Gangster State

handling of hazardous material, removal and disposal of asbestos-
contaminated rubble and replacement with SABS approved materials
in the Free State Province.’ As an appointment by a government entity
is confirmation that the state will pay, it now appeared that the Free
State would foot the bill for the project, despite earlier promises from
Sodi and Mpambani that they would source funding.
Mokhesi next had his department enter into a service level agreement
with Blackhead and Diamond Hill. Finally, in December 2014 , Sodi
and Mpambani received an IPW document signed by Mokhesi, in
which they were instructed to ‘audit, assess and GPS all pre- 1994
government housing units in the province at a rate of R 850 vat
exclusive per unit up to a maximum of 300 000 units (R 255 m vat
exclusive, hereinafter to be referred to as the total project cost)’. There
must have been negotiations between the parties after the initial
proposal for Diamond Hill and Blackhead to be paid R 850 per house
as opposed to the R 1 350 they had requested. In the greater scheme of
things, this would turn out to be a near negligible victory for taxpayers.
A senior FSHS official explained to me why the structure of the deal
amounted to a gigantic rip-off: ‘The audit was not necessary in the first
place, but let’s say it had to be done. Why did we agree to pay them
[the Blackhead–Diamond Hill joint venture] for a fixed number of
houses that they were going to assess? They should only have been
paid for the ones where they identified asbestos roofs, not each one
they looked at. The fact that they were going to get paid for a
predetermined number of houses tells me these guys had come up with
R 255 million as the target amount for this scam.’
Besides this obvious issue, there were several other problems with the
contract and the way in which it was obtained. Firstly, it is always