Latest news with #R7-billion
Daily Maverick
21-05-2025
- Business
- Daily Maverick
Education and health funding slashed while fuel levy increased
From grant recipients and healthcare, to education and Home Affairs, this is an overview of the May 2025 Budget allocations. A rocky road lies ahead for social grant recipients who will see no increase in the amounts they receive over the next two years. This is just one of several changes revealed by Treasury this week in the third iteration of the National Budget for 2025. Those in the public sector who were hoping to take advantage of the early retirement programme will have to hop to it. The R11-billion allocation over the medium term has been slashed to R5.5-billion, which means the potential 11,000 employees who could have benefited has been halved to 5,500. Treasury director-general Duncan Pieterse said part of the reason for halving the allocation is that there is a process under way with the bargaining council for the current financial year. The previously projected savings of about R7-billion would also be reduced to about R3.5-billion. Slight acceleration for the fuel levy Consumers will also take a hit with a 4% (inflationary) increase to the fuel levy that will see petrol go up by 16 cents a litre, while diesel increases by 15c a litre – effective from 4 June this year. In other words, Treasury is clawing back the R4-billion relief that would have been seen had the fuel levy not increased. However, this is the first fuel levy increase since 2021. The zero-rated foods increase (on canned vegetables such as chickpeas and baked beans, edible offal of sheep, poultry and other animals, and dairy liquid blends) is now out the window. Importantly, additions to front-line services such as education, health and Home Affairs remain in place, although they have been revised downward. Healthcare The three-year allocation for health (provincial health compensation costs, unemployed doctors and goods and services) shifts down from R28.9-billion in the March Budget presentation to R20.7-billion in the Budget tabled this week. This funding will cover the employment of 800 doctors who have completed their community service, safeguard about 4,700 health posts and address shortages in medical goods, services and accruals. The May 2025 Budget overview document states that an additional R1.4-billion is earmarked for the construction of Siloam Hospital and the implementation of public-private partnership health technology at Tygerberg Hospital. Home Affairs Lines at Home affairs (Hell Affairs) are destined to remain long for the foreseeable future. While the March Budget allocated an additional R3.3-billion over three years for digitisation and 'human resource capacitation', it has been reduced to R965-million. Importantly, the line item in the 'spending additions funded over the MTEF period' now only reads 'digitisation', which means the 'human resource capacitation' or jobs or training element has been dropped. Education The additional spending for education shifts from R29.5-billion in March 2025 to R19.5-billion. This will go towards safeguarding about 5,500 teacher posts and increasing the early childhood development (ECD) subsidy from R17 per child per day to R24. The May 2025 Budget overview document then says that 'additional funding of R10-billion over the medium term will expand ECD access to an additional 700,000 children up to the age of five years old'. Defence 'The R5-billion we had proposed to allocate to the Department of Defence for its participation in the SADC mission in the DRC is reduced,' said Finance Minister Enoch Godongwana. However, the SANDF allocation for 2025/26 has been increased from R1.8-billion to R3-billion. 'This will cover the immediate costs of an orderly and safe withdrawal of our troops and mission equipment,' Godongwana said. Anticipated spending pressures Initiatives that may require funding later this year include: The withdrawal of the US President's Emergency Plan for Aids Relief (Pepfar) funding, particularly through USAID; Infrastructure projects in the Budget Facility for Infrastructure and the Passenger Rail Agency of South Africa rolling stock fleet renewal programme; Accommodating population changes that impact on the provincial equitable share allocations; Strengthening capabilities in the Office of the Chief Justice and Statistics South Africa; Political party funding and infrastructure provision for royal houses; and The National Social Dialogue. DM
Daily Maverick
07-05-2025
- Business
- Daily Maverick
KwaZulu-Natal water utility slapped with costs order in dead rabbit case
It's a helluva tale, involving claims, counter-claims, a dead rabbit, a bullet, Chinese 'heavies', ChatGPT, CCTV footage and the flip-flopping construction tycoon Stephen Lu. Some folks at the parastatal uMngeni-uThukela Water (UUW) might say there's more to the story of a dead rabbit and a flip-flopping Chinese construction tycoon, but this didn't stop a high court judge from giving the water utility a snotklap on Wednesday. As is typical with legal cases, it's complicated. An attempt by UUW to reverse an earlier court order relating to a R7-billion tender was not deemed urgent by KZN High Court Judge Sidwell Mngadi. The judge was unimpressed with UUW's approach and slapped the water utility with punitive costs for abusing court processes. Here's a quick recap of the legal proceedings and the poor rabbit. Last week, we reported how China State Construction Engineering Corporation South Africa (CSCEC) hauled UUW to court over the water tender. It's a helluva tale, involving claims, counter-claims, the dead rabbit, a bullet, Chinese 'heavies', ChatGPT, CCTV footage and the flip-flopping construction tycoon Stephen Lu. CSCEC is reputedly the biggest construction company in the world and was unhappy that its bid to build a water treatment plant in KwaZulu-Natal (in a joint venture with Lu's company, Base Major Construction) was rejected. The CSCEC-Base Major JV bid was R1.8-billion cheaper than the winning R7-billion bid, headed by South Africa's Icon Construction. The case surfaced in February when CSCEC took UUW to the KZN High Court in Pietermaritzburg to interdict UUW from taking steps to award the tender, saying it had been unfairly treated. That court action continued in March, when a consent order between the parties agreed to put the tender on hold, pending a final court determination at a later date. A host of issues In the meantime, UUW had to provide a record of the tender decision. Later, lawyers for both sides haggled over a host of issues. Then, late last week, UUW made an urgent application to the court to rescind the March consent order, alleging that Base Major didn't support the legal proceedings and lawyers acting for the company did not have power of attorney. UUW said it had discovered that a dead rabbit was delivered to Lu, his colleague found a bullet in an envelope on his car, and Base Major directors were intimidated by CSCEC and forced to sign a company resolution in March saying they supported legal action against UUW. Lu said Base Major didn't want to join the action, but CSCEC strong-armed them into it — a claim CSCEC CEO Chao Wang vehemently denied. Wang said CSCEC had nothing to do with the rabbit, and that Lu was old and slow and misunderstood an incident as a kidnapping. The essence of what was before Judge Mngadi last week was whether or not UUW's application was urgent. Before the judge could rule, lawyers for CSCEC also brought an urgent application to court on Wednesday, 7 May, attempting to prove beyond doubt that they had power of attorney by producing an affidavit from Lu disavowing earlier statements that he was threatened. This was in response to UUW's lawyers asking in court last week: 'Where is Mr Lu?' Well, CSCEC lawyers said, on 5 May, Lu deposed to an affidavit saying he willingly withdrew a criminal complaint relating to threats against him and confirming he voluntarily signed a Base Major resolution supporting the legal review application of the losing tender. This urgent application relating to power of attorney was also struck off as not urgent. However, Judge Mngadi didn't buy UUW's story. He said there was nothing to show that Lu's co-directors at Base Major didn't support the case against UUW. And, while Lu claimed he was forced into signing the resolution, witnesses said he signed it 'freely and voluntarily'. The judge went through a chronology of events from Lu's reluctance to support the case against UUW on 19 March, through statements relating to duress, to the company resolution. 'Parallel process' 'In my view, there is nothing showing that there was anything untoward in the resolution,' said Judge Mngadi. He said last week's court bid by UUW was 'a parallel process' that sought to scupper the legal review of the tender, 'by seeking contradictory relief in an urgent application' (relating to whether CSCEC's attorneys had the authority to act). There was no reason why the issue could not be raised in the review. It was not urgent, said the judge, and struck it off the roll with a punitive costs order, saying it was an abuse of court process. Lawyers for UUW said the issue of power of attorney still had to be resolved by the court. They said they were taking urgent instructions from UUW regarding the way forward. Lawyers for CSCEC said while the issue of authority could still be revived by UWW (on a non-urgent basis), they were adamant they had authority — provided by Lu's 5 May affidavit. They said the upshot of Judge Mngadi's ruling was that UUW was still bound by the consent order of March: it cannot award the tender until arguments have been heard in court. UUW was meant to have furnished answering affidavits in that matter by 30 April and had yet to do so. The interests of justice, CSCEC's lawyers said, required that this evidence be admitted so that the review (concerning R7-billion of taxpayers' money and water provision to KZN residents) 'can be resolved expeditiously'. DM
Daily Maverick
02-05-2025
- Business
- Daily Maverick
A dead rabbit, a bullet and a bot at the centre of KZN's R7bn water tender
China State Construction Engineering Corporation South Africa (CSC) has hauled parastatal uMngeni-uThukela Water (UUW) to court over a water tender dispute that appears to have turned ugly. A bloody, dead rabbit, a bullet in an envelope, eight Chinese 'heavies' and ChatGPT are at the centre of a disputed R7-billion tender for the construction of a water plant in KwaZulu-Natal. These details emerged in the Pietermaritzburg High Court this week. The case surfaced in February when CSC hauled parastatal UUW to court. In October 2024, CSC lost a bid to build the waterworks even though its joint venture with another Chinese-owned company, Base Major, was R1.8-billion cheaper than the winning bid by South Africa's (SA's) Icon Construction. CSC is reputedly the biggest construction company in the world, involved in projects in 100 countries, according to its website. In 2009, CSC was blacklisted by the World Bank for collusive practices in the Philippines. CSC South Africa is involved in a host of projects, including the construction of sections of the N3 between Durban and Pietermaritzburg. In February, CSC brought an application in the Pietermaritzburg High Court to interdict UUW from taking steps to award the waterworks tender. CSC claimed that UUW irrationally and unreasonably regarded it as non-compliant based on a lack of technical experience and issues related to translating documents from Chinese, among other issues. A consent order The February court action continued in March, where a consent order between the parties agreed that the tender would be put on hold, pending a final court determination at a later date. In terms of the order, UUW had to provide a record of the tender decision, and deadlines were set for the submission of affidavits. Later, in correspondence, lawyers argued about the disclosure of confidential price-sensitive information and AI-generated 'case law' that UUW reportedly relied on to make the tender award. Late last week, UUW applied to the court to rescind the March agreement because it alleged the court order was perpetuated by fraud. UUW said Base Major did not support the legal proceedings. UUW is represented by Andile Khoza, a director at the law firm Strauss Daly, who made an extraordinary affidavit motivating his argument ahead of this week's court proceedings. He said Base Major company bosses were intimidated into joining the court action and were threatened with death by CSC employees if they didn't. Khoza said in an affidavit deposed by CSC's Chao Wang he claimed he was authorised to bring the application against UUW on behalf of his company and Base Major, using attorney Adine Abro. But, Khoza said, on 16 March, he received a letter from advocate Alistair Glendinning, who acted for Base Major, saying that it was unaware of the legal proceedings until company bosses read about them in a Sunday newspaper. Glendinning was asked to secure a meeting with CSC to find out about the case because Base Major was a majority shareholder in the joint venture and had no part in launching legal proceedings. Glendinning didn't get a reply from CSC, so his attorneys got hold of Abro, asking on what authority she acted for Base Major. She sent correspondence from Base Major, including a company resolution. The correspondence said the CEO of Base Major, Stephen Jinpu Lu, had evaluated legal proceedings and supported CSC along with the other directors, Feng Sun and Amanda Lauren-Soo. A dead rabbit Thereafter, Khoza says, his client received information to the effect that the resolution was signed under duress. Khoza followed up on this and established that Lu is the complainant in an intimidation case registered with Midrand SAPS. Khoza said while he had no personal knowledge of the facts, he had sworn statements, including from Lu (dated 23 March and 26 March); Sun (8 April); and from a Midrand SAPS detective (24 April). According to Lu's statement on 23 March, 'two days before the purported Base Major resolution' he was at home at Waterfall Estate in Gauteng and received a missed call and then a text saying, 'Your delivery is at the gate.' He received a message from the security gate confirming the delivery. At the gate, he found a red and white bag bearing his name and cell number. 'When he opened the package, he found a photo of his car and a note reading 'Mr Stephen Lu enjoy it'. 'When he opened the package, he found blood and a dead rabbit.' He notified security and made a report to the police. Khoza said a Midrand SAPS detective viewed security CCTV footage from Waterfall Valley Estate and established that the vehicle that dropped the dead rabbit at Lu's house was registered to China State Construction. The next day, Lu received a call from his manager Feng Sun who said 'the construction guys' were at his home. Shortly after, both Sun and eight 'construction guys' arrived. They were told: 'If we don't sign, they will kill us or show us.' Lu contacted SAPS. Two policemen arrived but were 'overpowered by the eight Chinese', two of whom were CSC managers. 'We were forced to sign without our consent.' Lu protested, saying that they had lost the tender and should 'leave it at that', but he was 'held hostage'. Khoza provided a statement from Feng Sun relating to an event on 1 April when Sun was shopping at Carlswald Lifestyle Centre and on returning to his car, noticed a white envelope on his windscreen. Inside the envelope, he found a single bullet, and asked the police to investigate. AI's scrambled gobbledygook In a replying affidavit, CSC's Chao Wang accused UUW of trying to keep hidden from public scrutiny an opinion offered by UUW's attorney Garnet Ngubane that informed the water utility's decision to award the tender. The opinion was based on three 'reported cases' that were the product of 'AI hallucination …scrambled gobbledygook generated by ChatGPT or something similar.' In a desperate bid to avoid having to answer for this, UUW had launched its application, though, Wang said the water utility's CEO, Sandile Mkhize, would still have to answer to Parliament how he awarded a tender against the recommendation of UUW's appeal tribunal. UUW was silent, he said, on how it got sight of the harassment affidavits. He said a policeman at Waterfall asked Lu if he was signing under duress. He said no. 'The people at the scene shook hands, and we all left the scene at the same time,' Wang says, quoting policeman Sello Mabula. Wang quotes an affidavit signed by Feng Sun (dated 27 April) that denies he was ever kidnapped or that he or other Base Major directors were forced to sign a resolution or threatened by CSC. He said CSC and Base Major had a long-standing, mutually beneficial relationship dating back to 2022, when they started working together in a joint venture on the N3 upgrade near Pietermaritzburg. Wang said this project and another was in a 70/30 split, the majority being held by Base Major. 'Often slow' in decisions Wang said Lu is a 75-year-old Chinese national who has lived in South Africa for 25 years and is a director of Base Major. But, Wang said Lu was 'not overly involved in day-to-day management and perhaps because of this, he is often slow in making decisions'. Wang said he had no knowledge of or role in the 'bizarre' rabbit incident and emphatically denied that CSC had anything to do with it. Lu had briefed Glendinning, but by March 24 had amicably agreed to support the court action against UUW. Afterwards, Wang said he went to Sun's house and told him Lu would support the action and abide by court deadlines. They drew up the company resolution and called Lu, and told him they would bring it over for a signature. 'Mr Lu misunderstood Mr Sun's statement and formed the impression that Mr Sun had been kidnapped. He immediately contacted the SAPS.' Wang said they drove to Lu's house at Waterfall Estate, but Lu met them at the gate house and said he preferred to sign the resolution the next day. Police at the scene confirmed there was no sign of any attempted kidnapping, intimidation or any other aggressive or unlawful behaviour. Wang said he knows Sun received a bullet in an envelope, but this was no basis to infer he signed a company resolution under duress. UUW had put forward 'an entirely fabricated story' that did not merit urgent court action to rescind the March agreement between UUW and CSC to suspend the tender subject to court review. In court this week Advocate Jean Meiring for CSC said in court this week that the application was a perverse attempt to suppress egregious conduct at UUW, where the utility was playing fast and loose with state money. Advocate Alan Lamplough for UUW said no parties should be able to file further affidavits until the issue of Abro's power of attorney was resolved. Judge Sidwell Mngadi said the effect of the relief UUW sought was substantial — it would set aside the earlier March order. He said objections around power of attorney could have been handled separately. Lamplough argued that the existing order relied on Abro's power of attorney, which was in question. Meiring said there was no dispute over Abro's power of attorney and UUW had rushed to court to avoid answering questions related to AI-generated legal opinions. UUW was running roughshod over the rules. Base Major was fully behind CSC's legal battle. Lamplough said the issues at stake were 'extraordinary and grave'. Lu received a dead rabbit and said he was threatened; this evidence couldn't be ignored, he said. Meiring said police affidavits from the Waterfall meeting where the Chinese construction workers met Lu showed it was amicable. Lamplough disagreed, adding: 'Where is Mr Lu now?' Mngadi reserved judgment. DM
