Trade union Solidarity claimed on Wednesday that the reported fuel purchase contract, which failed to follow prescribed tender procedures, placed by State-owned airline SA Express with a little known company, EML Energy, had been placed while Victor Xaba had been acting CEO of the airline. Xaba is now acting CEO of Denel Aeronautics.
The three-year contract was worth R2.4-billion and was awarded despite the fact that SA Express already had a ten-year contract with South African Airways (a separate State-owned airline) for the supply of fuel. According to the company website, EML was set up in 2006, was active at Denel’s Aeronautics facility at Johannesburg’s OR Tambo International Airport as well as at the Polokwane International Airport and owned a fuel farm with a capacity of 576 000 litres. But it does not seem to have yet supplied a single litre to SA Express.
“It is alarming that such a major deal, for which tender procedures were not followed at all, could slip past a CEO unnoticed,” asserted Solidarity deputy general secretary Deon Reyneke. “If Mr Xaba was worth his salt as a CEO, he would have seen to it that the tender process took its lawful course, and the controversial R2.4-billion tender would not have been awarded to an unknown music promoter.”
(Media reports describe EML CEO Eldridge Motlhake as a music promoter. According to his LinkedIn profile, he founded TKO Promotions – “Entertainment, Total Events and Project Management Solutions, Integrated Marketing and Communications” – in 2002.)
The deal was reportedly signed by SA Express executives Miriam Machoele and Sam Vilakazi. According to the union’s press release, Machoele had affirmed that she had had authorisation from Xaba to sign the contract.
Solidarity expressed concern about the future of Denel Aeronautics, and its members working there, now that Xaba was heading this unit of the State-owned Denel defence industrial group. This was especially so given the corruption and mismanagement at the Denel group that the union had already highlighted.
Solidarity also called for explanations regarding Xaba’s appointment to Denel Aeronautics from both Public Enterprises Minister Pravin Gordhan and new Denel board chairperson Monhla Hlahla. “It is imperative that Denel now appoint accountable managers in its ranks to ensure the company’s future, instead of merely moving cadres linked to possible tender irregularities at other State enterprises from one to the other.”