopane-Zulu, who was deputy minister of public works when the Nkandla upgrade began in 2009, was named in a government task team report, along with former minister Geoff Doidge, as among those whose roles in the controversy should be investigated.

But a fuming Bogopane-Zulu - who is now deputy minister of women, children and disabled people - said she had not been interviewed by the investigators or her cabinet colleagues.

"I have not seen the report at all. None of the ministers have spoken to me. I was never interviewed or asked anything and for me ... logic says when you do an investigation and people are mentioned in a report, you give them an opportunity ... None of the ministers spoke to me ... so the authority to put my name - I don't know what informed that," she said.

Her reaction to the Department of Public Works report lends credence to suggestions that the investigation was a "whitewash" intended to protect Zuma at the expense of senior officials.

The report says Doidge and Bogopane-Zulu "attended and presided over site meetings and in some instances interacted with contractors involved in the project. This was reflected in the minutes, me-mos generated by officials of DPW and from evidence of three officials and one contractor who raised uneasiness with the involvement of the executive in the project."

Bogopane-Zulu said her conscience was clear and she welcomed the investigation by the Special Investigating Unit, which was gazetted on Friday.

"When the time comes, I will clarify my role. I have done absolutely nothing that is outside of my job. My conscience is very clear and whether it's the SIU, or whoever is recommended, they can go and do their [work]. All that I did in Nkandla is my job," she said.

Speaking from Sri Lanka, where he is South Africa's ambassador, Doidge did not want to comment on the report. "I'm told that the report is recommending that I be investigated by the SIU and the auditor-general, so let them investigate and report," said Doidge.

The public works task team did not interview key people implicated in its report, but public protector Thuli Madonsela - who is running a parallel investigation into Nkandla - has spoken to both Doidge and Bogopane-Zulu.

Madonsela said the release of her final report had been delayed by the unavailability of senior government officials and would take place at the end of next month. "We've been delayed by the security assessment process, which was not concluded as required. We only had one meeting with the officials that were assigned by [the security cluster] ministers. They had promised that we will have a second meeting this week but they didn't show up, neither did they submit the document that they had promised.

"The document was to clarify some of the [security] concerns they had. Because of that there will probably be another one-week delay. We are looking at the last week of January."

Madonsela said she had not been given reasons for the officials' failure to attend the meeting.

"We were not able to send our findings to the complainants and to affected parties ... No, they didn't [give reasons for the no-show]. We saw some of them on TV [during Thursday's press conference on the release of the task team report]," she said.

On Friday, Zuma signed the proclamation allowing the SIU to begin its criminal investigation into allegations of corruption and irregularities regarding the Nkandla upgrades.

SIU head Vas Soni said the investigation would be concluded within four months. He vowed that no one would escape scrutiny if the unit found that they had misused public funds or had benefited improperly from the upgrades.

"So long as we operate within the terms of the proclamation, it doesn't matter who the person is. As far as we are concerned, if we find serious malpractice or maladministration - and obviously corruption by anybody - then they will fall within the ambit of our investigation," Soni said.

Asked if Zuma's possible involvement would also be investigated by the unit, Soni said: "We go by the proclamation, not the person who issued it."

Zuma's possible involvement was raised in the Mail & Guardian newspaper when it reported on a leaked report compiled by Madonsela wherein she is said to have pointed out that Zuma had personally met public works officials working on the site and had introduced them to his personal architect, Minenhle Makhanya.

Makhanya was contracted by public works as overall project manager without the job going to tender and despite the fact that he did not have security clearance. He was paid R16-million for his work.

The public works task team report released on Thursday revealed that seven other companies that worked on Zuma's homestead did not obtain security clearances as required, which posed a security risk.

One company, E Magubane Information Systems, had been denied security clearance twice by the body now known as the State Security Agency.

The terms of reference for the SIU probe state that the investigation should look at whether there was:

Serious maladministration in connection with the department;

Improper or unlawful conduct by departmental officials and employees;

Unlawful appropriation or expenditure of public money;

Intentional or negligent loss of public money; and

Unlawful or improper conduct by any person that has caused serious harm to the interests of the public between January 1 2008 and now.

The SIU has also been granted powers to investigate the procurement and contracting of goods and services for the project. It will also investigate whether any of the service providers were officials or employees of the department, or whether the companies were owned by their spouses, life partners, relatives or friends.

The SIU will also probe any manipulation by officials involving "splitting", whereby work, goods and services are split into items of lesser value to avoid compliance with procurement prescripts.

The investigation is likely to look into the roles of Doidge and Bogopane-Zulu as well as that of senior officials in the department - including former acting directors-general Solly Malebye and Sam Vukela, as well as Makhanya.

- Timeslive

Nkandla figures don’t add up

The explanation provided by Public Works Minister Thulas Nxesi and his band of security cluster ministers on President Jacob Zuma’s homestead in Nkandla does not add up.

The Department of Public Works investigation report on the president’s private residence that was released this week attempted to absolve Zuma of any wrongdoing in the more than R200 million Nkandlagate scandal.

And the most glaring inconsistency is that R52m was spent on relocating neighbours who posed a security threat – a claim refuted by Zuma’s brother, Michael.

It can be revealed that:

*Only one family was relocated, and that was Zuma’s elder brother, S’godo, whose house was demolished by mutual consent and rebuilt outside the homestead.

The report said that “neighbouring families” were removed from Zuma’s homestead at a cost of R52m as they posed a “security threat”.

But Zuma’s brother, Michael, said there was no such move.

“Let me tell you something. There is no such thing… The only house there belonged to our late brother, S’godo. He is the only one who was moved, and it was a family decision, not because of security reasons.”

In its presentation this week, the inter-ministerial task team said that “neighbouring families” could not remain where they were, as they were going to be an obstruction to the fence line, and they furthermore posed a challenge for the positioning of the surveillance cameras.

However, Michael also leapt to his brother’s defence.

“My brother has not stolen from anyone. We know him, and he has never stolen anything from anyone in his life. The problem is that there was money allocated for the construction of the house, and then prices increased and it went over the allocated budget.”

Michael said his brother was not the one responsible of the construction of the homestead.

Several sources in the KwaNxamalala rural village were adamant that no external neighbouring families were moved, because that land belonged to the Nxamala (Zuma) clan.

* Nxesi said in January, and again in July, that the matter was handed over to the Special Investigating Unit for investigation. A proclamation authorising the SIU to investigate the matter was only issued on Friday. But this week SIU spokesman Boy Ndala insisted they were not investigating anyone for wrongdoing.

“We will need to be issued with a proclamation, and the matter has to be gazetted in order for us to proceed with the investigation. So for now that has not happened, and we are not investigating the matter at the moment,” said Ndala.

Announcing the findings of an internal probe into the Nkandla upgrade in January, Nxesi said the report would be referred to law enforcement agencies, including the SIU. By August this year, after the report had been declassified, Public Works said the matter had been referred to the SIU.

This was denied by the SIU at the time, which said it was “watching” the probe by Public Protector Thuli Madonsela into Nkandla, but that the matter didn’t fall “within the scope of our investigation into Public Works”.

The SIU said this after it had identified and begun probing projects in the KwaZulu-Natal Department of Public Works to the value of R902m. This had excluded the R206m security upgrades at Zuma’s home in Nkandla.

When asked in Parliament in July whether the SIU had been issued with a proclamation asking it to investigate the Nkandla scandal, Nxesi said it was up to Zuma.

When asked when the Public Works report on Nkandla was sent to the SIU, Nxesi’s spokesman, Phillip Masilo, said: “Soon after cabinet decided to declassify and make the report public.”

* It has also been established that AstroTurf soccer pitches built at the homestead were paid for by the KZN Department of Sports and Recreation, and not an NGO, as stated by Lieutenant-General Vejaynand Ramlakan, who had been tasked with strategic security for the homestead.

Ramlakan insisted at a media briefing that the soccer pitches had no implications for security and had been paid for by an unnamed NGO during the 2010 World Cup.

The fields are emblazoned with the department’s insignia, and came at a hefty cost of R4.2m.

Earlier this year, the media reports said that the department had splurged on the state-of-the-art fields, and even garnered a R650 000 donation from South African Breweries for their construction.

A spokesman for the department, Mluleki Mntungwa, said: “Initially, the site that was identified for the construction of the project was Lindela, which is approximately 7km from the president’s house.

“But the surveyor deemed the site not suitable for the construction of this project.

“The community, led by a local inkosi, identified the current site. The construction began in 2011.”

According to Mntungwa, the fields had been intended to benefit the entire community, even though they had been fenced off and closed since construction was completed.

He had said the project had been initiated after his department had received a request from local people.

“Once completed, it is going to be utilised by the entire community,” he said.

Public Works legal adviser Phillip Masilo this week scrambled to cover his tracks. In response to questions, Masilo said: “This was just a mistake – hence the surgeon-general qualified his answer by saying he stood to be corrected.

“What is fact is that the allegation in the media that a soccer field was built as part of he security upgrade is without basis and false.”

- Sunday Tribune

Zuma's Nkandla defense: No, no, that's not a swimming pool. It's a fire pool! For security!

South Africa — With the world watching, South Africans booed their president, jeering Jacob Zuma again and again in front of dozens of world leaders at Nelson Mandela’s memorial service last week.

That kind of display against the head of state, especially on a day reserved to honor democratic South Africa’s iconic first president, may have surprised onlookers from other countries. But it’s no secret here that South Africans have had it with their president.

One of the main reasons? A place called Nkandla. This is Zuma’s village home in rural KwaZulu-Natal province, which has been renovated since he took office in 2009 to the tune of $20 million in state funds — and become a byword for lavish spending by the ruling African National Congress (ANC).

A new report by the South African government defends Zuma against the accusation of abusing public money to upgrade his private home. But it will do little to defuse South Africans’ anger.

The official case for Zuma’s extravagance comes ready-made for mockery. The cattle enclosure, swimming pool and houses for Zuma’s relatives? All were necessary for security reasons, public works minister Thulas Nxesi said Thursday at the release of the report.

For example, that “so-called swimming pool” is actually a “fire pool,” Nxesi explained, in case one of the compound’s thatched roofs catches fire and needs water.

The cattle enclosure — known in South Africa as a “kraal,” or corral — had to be moved because the cows were disturbing the security system and causing false alarms. A cattle culvert was built because of the security risk caused by cows and people using the same entrance.

A “chicken run” was built within the cattle corral to replace buildings that were “potential hiding areas for intruders.”

And a tuck shop, or convenience store, owned by one of Zuma’s four wives had to be moved from outside the compound to a high-security area because the customers were a security threat. Neighboring families were also relocated for this reason.

The public was not reassured.

More from GlobalPost: A gray goodbye for beloved Madiba

Lindiwe Mazibuko, parliamentary leader of the opposition Democratic Alliance, called the explanations “frankly ludicrous,” while another party, the Congress of the People, said the report was a “whitewash.”

"South Africans will see through this poorly disguised ruse to ‘clear' President Zuma and provide shoddy — and at times ridiculous — explanations for the expenditure of public money on inexplicable luxuries,” Mazibuko said.

Ferial Haffajee, editor of South Africa’s weekly City Press newspaper, said the money spent on security at Nkandla sounds more “like the setting up of wartime operations in Iraq or Somalia or South Sudan.”

“For a man who has crafted an identity as KwaZulu-Natal’s peace-finder and a son of the rural soil, he (or his team) engaged a security project more befitting a genuinely besieged leader like Afghanistan’s Hamid Karzai,” Haffajee wrote.

As she noted in a column, the government’s own report admits that the presidential architect had no security clearance, nor did six of 15 contractors on the project. A company that had its clearance denied nevertheless continued to install security cameras. 

The government’s accounting of the Nkandla upgrades — or “Prestige Project A,” as it was known — differs significantly from a provisional report by South Africa’s independent ombudsperson, the final version of which is due in mid-January.

A leaked copy of this report, which has the draft title “Opulence on a Grand Scale,” said that Zuma had derived substantial personal benefits from the upgrades, and called for him to repay some of the money.

While Zuma is expected to continue leading the ANC into next year’s elections, there is growing disquiet within the party over his leadership.

A recent poll of 1,000 ANC members around South Africa found that 51 percent wanted Zuma to resign, and 42 percent said he had abused taxpayer funds.

At the Mandela memorial service, the thousands of people booing Zuma whenever his image was shown on the big screen were mainly ANC members from the Johannesburg area.

The South African Communist Party — which is in an alliance with the ANC — has promised to name and shame those who booed Zuma.

- Global Post

Government releases task team report on security installation at President Zuma’s private residence at Nkandla

Task Team report on security measures at Nkandla

Good Morning Ladies and Gentlemen

 

At its meeting of 4 December 2013, Cabinet resolved to release to the public the Ministerial Task Team Report on the Security Installation at President Jacob Zuma’s Nkandla private residence. This media briefing is convened to give effect to that decision.

In October 2012 the Minister of Public Works, Mr. Thulas Nxesi, ordered an investigation into the conduct and management of the security installations at the President’s residence in Nkandla. This was in response to public concern that the cost estimates being mentioned seemed excessive. This is a concern shared by government hence the investigation by the Task Team. The other allegation was that the President had used State resources to build his private residence. 

 

The Task Team submitted its report in January 2013. The report contained details related to security aspects of the installation hence it was decided to classify the report as Top Secret. It was then referred to Parliament for guidance as to what appropriate steps needed to be followed.

 

The report has been considered and reported upon to the Joint Standing Committee on Intelligence (JSCI) and thereafter to the Joint Cabinet Committee. After that it was tabled to Cabinet. The content of the report remains as submitted by the Task Team with an exclusion of sensitive security issues such as the nature and location of the bullet proof windows and the safe haven. Ministers are now acting on the decision of Cabinet that the report should be made available to the public.

 

The report provides a factual account of the security installation. This statement provides a context that will allow for a full understanding of what transpired.

 

First, it is important to indicate that all sovereign governments have a responsibility to provide security for their Heads of State and their families. Such security is provided at State’s expense. This obligation of sovereign governments is a significant factor in the finding of the investigation. 

 

Parliamentary and Cabinet process that had to be followed as well as security concerns have delayed the obligation to account for public funds. Cabinet has taken this view and resolved to release the report on the investigation that was initiated by the Department of Public Works into the Nkandla security upgrades.

 

Let us take a step back. The Nkandla security upgrades became necessary when Mr Jacob Gedleyihlekisa Zuma became the President of the Republic in 2009. The state has an obligation to protect the President.

President Zuma lived and continues to live in a homestead he and his family developed in a remote area of rural KwaZulu-Natal. The usual services such as transport, roads, power, water and sanitation that are taken for granted by many urban dwellers simply did not exist. This rural setting posed a security hazard for those charged with safeguarding the President.

The violent history of this area of KwaZulu-Natal, the fact that the Zuma homestead and family members had previously been attacked on three occasions,  and  the fact that the President has to conduct government functions such as receiving official delegations, holding regular meetings and business consultations from his private residence necessitated major security upgrades in Nkandla.

The requirement to provide security for President, both sitting and retired, remains the responsibility of government. The Ministerial Handbook did not adequately address security around the Head of State, Deputy President and their families hence the Cabinet policy of 2003. 

 

The aforesaid Policy clearly emphasises the obligation of the security cluster departments and that of Public Works in ensuring the implementation of security upgrades at private residences of the President, Deputy President, Former Presidents and Former Deputy Presidents.

 

There is an established process for undertaking security upgrades. The security cluster departments like Department of Defence and Military Veterans and Department of Police appointed an expert team to conduct security risk assessments.

In addition to security measures such as security systems, security fencing and fire fighting capabilities, the recommendations included the need to provide basic services such as power, water and health facilities. Furthermore, accommodation for security personnel was required to support the necessary security measures. 

 

President Zuma did not ask for security installations. As per normal procedure, SAPS and Department of Defence conducted a security assessment, as per their mandate. As it will be shown in the findings of the Task Team Report, no state funds were used to build the President’s private residence. It is important to understand this process because this is where ultimate responsibility for the upgrade lies. It is the responsibility of the Department of Public Works to implement the recommendations from the security cluster and to manage the costs of the project in line with the Cabinet Policy of 2003. Attempts to lay the responsibility for the upgrade at the door of the President are misdirected. 

 

We have noted that the public discourse has been dominated by questions around certain aspects for which costs have been incurred. I wish to provide the following explanation:

1. Tuck shop

The tuck shop existed long before the President was inaugurated and was located within the 3 ha land of the President. Due to security risks posed by the movement of people from outside the homestead into the high security area, the tuck shop had to be relocated from within the premises and erected at the perimeter of the premises. Since it was the initiative of the State to relocate the tuck shop and not the owner, the State was duty bound to bear the costs of the relocation and its construction at the new location.

 

2.  Relocation of neighbouring families

The neighbouring families had to be relocated as they were identified as a security risk to have them within the high security zone. The rondavels could not remain where they were as there were going to be an obstruction to the fence line and furthermore posed a challenge for the positioning of the surveillance cameras.

 

3. Retaining wall

 A retaining wall which is the so called “amphitheatre” meant for ground protection, is not an amphitheatre but constructed as a structure with steps. It is in excess of 4 meters height, broken down in the form of stepped terraces and curved to give it more structural stability against the earth.

 

4. Chicken run

A feature known as the chicken run was constructed within the cattle kraal. It was created as a replacement to a number of building block structures that were scattered around some of the main dwellings which were obstructions and potential hiding areas for intruders. The relocation of these loose structures to a dedicated area improved the security on site.

 

5. Cattle Kraal and Culvert

When the assessments were conducted, as part of security, sensitive electronic equipment was recommended to be installed on the fence. False alarms as well as damage to the fence and electronic equipment could be caused by the cattle. The cattle and people were using the same entrance due to the location of the kraal posing a potential risk in the high security area. As a result, a decision was taken that the cattle kraal be moved to a dedicated area and culvert be erected to prevent the cattle from disturbing and damaging the electronic equipment and the fence.

 

6. Fire Pool and Water Reservoir

One of the hazards raised by the assessment was the possible outbreak of fire as most of the structures have thatched roofs and are close to each other. In order to eliminate or minimize potential risks and due to water supply which was erratic, a fire pool ‘the so called swimming pool’ was decided on as the most viable option for firefighting. 

 

Secondly water reservoir was constructed for use by both homestead as well as accommodation for security personnel. It was decided based on the advice of the mechanical engineer that a structure which can contain 45 000 litres of water was needed for fresh water in a form of a water storage tank. 

 

7. Visitors’ waiting rooms

Due to the large number of people that visit the President at his private residence, it became a security challenge to control them. Therefore a waiting place was erected to address this security challenge.

 

That brings me to the role of Public Works and the decision in October 2012 to order an investigation into the Nkandla security upgrade. The following is a summary of the Task Team findings:

• allegations that the President had used state resources to build or upgrade his personal dwellings are unfounded;
• the actual security installation cost approximately R71 million. Approximately R135 million was spent on operational needs and basic facilities and services (e.g. including water, power, accommodation etc.) needed to support the security upgrade for SAPS and Defence personnel. 
• there are many supply chain irregularities in relation to the appointment of service providers and procurement of goods and services. For instance, large variation orders and the high percentage spent on consultancy fees point to the possibility of over-pricing and collusion.

 

Based on the Task Team’s Report the following actions are currently underway:

• I engaged with the Special Investigating Unit (SIU) and the Auditor General (AG) for further forensic and criminal investigation.
• President Zuma has signed the proclamation empowering the   SIU to institute further investigations. 
• The Minister of Public Works has written to the Minister of Police requesting SAPS to investigate any possible criminal acts.

The Minister of Public Works takes full responsibility of this project. Further, the Ministers of Police and Defence and Military Veterans assume responsibility for the operational needs of their respective departments in the project. 

 

In conclusion, the Task Team’s Report presents the factual findings of their investigation. It is important for us to also consider this wider context - both to fully understand the findings and to develop the necessary strategies and controls to ensure value for money and public accountability in the future. The release of this report is therefore in line with our commitment of transparency on matters that are in the public interest. Copies of this report is available from http://www.gov.za/documents/download.php?f=206154. 

 

I thank you. 

 

Enquiries: 

Nikelwa Tengimfene on 0825745495 or email: nikelwa@gcis.gov.za

Media briefings

Year: 

2013

Media Statement date: 

Thursday, December 19, 2013

More Nkandla expenses await public

Cape Town - Whatever the final bill for construction work at President Jacob Zuma’s Nkandla home, already standing at R206 million, the public will also end up paying for maintenance and running costs for the facilities on state land.

The government is already footing the electricity bill, but it is unclear whether this is for the whole property or for security features and accommodation of security-related staff only.

Public Works Minister Thulas Nxesi said in a written reply to a parliamentary question on Friday a maintenance plan for the state property would be ready next year.

He had been asked by the DA’s Herman Groenewald to list running costs and said his department had, to date, incurred no running costs except for electricity.

A report by Parliament’s joint standing committee on intelligence (JSCI) emphasised that the bulk of the construction expenses was incurred in relation to state-owned land.

It said there were two properties – the private property of the president and state land, where facilities that couldn’t fit on Zuma’s land were built.

Of the R206m total spent on security at Nkandla, 24 percent went to the private residence and 52 percent to the “government hub” section for infrastructural costs.

The remaining 24 percent was for consultancy fees, according to the JSCI report.

Nxesi’s spokesman, Sabelo Mali, was in the Eastern Cape on Friday, where the department was involved in preparations for Nelson Mandela’s funeral, and referred queries to the director-general’s office.

However, no one was available there to clarify matters.

Nxesi classified an internal task team report used by the JSCI in its investigation, saying at the time it was insensitive to ask for details of the work done at Nkandla.

But, after the Mail & Guardian published details from what it said was a leaked version of the public protector’s provisional report on Nkandla, the cabinet said the Public Works document, stripped of security information, would be released this week. Mandela’s death resulted in a postponement, however.

Public Protector Thuli Madonsela has said she expects to make her own report public next month.

- Weekend Argus

380 left homeless after shack fire

Cape Town - A domestic dispute might have been the cause of a fire that swept through a section of the Kosovo informal settlement in Philippi on Tuesday night, leaving some 380 people homeless.

A fresh south-easter helped to fan the fire while a team of 48 firefighters in a large squadron of vehicles battled the flames from 9pm to the early hours of this morning.

“We were called out at 9pm and by 1am it was extinguished,” said fire services spokesman Theo Layne.

“We do not have the final tally yet, but we estimated about 100 shacks were destroyed and 380 people were left without shelter. We took them to the community hall in Kosovo and put them up there.

“Disaster Risk Management staff are out there this morning to help the people. They will be issued with their starter-home packages, among other things.”

Layne said fire department investigators were told by members of the community that the fire was caused by a man who had had a domestic dispute with a woman.

In a fit of anger, he set their shack alight and the fire spread to the shacks downwind of theirs.

- Cape Argus

Preparations for Mandela’s funeral delay Nkandla report

AN INTER-ministerial report about controversial security upgrades to President Jacob Zuma’s Nkandla home in KwaZulu-Natal will not be released this week as planned, the government said on Monday.

Public Works Minister Thulas Nxesi and security-cluster ministers were scheduled to release the report at a media briefing on Tuesday, said acting government spokeswoman Phumla Williams.

"However, in view of preparations for the state funeral of former president Nelson Mandela, the government is unable to release the report this week," she said.

The Cabinet ordered the release of the initially top secret report on Thursday.

The decision followed an attack by the African National Congress (ANC) on Public Protector Thuli Madonsela about the timing of her own report on the R206m upgrade at Mr Zuma’s private homestead.

"(We have) endorsed the recommendations and directed that the report be released to the public," the Cabinet said last week.

Earlier this year, Mr Nxesi classified the report, saying it would put Mr Zuma’s safety at risk if released.

A parliamentary committee’s findings on the report indicated that it exculpated Mr Zuma finding no evidence that taxpayers’ money had been used to pay for his private home — as he has insisted in statements to the National Assembly.

The Mail & Guardian reported that Ms Madonsela’s preliminary report found Mr Zuma had misled Parliament and benefited substantially from about R20m worth of work that had nothing to do with security features, including a swimming pool.

The story led to the ANC accusing Ms Madonsela of leaking the preliminary report and pressing her to release the final version urgently, or be accused of playing politics if it emerged too close to next year’s general elections.

Ms Madonsela condemned the leak.

- Sapa

Thuli hits back over Nkandla

The ANC continued its offensive against Public Protector Thuli Madonsela on Wednesday, hammering her for “leaks” of reports from her office, which it said undermined her office and also harmed those being investigated.

But she hit back, saying she was the victim of a campaign to “delegitimise” her office, led by senior leaders of the ANC-led tripartite alliance.

However, she was willing to meet the ANC as the party was not able to be part of a session she had with stakeholders earlier this year.

She said she would not pursue criminal charges against those who leaked or published her provisional Nkandla report on the R206 million worth of security upgrades of President Jacob Zuma’s Nkandla homestead, even though it was unlawful to do so.

She had no capacity and resources to pursue the culprits because her hands were full already, she told a media briefing.

“If I were to lay criminal charges, I would have to take the entire (media) industry to court. That would mean my entire life…,” Madonsela said.

She added that she had decided “to stop the opportunity for leakages”.

She singled out ANC secretary-general Gwede Mantashe, his deputy, Jessie Duarte, and SACP general secretary Blade Nzimande as the ringleaders of a campaign to “delegitimise” her office. She stopped short of labelling them liars.

Madonsela denied Mantashe’s claims that she had leaked the controversial report. She also rejected the ANC’s claim that she deliberately sat on a complete Nkandla report with a view to releasing it on the eve of next year’s general elections.

Ministers in the security cluster took Madonsela to court last month over the release of the provisional report. They said some aspects in the report revealed sensitive security issues around Zuma.

Madonsela will share the report with security experts provided by the ministers to ensure there are no security breaches.

Madonsela said she and her staff had no reason to leak reports, because that would only erode her office’s credibility.

“I don’t know who leaked it. It’s only the media houses who would know who leaked it. I have no reason to suspect that the leak was from my office.”

She shared Mantashe’s view that provisional reports should not be shared with the public as that was prejudicial, and that final reports should be released as speedily as possible.

She said her office had not yet decided whether Zuma would receive the full provisional report or snippets. “We have made a decision that no one will get the provisional report… to minimise leaks.”

However, Mantashe had made a series of “incorrect statements” on Tuesday by giving “purported” reasons for why that happened.

“Firstly, I have never said I would release my report by March next year,” Madonsela said. The truth is I have never shared the provisional report with the affected and interested parties. The draft report was sent to the five security clusters.”

Madonsela said it was unclear why Mantashe had linked her to the elections. “Did he lie? I wouldn’t say so… I wouldn’t say it was untruths. I would say the information wasn’t correct. The statement was untrue, but I wouldn’t label them in any way,” she added.

Madonsela said three years after Nzimande accused her of “jumping when the DA asks me to”, she had yet to get the evidence she asked for.

“It’s part of a campaign to deligitimise my office.”

On Wednesday, ANC spokesman Jackson Mthembu said leaks of incomplete reports from her office happened regularly and prejudiced its work. “These leaks have the effect of not only undermining and prejudicing the integrity and the work of the public protector’s office, but also of harming the image and the standing of those who are being investigated,” he said.

Mthembu recalled three other incomplete reports that had been leaked recently.

- Pretoria News

Cabinet declassifies Nkandla report that clears Zuma

The Nkandla report allegedly clearing Jacob Zuma will be released next week Tuesday, it has been announced at a post-Cabinet briefing.

The government will on Tuesday release a previously secret report that apparently found President Jacob Zuma did not benefit from Nkandla upgrades.

On Tuesday, the ANC called for a inter-ministerial task team report on Nkandla to be released in full – but said it could not direct security ministers to declassify it, only ask nicely.

But on Thursday, Cabinet announced it had "directed that the report be released to the public", and said security ministers would hold a briefing on it next Tuesday.

That comes one day after public protector Thuli Madonsela said her report – expected to be damning to Zuma – could be made public before Christmas, but would more likely be read in mid-January, and a little less than a week since the Mail & Guardian published details from a draft version of the report.

From what is available in public the two reports seem to have much the same factual findings, but with very different conclusions.

Earthquakes, rape

In November, the inter-ministerial committee released its findings based on a classified report, which was drafted by a task team appointed by the security cluster ministers to investigate the security measures at Zuma's Nkandla home.

A high risk of earthquakes, volatile politics and high levels of rape in the Nkandla region are some of the reasons the state had to upgrade the security at Zuma's private home in Nkandla, according to Parliament's joint standing committee on intelligence.

But there were still no details on what the R206-million state funds were spent on.

The task team's report was tabled in Parliament in June, classified as "top secret" and sent for consideration to the intelligence committee, which meets behind closed doors.

The committee's report appeared in Parliament's daily announcement papers – a day after Parliament went into recess for the Christmas holidays.

'Necessary'

The report reads: "It is necessary to appreciate that the geography of the area of Nkandla is fundamental to an understanding of some of the factors that influenced the security upgrades to the residence in question.

"Nkandla is a deep rural area in the province of KwaZulu-Natal with an average elevation of 1 301m above sea level and KwaNxamalala is one of the villages that constitute the Nkandla [Local] Municipality.

"It is at the heart of this remote village that the home of the sitting president of the country is situated.

"This is where the president takes a break from [his] hectic government schedule to go and relax as well as spend quality time with his family, [and] attend to his guests and private engagements. The president also hosts senior state visitors.

"In terms of natural hazards, Nkandla can be susceptible to strong earthquakes [at] an average [of] one earthquake every 50 years, with occurrences at 5 to 6 [on the] Richter scale. While there is a medium to low risk of periods with extreme drought, the risk [of] flooding is also very high," states the report, citing additional information the committee received from the task team.

Political assassinations

The report also reveals that the "volatile" political situation in Nkandla is a factor that has to be considered in the security evaluations of the head of state's residence.

The task team found that in addition to the usual factors that affect the security of the president and his family, it had been necessary to examine broader issues such as the political dynamics in the country when assessing and determining the safety and security of a head of state.

"In the case in point, there has been a growing trend of political assassinations generally in the history of South Africa, post-apartheid."

The report said that whereas political assassinations were "bad" in both Mpumalanga and KwaZulu-Natal, the latter province was the worst affected.

The report records Zuma's involvement in brokering and securing a deal with the Inkatha Freedom Party to quell the violence in the 1990s.

"Over the years since then, there have been sporadic threats and warnings that there could be a resurgence of political violence."

Soft targets

The report also notes that residents of rural communities are generally considered soft targets of crime and the president's family may be viewed as an even easier target for retribution from those with different political viewpoints.

"Rape is reported as being particularly on the rise, among other crimes. This is but one of the factors that necessarily place an obligation on the government to tighten security even more around the residence of President Zuma," the team said.

- M&G

Cabinet to go public with Nkandla report

Cape Town - Cabinet has ordered that an inter-ministerial task team report into the Nkandla controversy be released to the public.

The decision was announced on Thursday after the African National Congress criticised Public Protector Thuli Madonsela over the timing of her report on construction work at President Jacob Zuma's KwaZulu-Natal homestead.

"Cabinet deliberated on the presentation by the minister of public works on the inter-ministerial task team report on the security upgrades at the president's Nkandla houses," Cabinet said in a statement following its fortnightly meeting on Wednesday.

"Cabinet endorsed the recommendations and directed that the report be released to the public."

It is expected that the report will be released next week, when the security cluster holds a media briefing, but with sections that refer to security arrangements at the President's compound excised.

The report exculpated Zuma, finding no evidence that taxpayer's money had been used to pay for Zuma's private home - as he has insisted in statements to the National Assembly.

But last week, the Mail&Guardian reported that Madonsela had found in her preliminary report that the president had misled Parliament.

Leak

The leaking of the report has seen the ANC accuse Madonsela of leaking the report. It urged her to release the final version urgently or be accused of playing politics if it emerged too close to next year's general elections.

The task team referred to is the one established in November last year by the ministers of public works, police, and state security to probe security upgrades to Nkandla. This was prompted by concerns over the cost, more than R206m, of the upgrades.

Its report was referred to Parliament's Joint Standing Committee on Intelligence for consideration in June. The committee, which meets behind closed doors, last month said the security upgrades at Nkandla were divided into two focus areas.

It said the "apparent misunderstanding that presently exists in respect of the upgrades at the Nkandla property could be attributed to the fact that no clear distinction is appreciated between the state-owned land... and the property of the president".

- SAPA