Fin24

Tolls: Cosatu cashes in

2012-04-01 12:24

Johannesburg - Trade union federation Cosatu, an outspoken critic of toll roads, ­secretly benefits from a construction company involved in building new highways.

City Press can reveal that ­Cosatu’s investment arm, Kopano Ke Matla, has shares in Raubex, a construction company that won a tender to build one of Gauteng’s highways that are now being tolled to pay for the construction.

Kopano benefited from the building of the R21, which forms part of the Gauteng Freeway ­Improvement Project.

Raubex received R800m for the project, which meant ­Kopano cashed in R24m due to its shareholding of 3% in the construction company.

Raubex also bid for the second phase of the project as well as the N1/N2 Winelands toll roads in the Western Cape.
Raubex lost out on both bids.

The non-executive chairperson of Raubex, Collin Matjila, is also the chief executive of ­Kopano Ke Matla.

The Winelands bid was won by a consortium that included Group Five and Basil Read, but stalled due to provincial government ­objections to the project.

Kopano was also in partnership with Basil Read to build Cosmo City, a mixed-income suburb in ­Johannesburg.

Basil Read won a chunk of the R20bn Gauteng Freeway ­Improvement Project after a consortium the company led won two portions of the project totalling R1.7bn.

This week Cosatu had a meeting with the ANC after emotions about e-tolling reached boiling point.

Both parties refused to speak about the meeting, but City Press has learnt that Cosatu general ­secretary Zwelinzima Vavi was confronted with information about Cosatu’s involvement in ­tolling.

“Vavi almost shat in his pants when he was told. The ANC simply said ‘why are you against e-tolling’ and showed him the papers,” said a source with knowledge of the meeting.

Since the meeting, Cosatu has not said a word about tolling. In a joint statement, the two parties said: “Papers presented at the meeting and discussions that ­ensued will not be made public.”

Vavi told City Press he was ­unaware of the investment company’s involvement in toll roads.

“That was only brought to our ­attention in the meeting with the ANC. We were not aware of that. When we checked, we established that they didn’t win the contract.

"We are not beneficiaries and we, accordingly, asked Kopano to withdraw any further attempts to bid for any of the contracts related to the privatisation of the roads.”

He said Kopano operates at arm’s length from Cosatu, saying it reported to its board of directors, which included members of ­trade union federation Cosatu’s central executive ­committee.

“You know the nature of investment companies is that you don’t control them every day. You don’t know in fact what they are doing unless there is something big, which we will automatically come to know about.”

He said they had issued an ­instruction to Kopano not to get ­involved in social services such as water and electricity, which should be controlled by the state, as doing so compromised Cosatu’s anti­privatisation stance.

“In the case of the Gauteng ­Freeway ­Improvement Project, you would have thought it is ­naivete to think this is not privatisation. It is privatisation. That’s why we are asking them to move out.”

He denied any knowledge of the Western Cape bid, but said the same principle applied irrespective of the province in which ­Kopano did business.

On its website, Kopano bragged about being a “major shareholder in JSE-listed company Raubex Holdings”.

In its 2006 secretariat report, Cosatu said: “Kopano continues to operate within the vision of pursuing investment opportunities in a socially responsible manner that will generate income, and directly and indirectly contribute to the empowerment of workers and their communities.”

 - City Press

Comments
  • KCorsar - 2012-04-01 12:51

    This is what happens when a socially based union becomes embroiled in capitalism. This is a marriage across many divides, and is doomed to conflictive outcomes. The Union has social aims, the Investment company has returns of a different kind in mind

      Alan - 2012-04-02 11:39

      Hmmm and there I was wondering why Vavi had suddenly gone quiet on Toll Roads. Seems like the greedy fingers in the pie won the day again!

      Gerald - 2012-04-05 15:35

      FALSE REPR: Cosatu is not sniffing aaanything near 3% of R800m. It's +-R3m at best which is nothing for such a big org to scheme and rot over. R800m is revenue. To pay a mega queue of suppliers and taxes FIRST then if any remains DIVIDENDS/RESERVES LAST.

  • Kas - 2012-04-03 09:46

    Reporters like this should be banned from reporting...."Raubex received R800m for the project, which meant ­Kopano cashed in R24m due to its shareholding of 3% in the construction company" I presume this is the contact values - not the nett profit

      frans.visserdsb - 2012-04-03 13:07

      lol... yeah, the profit margin after tax for a major project like this is more likely to be in the order of 5%. Which is only about R40 million. So Cosatu may get about 3% of that, which would be R1.2million... and the bulk of this profit would more than likely be retained. Hardly earthshattering...

      Konstabel - 2012-04-03 14:51

      I also spotted that. Reporter is trying to make this story much bigger than it is. I don't think Cosatu is wrong in this case, the e-toll argument is not about building roads but how to fund these developments. If Costasu had shares in the actual company that got the e-toll system contract then it would be a big embarassment for them.

      frans.visserdsb - 2012-04-03 14:56

      I think if Cosatu had anybody on the tender board actually involved in awarding these contracts it could also be embarrassing. Which is pretty much what happened with the ANC and Hitachi on the turbines for Eskom's new power plants...

  • Belinda - 2012-04-03 10:00

    I suppose they all reckon if Mugabe can rob a country of it's wealth, kill a nation and it's people and get away with it, then why can't they. With all this uncertainty in the way SA is being run foreign investment is already hanging by a thread. If foreign investment pulls out of SA this country will become another African wasteland. The citizens must stand together and fight. United we will stand, but divided... yes we know that outcome.

      alansmartSnr - 2012-04-13 17:14

      I am anti union and anti Cosatu but the truth is that Cosatu's bid for the roads was done in 2009 with the view of improving roads for the world Cup Soccer fiasco. At that stage there was no indication or knowledge that the freeways would be tolled 3 years later. In fairness I think that we should support Cosatu in their resistance to the tolling of these roads and consider the fact that they have instructed their "investment arm" not to do anymore dealings with any of the other pending contracts regarding the roads to be tolled. We still need Cosatu's support in fending off these unfair costs.. and they are till stesdfast in opposing them. Lets give them a chance to prove their sincerity.

  • Andrew - 2012-04-03 11:15

    Vavi has been silenced with a huge payout. Money talks, bullsit still keeps to poor very poor. You are all the same, greedy pigs just looking after yourselves. Shame on you.

  • Johan - 2012-04-03 16:37

    this is irresponsible reporting in the extreme!!! i am certainly not a suppoter of cosatu per se, but winning a construction contract to build/extend a highway system has absolutely no connection with making money out of the use therof ... if that were the case cosatu (and the other construction companies) would take no fee for constructing and only earn via the tolling system ... what absolute rubbish to put it in this context ... vavi "shat in his pants" ... these are not quotes one expects from a credible source of reporting ... perhaps the information bill is not such a bad idea ... or just an ombudsman to fine the fool who wrote this report and the one who passed it for publication ...

  • Johan - 2012-04-03 16:44

    fransvisser ... sorry ... accidently reported your comment instead of lauding it ... you are absolutely right ... the anc benefitted R5bn via their shareholding by the awarding of the turbine contract to hitachi ... see the reports of the time when they "explained" the increase of madupi from R120bn to R150bn ... the question one should ask is why and how did the anc acquire the shares in the first instance ... what could possibly motivate a very successful internationally aclaimed company to issue shares to the ruling party of a country known for malfeasance ...

      frans.visserdsb - 2012-04-03 17:08

      no problem Johan - i see my comment has not been removed, so either the moderator is sleeping or he actually read my comment and decided it was inoffensive.. lol - I agree with your comment, although i do think the ANC investment arm actually bought the shares. It was the fact that Hitachi then won the tender with the ANC being very strongly represented on the tender board which stank. I actually think that COSATU in general and Vaviin particular are honest brokers, and honestly (if sometimes a little misguided in my opinion) have the best interest of the workers in mind. I think they have retained some of the moral fibre the ANC seems to be lacking - they are the ones in the ANC speaking out about the info bill, about corruption in government,about the e-tolls, about maladministration and lack of service delivery... I think this storm in a teacup has been created by someone in the ANC trying to embarrass COSATU as they are getting a little uncomfortable for the ruling party...

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