CEO concedes joint venture given R255m contract 'did not have the skills'

Blackhead Consulting CEO Edwin Sodi, whose company was part of a joint venture awarded a lucrative Free State contract in 2014, has conceded his firm did not have skills and accreditation to handle asbestos.

Sodi gave evidence at the commission of inquiry into state capture on Friday, where questions were asked about representations the joint venture made when it secured a R255m contract to audit and assess houses in the province with asbestos roofs.

Sodi's partner in the joint venture was Diamond Hill Trading's Ignatius Mpambani, who was shot dead in broad daylight in Sandton while driving his Bentley in 2017.

Among the questions put to Sodi was why, despite his company not having the requisite skills and accreditation to handle asbestos, it entered into a service level agreement with the Free State department of human settlements and agreed to remove and dispose of asbestos in those houses.

Sodi said the intention was to perform “phase 1"  of that project which was to audit and assess the houses with asbestos roofing.

“Our plan was that should we be successful and be appointed for the eradication phase, we would have to work with an entity that is accredited to handle asbestos. That was the plan,” Sodi said.

However, evidence leader Paul Pretorius SC said a letter addressed by the joint venture to the Free State human settlements department in May 2014 requested to be appointed for the assessment, audit and handling and disposal of asbestos sheets.

Pretorius also referred to the service level agreement entered into with the department later that year, where the joint venture said it had all the skills and capability to render the service.

“Despite that undertaking ... you were not licensed to do the work for which you were appointed insofar as it involved the removal of asbestos,” Pretorius said.

Sodi admitted that the joint venture did not have skills to remove asbestos as it was not accredited to handle it.

Sodi said as it turned out, the “instruction to proceed with work” (IPW) was issued after the service level agreement.

“It was very specific that our appointment was limited to audit and assessment. The IPW in this case takes precedence over the service level agreement. It becomes a binding agreement between the client and the service provider,”  Sodi said.

Commission chair deputy chief justice Raymond Zondo asked Sodi why the joint venture would tell the department it was happy to be appointed for the “handling and disposal of asbestos sheets to an approved designated disposal site” when it did not have those skills.

“Why do you ask the department to appoint you where you do not have the skills and accreditation?” he asked.

Sodi said for the second phase, the joint venture planned to find an accredited service provider to perform the removal part.

Zondo said this was a misrepresentation on the part of the joint venture. Sodi conceded it was.

“You must see the seriousness of this kind of misrepresentation, particularly because you would know ... there are complaints government departments give work to entities that have no experience.

“They have got no knowledge of how to do the job. The next thing they just take the money and go away. The job has not been done,” Zondo said.

Zondo said for those reasons, it was critical that no service provider should misrepresent what it can and cannot do.

On the question of whether the joint venture disclosed that they intended to employ subcontractors, Sodi said he had never discussed this with the department.

“My late partner [Mpambani] is the one who was having these negotiations. It may very well have been that he had disclosed,” Sodi said.

The hearing continues.

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