amabhungane-|-construction-mafia,-political-murders-run-riot-–-and-companies-turn-to-taxi-bosses-for-help-|-business

AmaBhungane | Construction Mafia, Political Murders Run Riot – And Companies Turn To Taxi Bosses For Help | Business

  • The “extortion economy” is spreading, across the country and across sectors.
  • Companies have to cope with a complicit state, mushrooming “business forums” and limited economic space to accommodate them.
  • To counter the threat, some have turned to taxi bosses for protection. What could possibly go wrong?
  • For more financial news, go to the News24 Business front page.

On 11 September 2022, Mnqobi Molefe, 35, was shot dead while in hiding on the KwaZulu-Natal south coast, where he was councillor for the outlying eThekwini ward 99, which stretches inland from the town of Umkhomaas.

Molefe is one of more than 144 people assassinated in South Africa in 2022 and one of 21 local councillors murdered in KZN alone in the last year.

Most of the councillors, like Molefe, were ANC, killed in internal power struggles over local patronage networks.

Molefe’s family and friends say he was killed because of rival business mafias vying to control part of the spend on the R6 billion Umgeni Water Lower uMkhomazi Bulk Water project in the area.

It’s easy to eulogise Molefe. One of the last pictures of him shows his beaming smile and his palms together in prayer. “He was always like that,” a family member said. “He was a Christian. If you put him in the pulpit, even the preachers would be impressed. But I warned him about speaking truth. I said people will kill you for what you say.”

And they did.

Family members told amaBhungane that, at Molefe’s funeral, eThekwini council Speaker Thabani Nyawose had said the councillor died because of the new Ngwadini Dam and associated water purification and distribution works, which Umgeni Water said accounts for R1.3 billion of the R6-billion envisaged for a project on the KZN south coast.

Since Molefe’s murder, the Mail & Guardian has explored claims around his killing, which is one of a number of murders linked to the trouble water utility, including one being probed by the Special Investigating Unit.

A source close to Molefe told amaBhungane that the councillor attended a meeting at Umgeni Water in Pietermaritzburg on Friday 9 September 2022. He was murdered two days later in Margate after his security guards had knocked off and he left his hiding spot to visit his girlfriend.

In the weeks preceding his death, Molefe was totally unnerved. He buried his childhood friend, a mechanic named Mlungisi Buthelezi, and told mourners that whoever killed Buthelezi was coming for him. His paranoia was not unwarranted. In one night, three men connected to Molefe were murdered in a 75km radius.

Police say that on 22 August 2022, just before midnight, a municipal employee and associate of Molefe named Victor Cele was shot dead near Port Shepstone. In the early hours of the following morning, Buthelezi was murdered, as was Hlonipo Nzimande, another childhood friend. Police say the same gun was used in these three killings; nearly three weeks later, it was used to kill Molefe.

In November last year, two police officers, Mayendran Chetty and Thanduxolo Phelago from Umkhomaas police station, were arrested for the killings. Police are still on the hunt for a man Molefe’s family has been told is nicknamed the “Godfather”.

Clash of the forums

Molefe’s kin says he opposed local business forum members – from the so-called Ward 99 Business Forum – vying for a piece of the dam projects.

A source close to the slain councillor Molefe told amaBhungane that a member of the more established Durban-based Black Business Federation (BBF) tried to intervene on his behalf in his clash with local forum members.

The BBF (formerly the Federation for Radical Economic Transformation) grew out of the alliance of two notorious pioneers of the construction mafia: the Delangokubona Business Forum and KwaMashu Youth in Action Movement.

According to the M&G, the task team investigating political killings in KZN raided Umgeni Water’s headquarters in Pietermaritzburg in October to interview staff in connection with Molefe’s killing – including acting chief executive officer Sipho Manana and Simangele Njoko, the Contract Participation Goals (CPG) coordinator on the dam project.

The newspaper said the task team was understood to have seized a laptop and cellphone belonging to Njoko, along with records of the CPG meetings held to discuss work on Ngwadini.

So how did the BBF come to be involved in mediating forum activity for Umgeni Water?

The water authority set itself up as a champion of radical economic transformation, adopting a policy to set aside 35% of contract value for its Contract Participation Goals (CPG) to go to black-owned small business. 

Importantly, in this system, it is Umgeni Water that is responsible for the finalisation of the contract participation plan, giving the organisation tremendous power to dispense patronage, but also creating fertile conditions for a nightmarish festival of rent-seekers.

In March 2021, presumably to try to manage this tricky balance, Umgeni Water signed a Memorandum of Agreement with the BBF.

It is testimony to the ambivalent nature of the relationship that the contract itself stipulates that the parties must keep its existence and terms strictly secret, whereas, three months later, Umgeni Water issued a press release calling the agreement “an innovative and a groundbreaking move” that opened the way for accelerated enterprise development.

According to Umgeni Water, the agreement meant affiliates of the BBF “could potentially become participants in Umgeni Water’s enterprise development programmes”, but also that disruptions that Umgeni had previously endured might be avoided. 

“Affiliates of the Black Business Federation will first have to engage the structures of the Black Business Federation if they have a grievance or dispute with Umgeni Water, before resorting to any form of action, such as protests or blockades of Umgeni Water’s offices or construction sites,” the press release suggested.

So BBF would be peacekeeper as well as gatekeeper – and, as we’ll see, even made a claim as protector of the public purse. But more on that later.

Birth of a protection racket

First some background on the construction mafia. It helps to understand where they come from, why they emerged, and how the ruling ANC has nurtured them in the name of empowerment.

The construction mafia story is characterised by entrepreneurial violence, links to the criminal underworld, and to the ANC’s Radical Economic Transformation (RET) faction.

Construction mafias emerged in Durban around 2014 and have since invaded building sites around the country. They became business forums, sprouted up across the land, and are constantly morphing and expanding into other economic sectors.

The undisputed pioneer and violent champion of construction mafias is a man with open ties to former criminals and the ANC. Trueman “Bhamuza” Mnyandu started Delangokubona in Durban. The Zulu word Delangokubona translated into English means “I will be sated when I see it with my own eyes,” referencing transformation.

Mnyandu is a man nicknamed Bhamuza or “swollen”. One of his associates said he was like a balloon, big and loud. And powerful. Not long after he and his goons started invading construction sites, similar knock-off groups emerged, copying him. The leader of one of those was an equally imposing man named Malusi Zondi, who formed the KwaMashu Youth in Action Movement.

Turf wars

After some scrapping over turf, various construction mafias, including Mnyandu and Zondi, got together and established the Federation for Radical Economic Transformation, later renamed the Black Business Federation. Delangokubona still exists and operates independently, but apparently in a loose but cooperative alliance with BBF and other business forums.

The damage they have wrought is incalculable, but business and government both trot out a figure contained in an incisive 2022 report penned by Jenni Irish-Qhobosheane from the Global Initiative Against Transnational Organised Crime.

In her report, Irish-Qhobosheane unpacked the mafia phenomenon and quoted a 2019 report saying that about 183 projects nationwide, worth more than R63 billion, had been disrupted by the business forums, which demanded a stake in projects, typically 30%.

The violence associated with mafias is widely documented. Not a week goes by without a news story about site invasions, intimidation, extortion and murders.

So how did this happen?

Radical Economic Transformation

The rise of the construction mafia takes place against the backdrop of growing corruption in a sluggish economy. It is flourishing in a time of growing agitation around economic transformation, hobbled state capacity to deliver, and confusion around laws aimed at broadening economic participation.

As Irish-Qhobosheane noted in her report:

[E]conomically excluded and depressed communities not only provide fertile ground for recruitment into mafia-type organizations like the construction mafia, but also the conditions to ‘justify’ extortion activities from local business forums.

And as Ryan Brunette, a researcher at the Public Affairs Research Institute (PARI) has written, “[t]he central fact of contemporary South African politics is the emergence within it of a nationwide and mass-based patronage system.”

Political machines, he argues, offer “vast opportunities for the construction of corrupt syndicates” in which politicians and mafias operate in symbiosis.

It is unsurprising therefore that RET as a justification for kleptocracy gained traction after Jacob Zuma’s ascendancy to the president of the country in 2009, especially in his second term, when the state capture project accelerated.

Around the time of the “Zumification” of the state, the government started to run out of money for big projects and the lending environment for state-owned enterprises (SOEs) started to decline. These coincided with increasingly bad SOE performance and struggles to contract efficiently. SOE processes became overwrought in the service of political agendas.

Also unsurprising is that Delangokubona has been publicly connected to Zuma and to one of his key RET allies, former eThekwini mayor Zandile Gumede.

At the heart of the criminal case currently in court against Gumede is the allegation that she “carefully planned” with officials for ANC ward councillors and members of Delangokubona to benefit from a R300 million city waste tender.

In 2018, Jacob Zuma was honoured by Delangokubona at an event at Durban’s Olive Convention Centre. A year later, at the same venue, the eThekwini municipality sponsored an RET gathering that was attended by numerous business forums, including Delangokubona. The guest of honour was then-KZN premier Sihle Zikalala, currently spearheading the government’s fight against construction mafias.

The year 2018 was a seminal period in the history of construction mafias. In that year Mnyandu lead a shutdown of construction on the R276 million Hammarsdale Interchange on the busy N3 highway between Durban and Pietermaritzburg.

A company search lists him as a director of BBF, Delangokubona and various other business entities, including cooperatives, forums, a security firm and a towing business.

Mnyandu has been named in at least three interdicts by companies resisting site invasions.

Also in 2018, Zondi led a ragtag bunch of protestors who forced their way into the KZN provincial government offices at Natalia in Pietermaritzburg and held officials hostage while they met to discuss Department of Health procurements.

The protestors spat racial insults, danced on the tables and demanded that the head of the department reinstate a suspended supply chain official. The gang was later served with a high court interdict.

Despite the fact that it is negotiated in the shadows, sometimes evidence surfaces of the symbiosis between the political and protection economies. 

In July, according to the Sunday Times, Mnyandu demanded R5 million from the eThekwini municipality for protecting key city installations during the July 2021 riots in a deal brokered by the ANC but resisted by the city. 

While President Cyril Ramaphosa has described construction mafia activity as “radical economic robbery”, the ANC has been repeatedly criticised for negotiating with mafias.

In July, KZN MEC Sipho Nkosi was slated for suggesting talks with mafias responsible for multiple work stoppages on the construction of a high school in Umlazi, resulting in delays to the project of over a year.

Empowerment?

To what extent has the construction mafia been able to deepen real empowerment? Or is it just a protection racket and an opportunity to muscle in? RET champions sell it as direct access to economic opportunity, but to what extent is that true? Has there been a transfer of skills?

Academic Glen Robbins monitors infrastructural spending and economic growth.

Robbins says in eThekwini there’s no data to accurately measure these claims, or even to show how public procurement has changed in the last 10 years.

“You won’t get it. They don’t hold themselves up to scrutiny. They keep a facade that there is a strong political motive that ferments the idea that there is more to do.”

He says that where councillors used to be the gatekeepers to city work and used that knowledge to benefit themselves, taxi bosses and other enforcers stepped in, bringing their muscle into ANC branch meetings because they saw the revenue potential.

That is where the contracts were dished out, and they used violence or threats to crack open contract opportunities. 

In the taxi business, you operate a route, and you need protection. Taxi bosses use their talent and ability to exercise pressure and govern spaces. More about the taxi bosses later. They feature prominently in the bigger story about the construction mafia.

The law and the origins of 30%

Laws determine what percentage of state projects must be shared in local communities, but anyone working in this space has to untie a Gordian knot interpreting legislation and associated regulations governing these laws.

In short, myriad economic empowerment policies have a bearing.

Lawyer Wayne Pocock says a legal imperative was established in 2017 amendments to the National Treasury regulations (under the Preferential Procurement Policy Framework Act), which introduced the notion of 30% in contract costs going to local beneficiaries in government deals valued at over R30 million.

Controversially, those regulations provided for a policy of pre-qualification, whereby only certain groups, such as people “living in rural or underdeveloped areas or townships”, could be ruled eligible to tender or subcontract.

It was a statutory intervention to force public projects to give work to local black-owned businesses and it resulted in a host of legal challenges around definitions of local, including one that went all the way to the Constitutional Court, which in February 2022 overturned the regulations on the basis that the Act conferred the power to set preferential procurement policy on organs of state, not on the minister.

The Procurement Bill, tabled in Parliament in July this year, is meant to address these contradictions and to take into account the recommendations of the Zondo Commission: to deter corruption, collusion, and bid-rigging in public procurement by establishing a central procurement authority and procurement oversight bodies.

While the 2017 regulations – described by Brunette as “a centrepiece” of the Zuma faction’s patronage project – only governed public contracts, it was wilfully misinterpreted by construction mafias demanding a 30% share of private projects too.

Regulating a 30% “set aside” for state projects gave those beating the RET drum de facto leverage in the private sector.

So much so that Lucas Tseki, the CEO of Concor, one of the country’s biggest construction firms, told News24 he regarded the 30% as a “developmental premium” that the industry had to sacrifice to deliver.

READ | From AK-47s to business forums: This is how SA’s ‘construction mafia’ is winning

Mafia Hydra

Both the 2017 regulations and the national policy vacuum since the February 2022 court decision have helped worsen the free-for-all.

Durban attorney Peter Barnard has dealt with hundreds of court interdicts against forums, which he likens to a hydra, the multi-headed serpent of Greek mythology. You dealt with one, but it simply sprouted a host more.

Barnard says the 30% regulations were scrapped by 2022 revisions of the Preferential Procurement Policy Framework Act to change point scoring in the awarding of tenders and, critically, to allow state departments and state-owned enterprises to determine whatever empowerment preferences they like.

In one instance that Barnard dealt with, a government department wanted a portion of its contract spending at a certain price threshold to go to beneficiaries that were black, disabled women from Limpopo who were also Umkhonto weSizwe military veterans.

The Procurement Bill, if enacted, will allow the minister to set policy. But for now, it is up to each state entity to determine its beneficiary criteria.

These are often challenged legally on the basis of whether they are fair and reasonable. Broadly, it is a moot point, because the notion of 30% now seems entrenched as the norm.

Says Barnard: 

It created a dangerous precedent: ‘You are in my area, I want 30% of your business’.

Barnard says the National Treasury is supposed to maintain a database of approved contractors that is meant to be consulted in the awarding of state work, but this is reportedly not up to date and is ignored.

Companies are often stuck between a rock and a hard place. Police seldom respond to calls for help where there is blatant trespassing, theft and intimidation. Failure to enforce the law equates to the tacit promotion of business forums.

Barnard says firms have re-written contractual clauses so that subcontractors can’t fend off penalty claims for delays unless they first secure court interdicts against forums.

The law aside, a host of other practicalities impact companies. They have to work with project steering committees that determine the beneficiaries of work and are invariably made up of councillors and business forums who are often at odds.

The 30% “rule” has emboldened forums beyond the construction sector, Barnard says.

“We represented a client who built a mall. There were delays with the construction because the mafia demanded a share of the work. When the mall was built the same mafia demanded a say in who the mall tenants employed. That extended to contracts for cleaning, security and a host of other services.

“In another instance, a residential estate put out a security contract and stipulated that whichever company won the tender had to accommodate the forums. About six companies bid and the winning company had to deal with ongoing threats. Do you have to hire thugs to keep other thugs away?”

Yet the aforementioned News24 story also makes the point that the construction mafia, having grown using AK-47 firepower, “is slowly moving towards respectability as the industry embraces business forums in local sub-contracting”.

A success story?

Attempts by the business forums to regulate themselves – and, as a consequence, some say, formalise the unholy mess referred to earlier –  may be important markers of whether the extortion economy reforms or remains unstable and violent.

Zondi and the BFF want to present a new, sanitised version of the forums. 

Whereas Zondi once led a 2018 march on a government building that effectively held officials hostage, he now holds court in swish Umhlanga offices. He rides around with armed guards and has interests in 15 companies, including a security firm. Zondi has integrated into the mainstream and is mobilising to get more government work, which he describes as a “priority market” for business.

The organisation boasts 8 000 members, but is still in the process of “professionalising” its structure so that members can pay rates and databases can be set up.

Successful mafia businesses are able to sanitise their image, reinvest in legitimate businesses, and attract genuine support.

Makhosa Doko is a proud BBF member, the unapologetic face of restless, young business demanding a share in the economy.

While the organisation’s origins are dubious at best and Zondi, Mnyandu and other BBF pioneers have spoken publicly about the use of violence and criminal links to further their cause, Doko is part of the BBF’s energetic drive to clean its public image and attract members.

Doko, Zondi and others shrug off the “mafia” tag. They say they are fighting for a just cause.

Doko says he joined BFF because of its “unapologetic” approach to black empowerment, which government is not doing enough to advance.

“We understand the challenges of black business,” Doko says.

He is a civil engineer who graduated in 2011 and worked with big construction companies until 2015. Soon after, he met business forum members on site and, while they were “a bit rough and radical, I could relate to them.”

He feels they took on the old boys’ club in construction and demanded a place at the table.

Doko was gatvol of reporting to white bosses who never recognised black talent.

He recalls a city tender to rehabilitate a major pipe in Mahatma Gandhi Road. It was built in the 1950s by German engineers and needed Germans to repair it, as he remembers. Black engineers demanded the opportunity to work with the Germans for skills transfer.

“We were told we didn’t have the skills to do the job and blah, blah, blah, but the local white guys didn’t have the expertise either, the Germans did.”

The big companies only want black people as labourers, he claims.

“We positioned ourselves to get the work. We fixed most of the problems. We are not going to be popular. We are playing in a space dominated by certain white companies.”

Doko and other BBF members say that while they might be dubbed prime evil in some business circles, the federation is actually a bulwark against thuggery.

When BBF was formed in 2020, Doko says there was a rearguard action from armed forum members who wanted to pursue a more violent path.

Contestation

The debate about who exactly the BBF represents is still highly contested.

Forums, BBF members protest, abuse the organisation’s name for selfish benefit.

Meanwhile, some business forum members (there are hundreds in KZN alone) say BBF are fat cats out to score the lion’s share of work – something Doko, Zondi and the BBF brass vehemently deny.

Bontle Makgwa and the organisation’s secretary Wonder Jaca are adamant they are volunteering their services for free for the greater good. 

They run the BFF out of a plush corporate suite on the Umhlanga Ridge, which is the office of Sizwe Mchunu, the owner of MCPM, or Masithu Consulting and Project Managers, a company registered in 2018.

While some suspect otherwise, BBF, they say, is not being sponsored by anyone.

There is no hidden hand, no big money backing them to stay on their good side. Instead, they say they are on a determined drive to create a professional organisation that is the voice of young black business.

Makgwa says the rainbow nation is not a reality. She is not a founding member of BBF, but thanks to the organisation, she now engages directly with the CEO of Sanral. “I have learned things I would never have.”

BBF members say they are fighting for the future of all South Africans who are affected by dilapidated infrastructure, failed politics and “transformation policies adopted by old Afrikaners”.

Makgwa says the BBF fills a need because “you have to fight” to negotiate with white men who run construction sites “and get paid more”.

Jaca says BBF has helped farmers with labour issues and construction companies like Raubex on Sanral projects.

“Things are running smoothly,” Jaca says. “We unlocked projects, including for Umgeni Water. We found common ground through community liaison…projects must benefit everyone.”

Well, not everyone. This is exactly why this is such a highly contested space.Who gets to say who gets what?

Zondi has been grilled on the BBF’s membership and claims that the organisation leaders are an enriched few who demand first dibs on business.

A business forum leader in Durban said of the BBF: 

Those big shots get most of the work and we get the crumbs if we bow to them. We used to pay subs to them, but now we don’t and their WhatsApp groups are quiet now. They used us to get where they are now.

Delangokubona might enjoy favour in some ANC quarters, but the Molefe murder suggests mafia rivalry is fierce. Readiness to use violence determines bargaining power, and there’s always a newer, hungrier thug waiting in the wings.

Zondi said there are “lots of rogue forums going around” claiming to represent black business. The ground was made fertile by the government’s failures, which made BBF a magnet for frustrated people, including politicians and pastors who had created forums.

Questioned about his security, Zondi said he was forced to use bodyguards because people wanted a piece of his business. He admits, “I am associated with heavies.”

The R1 billion tender and the struggle for control of Umgeni Water

Umgeni Water is emblematic of the bitter fight for access to contracts and the battle to manage or manipulate transformation.

The water authority’s 2021 contract with the BBF was signed at a time when the entity was controlled by an interim board handpicked by RET darling Lindiwe Sisulu (then water minister) after she had unilaterally dissolved the old board.

It was possibly the high-water mark of political favour and corporate recognition for the business forums, and the confidential memorandum of agreement (MoA), valid until January 2026, effectively sought to bind Umgeni Water to consult with the BBF on local empowerment contracts.

The memorandum says Umgeni Water will “work closely” with the BBF in determining the selection criteria for Contract Participation Goals (CPG). The utility appears bound to invite the BBF to participate in the recruitment and selection process of the prospective participants in CPG and Supplier Development programmes.

The parties agreed to appoint representatives to a monitoring and evaluation committee.

And the BBF agreed, where requested, to use its networks and relationships to attend to any work stoppages involving Umgeni Water. 

But in June this year (after Sisulu and her board were long gone), when the BBF tried to use the 2021 contract to interdict a R1.1 billion information technology tender at Umgeni Water, the federation got a much more hostile reception, even though BBF president Zondi tried to argue he was protecting the public purse.

Things came unstuck when the BBF launched an urgent application in the Pietermaritzburg High Court to stop the award of the IT tender because the organisation wasn’t consulted.

In an affidavit, Zondi said the award of the tender was to a “suspicious” entity, the Maventic Consortium, which he alleged was “cobbled” together for the tender to upgrade SAP software and hardware infrastructure, for the amount of R1 108 633 541.

Maventic, according to its website, is based in Pinewood Office Park in Sandton. Its representative cited in court papers is Neilan Naidoo, a former EOH employee.

The tender award was formalised on 23 May 2023. 

Umgeni Water, Zondi alleged, “proceeded with stealth, obscurity and urgency” to award the tender to the exclusion of members of the BBF “despite having signed a Memorandum of Agreement to so consult and involve them”.

He claimed the price was “unreasonably excessive”. 

This attempt to wield lawyers rather than AK47s was spectacularly unsuccessful.

Umgeni Water Acting CEO Dr. Sipho Manana said in court papers that the BBF had no right to interdict a tender. He said the memorandum of understanding between BBF and Umgeni served mainly as a “guideline” for the parties to determine Community Participation Goals.

“It does not afford [BBF] any entitlement to participate in the award nor an entitlement to dictate CPG initiatives after an award.”

He said the MoA was concluded in the wake of the 2017 regulations and these had now been set aside.

Maventic’s Naidoo said it was apparent that the BBF was trying “to gain control over all of the business dealings of Umgeni Water through absolute enforcement” of the MoA. He said Umgeni Water had indicated it would terminate the MoA.

Naidoo said the BBF wanted to ensure that “all Umgeni Water business is awarded exclusively to its members”. This would amount to an unfair exclusion of all local persons who were not members of the BBF.

Both Umgeni Water and Maventic slammed the BBF on procedural grounds and Judge Rishi Seegobin agreed. The BBF’s attempt to interdict Umgeni Water was struck off the court roll for lack of urgency on 15 June and the BBF was ordered to pay punitive costs.

Zondi appears undeterred.

In an interview earlier this year, he said the group’s expansion wasn’t limited to construction and would increasingly involve the use of litigation: 

I think it is just beginning, they thought we were just construction…imagine when we go to the ports and Transnet. Imagine with logistics. We need drastic engagement… We are going into all sectors of the economy. We are mobilising.

Small mafias and big mafias

In KZN, business forum members boast about how they have “captured” Sanral, Raubex and others.

In Zulu, there is a saying that is used a lot these days, especially in forum talk.

It goes like this: “ukuthela ukudla kwami ngenhlabathi.” It means “don’t come here and throw sand into my food” and it explains how things are divvied up. Muscle and the ability to protect your territory are key.

A business forum member told the story of a builder in KZN who secured a tender in an area controlled by a taxi boss:

This upset the taxi boss very much so he demanded a R200 000 penalty fee. That’s it. The guy had to pay it, no questions asked. The taxi boss is a big guy. You can’t argue with him.

The boss of a sizeable construction company in KZN challenged notions around mafias.

“Hey my friend, we all belong to clubs, let’s face it. The new government calls us construction companies mafias because they say we colluded. It’s a tough business. We have all been attacked. Competing forum members shoot one another. Taxi bosses demand we use their transport if we work in their areas. Municipal councillors lean on you, traditional leaders lean on you, churches lean on you. All this happens while your suppliers and consulting engineers try to stiff you. Mafias, huh? There are so many.”

So Barnard’s question hangs in the air: “Do you have to hire thugs to keep other thugs away?”

Faced with site invasions, some company bosses have an answer: they have turned to taxi strongmen.

Taxi bosses

Irish-Qhobosheane’s report noted clear links between forums and political players and “and elements within the mass taxi industry” that were being used as enforcers.

Most big taxi companies run their own security firms and are heavily armed.

A source said:

Look at how the big construction companies have handled this in KZN. They have removed construction forums by bringing in the taxi industry. The big taxi businesses control demarcated areas… These are the guys with the firepower. The big companies are paying them so they can operate without fear or disruption.

 A construction company boss explained how a taxi boss foisted himself on his business: “We were threatened by guys brandishing big guns. Police don’t want to confront them, so we had to talk to them. Now we have this big taxi guy in control of our security.”

A construction industry insider said:

The mafias know the construction companies are sweating. The economy is bad and its easy to rack up millions in penalties if your project is late. Your priority is the safety of your employees and getting the job done on time. My employees lives are being threatened. Will it kill me to accommodate these guys who arrive with guns?

The choice is either to accommodate mafias or hire someone heavier than them.

The taxi industry and the security companies linked to key taxi bosses provide a useful platform for mafia businesses to grow geographically and to move beyond construction into other economic sectors.

A leading taxi boss in Durban told amaBhungane: “I’m not relying so much on taxis for business these days. The big money is in security. Raubex had problems with construction mafias, so we sorted it out. There is no trouble there now.”

In South Africa, the construction mafia mimics the taxi business in that big players dominate key routes. Violence entrepreneurs are expansive and are always looking for new opportunities.

On the KZN south coast, a taxi boss extended his construction mafia enterprise by demanding protection money from retailers at a local mall. The same patterns seem to exist in Gauteng and Mpumalanga, primarily around the mines and Eskom, and in the Western Cape through gangs.

In one case, still to come before court, a Gauteng taxi boss took over a mine security company, forced his way into the mine’s procurement process and set himself up as the gatekeeper to the community benefit scheme for locals living around the mine. He has absolutely no connection with the mine.

In December 2022, Bloomberg interviewed a dozen of the biggest mining companies in South Africa and they all told horrendous stories of opportunists illegally muscling in on their business.

The article quoted Paul Dunne, CEO of Northam Platinum Holding, the operator of the world’s deepest platinum mine. “The procurement mafia mobilises the community for its own devices, which is really straightforward extortion,” he said.

In KZN the mafia includes big taxi families, which seems to work, for now. “There have been no more interruptions since they got involved,” a source said.

The construction industry needed protection from numerous forums. “They were paying different forums every day, so they probably figured: let’s centralise this thing. The big companies must have met these big guys and sat down and said we will give you a percentage. Now they operate without fear or disruption.”

This is not different from how New York mobsters prospered in the construction business in the 1970s. Organised crime controlled the construction industry through unions and by dominating concrete companies. Crime families also rigged tenders and took kickbacks from winning bidders.

The Mkhize brothers

It’s hard to imagine a starker example of the taxi boss trajectory than the Mkhize brothers.

Mathula Mkhize is a taxi kingpin in eThekwini who controls taxis in the western areas of greater Durban.

A former regional chairperson of the South African National Taxi Council, Mkhize is also a co-accused in the corruption trial involving former mayor Zandile Gumede.

Mkhize, a businessman with diverse interests, travels with a crew of bodyguards and in 2020 was among a group of taxi bosses who blockaded the KZN transport MEC because of their objections to the city’s plans (since stalled) for a new bus rapid transport system.

According to court testimony in the Gumede trial, in one instance, Mkhize went to the offices of a city official to “ensure” payments were made.

Yet it seems his controversial background has not stopped Mathula from being appointed as the gatekeeper-cum-peacekeeper for one of the largest government infrastructure projects ever, the multi-billion rand greater N2 N3 corridor upgrades in KwaZulu-Natal, which are expected to take 8-10 years to complete and to deliver up to 15 000 job opportunities over the period of construction.

According to the January 2023 edition of Sanral’s in-house magazine, By the Way, Mathula Mkhize serves as “Project Liaison Committee Leader on this project”.

This month Mkhize made an extraordinary address at the funeral of his brother, Nkululeko.

Nkululeko was a high-rolling tenderpreneur who terrorised communities around Richards Bay on the KZN North Coast. He and an accomplice, former police officer Sabelo Cele, were killed on September 20 when police stormed his home at Zimbali, a luxury gated estate in Ballito.

The incident followed the shooting of five people in Richards Bay the previous day, leading police to the Zimbali residence.

Nkululeko was a notorious extortionist, taxi and tow-truck boss in Richards Bay.

At his funeral his brother Mathula apologised for his behaviour.

“I want to apologise on behalf of my brother,” Mathula told mourners at the heavily guarded funeral.

He said, according to a Sunday Times article: “I know that there are those who are here to celebrate his (Mkhize’s) death. If you are here today and you’ve cried and grieved because you lost your family members at the hands of my brother, I want to apologise on his behalf. Go home and tell your family that we, as his blood, are apologising for him, his actions, and the pain you all endured.”

Entrepreneurial violence

For the most part, the involvement of big players with a monopoly on violence offers stability, though this is not always guaranteed.

In a violence economy, there will always be challengers. 

Gareth Newham from the Institute for Security Studies says the alarming construction mafia disruptions are part of a notable increase in most forms of organised crime over the last five years.

This crime is connected to politicians, connects various illicit markets, is embedded within state and private institutions and is entrepreneurial. The criminals and their networks are becoming increasingly organised, strategic and extremely violent.

Violence ensures impact, network discipline and recruitment, which fuels the need for assassins.

A key enabler of organised crime, Newham said, was the severe deterioration of the state’s intelligence and law enforcement capabilities, primarily due to the politicisation of its leadership.

Newham cited one example of the impact of this state capture of law enforcement.

Between 2012 and 2022, the ability of the police to solve murder dockets dropped by 55% despite its budget growing by 86% in the same period.  This meant that only 14.5% of murder dockets were solved last year. Most murderers get away with it.

This is why mafias are growing and becoming more entrenched in all sectors of the economy.

State response

What is the state doing to respond to the mafia threat? Apart from a lot of public posturing, not very much, it seems.

Police, while publicly boasting about 772 arrests and 52 convictions, since 2019, aren’t doing enough to curb the scourge, according to organised business.

Collaboration between Business Against Crime South Africa (BACSA) and the South African Police Services between October 2022 and February this year saw the identification of 143 suspects on a range of charges including murder, public violence, intimidation, assault, damage to property, pointing weapons, kidnapping, trespassing and extortion.

Zikalala, now Minister of Public Works and Infrastructure of South Africa, repeats the SAPS figure of over 700 arrests in connection with the construction mafia, but pressed for details on who was arrested and where, refers inquiries to the police.

A senior policeman actively involved against the mafias echoed the skepticism of business about the arrest figures.

“I’d like to see the minister’s list,” he said. “It is nowhere near that number.”

The police officer said SAPS had no dedicated unit to combat business forums in KZN. The eThekwini Metro Police has a unit of about 20 dedicated members.

Crime Intelligence had profiled key mafia members, the police officer said, but there was no coordinated effort to deal with them.

“Local cops don’t want to act against the mafias because the government isn’t resolute. Some police are corrupt and then there is the problem of councillors being involved, which gives the claims around local participation legitimacy,” he said. 

BACSA’s Roelof Viljoen says the body is unable to accurately measure the state’s response to mafias. “As this information is not readily made available, we work on perceptions.”

Effective reporting is vital and the public record is limited to court proceedings.

Arrest information was not made public, he said.

Gregory Mofokeng from the Black Business Council says politicians are cooperating with criminals and councillors, who often appear together on site stoppages. Councillors are more than encouraging people to stop projects because “certain individuals are not benefitting,” he told a webinar hosted by Creamer Media in July. It appears as though mafia “foot soldiers” rather than “kingpins” are being arrested.

But is the state likely to act against the mafias if its patronage network is intrinsically connected to them? Mafia work outages are on the increase and extortion rackets are extending into every sector of the economy.

Endgame

So, what’s the endgame?

Given how endemic business forums and construction mafia are and how weak the state’s response to them is, a key question is how this is likely to play out.

Two scenarios present themselves:

  1. The big guys want to go legitimate and keep the golden goose alive, so they limit the violence and keep things tidy. They are not too greedy and understand how business works. The first generation are mobsters prepared to shoot and kill and the next generation becomes lawyers and accountants.
  2. The other trajectory is way more unstable. Operators outbid one another in the violence stakes. This leads to fragmentation and chaos. Imagine Russia without a strongman like Putin to keep a lid on things.

This article was made possible, in part, by a grant from the Henry Nxumalo Foundation for Investigative Reporting.

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