Gangster State

Narsai explained that this was not done. ‘The scope of works changed
completely,’ he told me. Tekeweni and VNA had to fork out much more
money on work other than building the houses, he claimed. Originally,
the project was expected to cost R 100 million, but due to the added
expenses it was going to cost taxpayers almost R 240 million, according
to a progress report VNA compiled in February 2015.^33
One of my sources who worked on the project contested Narsai’s
claims. ‘The contractor teams were bloated with various team members
to justify the exorbitant fees they were charging,’ he told me. In other
words, VNA and Tekeweni were allegedly pocketing large fees instead
of spending most of the money on the project. ‘These allegations are
strongly refuted by VNA,’ Narsai said. There had been a ‘fixed cost’
for the houses’ top structures, and it was impossible to exceed this cost
seeing as it formed part of the bill of quantities, he claimed.
VNA’s project-management fee also seemed exorbitant. According to
Narsai, VNA’s original fee was valued at 15 per cent of the project’s
initial estimated cost, which came to R 100 million. The company’s fee,
including VAT, therefore amounted to just over R 17 million, he told me.
This did not include Tekeweni’s fees. A professional in the construction
industry told me that project-management fees should range between 3
and 5 per cent of the total project cost. Another South African project-
management firm charges between 6 and 9 per cent, according to its
website.^34 Narsai was adamant that VNA’s fees were not excessive. In
fact, he claimed VNA had spent more than R 20 million on the project
and therefore actually suffered a loss.
Selvan Moodley, Tekeweni Civils’ co-owner, also denied that his firm
had been overpaid. Moodley told me Tekeweni spent a lot more money
than anticipated on earthworks, servicing the sites and related tasks.