R1.5bn for Zuma road

2012-11-11 10:00
Paddy Harper and Adriaan Basson
Private businessman given the task of building ‘Jacob Zuma highway’ now needs R1 million to get funding

A R1.5 billion “Jacob Zuma Highway”, that will link the president’s hometown with the northern parts of  KwaZulu-Natal, is being built by a private businessman.

But mystery surrounds the funding of the project by Moeti Mpuru’s Korong Capital Partners, who took over the project from the KwaZulu-Natal transport department in September last year.

The highway – which will run from Kranskop, through Nkandla, to Vryheid – is already under construction.

It is the latest infrastructure project involving Zuma’s hometown following a R248 million upgrade to the  president’s homestead, plans to build a R2 billion town close to Nkandla and a R582 million face-lift on roads leading to Nkandla.

City Press is in possession of a letter written by Mpuru in October last year, in which he states his company was given “authority” by the KwaZulu-Natal provincial government, through the transport department, to “secure development funding” for the surfacing of the “Jacob Zuma Highway”.

The road – officially known as Main Road P16 – is a major upgrade to an existing 170km gravel road that runs through Qudeni, Nkandla and Silutshana.

Questions are now being asked about the viability of the funding after Mpuru approached a local construction company for a R1 million “loan” to pay legal fees to release funding for the project.

The relatively unknown Mpuru didn’t respond to text or email messages this week.

Although he identified his role as securing development funding, former transport minister S’bu Ndebele told Parliament in October last year that Mpuru’s company would fund the project.

In response to a question by IFP MP Petros Sithole, Ndebele said the KwaZulu-Natal transport department had completed the designs for 11km of the road from Nqutu “and were ready to advertise the tender for construction of the first phase”.

But according to Ndebele in mid-September last year, “the international donor, Korong, has confirmed (its) commitment to funding the construction of the upgrade of the entire gravel section of Main Road P16 to the (department’s) blacktop standards”.

Ndebele said Korong would be “leading the construction of this road which, after construction, will be handed over to the (KZN transport department) for asset management and routine maintenance”.

Construction would take four years, Ndebele said, ending in the 2015/2016 financial year.

This week, City Press found that work had begun on preparing the surface on a stretch of road between Silutshana and Qudeni. A truck was off-loading stone, but work stopped because of heavy rain.

Locals said work had progressed slowly because of bad weather.

No contractors’ boards were visible on the road, which climbs in and out of the Tugela Valley. An upgrade is sorely needed. It took City Press almost six hours to negotiate the 170km of gravel road.

In his letter to the local construction company, dated October 7 last year, Mpuru said the project was “completely undertaken” by Korong and includes the “funding, procurement of the various service providers (consulting engineers and contractors) and the payment thereof”.

Mpuru is Korong’s only registered director.

Through his “partners”, Mpuru said, he had secured funding for the project, but needed to pay a US-based attorney $100 000 (R870 000) in legal fees for the “initial phase of the funding” to be released.

It is not clear who Mpuru’s partners or funders are and whether they are based in the US.

Mpuru offered the local construction company the first 10km of the road – and more work – in return for a loan of R1 million to pay the US lawyer.

He added: “The repayment of R1 million to (the construction company) will be effected during the normal course of implementing the project and on agreed terms. On completion of the 10km, (the company) will be considered a strategic partner for implementation of a further 10km, taking into account timing in further designs of the road.”

KwaZulu-Natal transport spokesperson Kwanele Ncalane said the department had given Mpuru an “ultimatum”
to provide a concrete progress report on work done on the project after failing to meet several earlier deadlines demanded by the provincial cabinet.

Ncalane said Korong had not attended several meetings to discuss progress, which left the provincial government unhappy.

He said government had not committed funds to the road beyond the cost of design for the first 11km.

Ncalane was unable to say where the funding for the project was coming from and couldn’t say how much government had already spent on the road.

“We were approached by the consultant who undertook to pay for the cost of the project. KwaZulu-Natal transport will take responsibility for the road and its maintenance once work is completed,” he said. Ncalane said if a January deadline was not met, “government will take the road back”.

He was unable to comment on Mpuru’s R1 million loan-for-work request, but said the company had to “meet the department’s standards, both in quality of work and ethical business practices. If not, there will be action.”

A former member of the Azanian Students Organisation, Mpuru keeps a low public profile. His Matimba  Resources was the BEE partner of Australian miner Blackthorn Resources in a nickel-platinum project at Mokopane.

He couldn’t secure R4 million to buy Blackthorn’s 74% equity in the project early last year.

Zuma Highway