Gangster State

clearly equal partners in a joint venture. What’s more, the joint
venture’s fees from the FSHS would be paid into a bank account
controlled by Diamond Hill’s Mpambani and not by Blackhead or
Sodi, as we will come to see.
The fifth and biggest problem with the contract was just how much
money Blackhead and Diamond Hill were set to make. The formal
letter of appointment and the subsequent service level agreement
indicated that the joint venture was appointed not only for the audit
and assessment of asbestos roofs, but also for the subsequent handling,
removal and disposal of the asbestos-contaminated sheets, as well as
their replacement with ‘SABS approved materials’. Recall that in their
unsolicited request for the work, Blackhead and Diamond Hill
indicated that they would charge R 32 760 per house once the project
reached the ‘removal and disposal’ phase. The eventual asbestos audit
report found that 36 303 houses out of the 300 000 assessed had
asbestos roofs. The joint venture therefore had the potential to make
another R 1. 2 billion from the contract. Together with the R 255 million
for the audit and assessment, Blackhead and Diamond Hill stood to
clinch contracts worth more than R 1. 4 billion without ever submitting
a tender.
While it never got that far, I do not doubt for a second that those
involved in the scheme intended to drain the full amount from the
department. In the IPW received in December 2014 , the instruction to
perform the audit and assessment work is given as ‘IPW 001 ’ and is
referred to as ‘phase 1 ’. It seems quite reasonable to infer that ‘IPW
002 ’ or ‘phase 2 ’, namely the removal and replacement of the asbestos
sheets, would have followed.
In early 2015 , the Democratic Alliance in the Free State learnt about