Naledi (Vryburg): Municipal Manager Jailed Eight Years for R60m RDP Housing Fraud; Municipality Later Stripped of Powers Owing Eskom R283m

R60 million (claimed for work not done; ministerial reply to Parliament)

documented loss

In 2007 Naledi's municipal manager appointed Khasu Engineering Services without procurement to build 3,000 low-cost houses at Vryburg; the contractor claimed R60 million for work not done. Zwelakhe Erick Phukwana was convicted on 11 February 2021 and sentenced to an effective eight years with a R454,000 confiscation order, as confirmed to Parliament. By 2019 the municipality itself had collapsed, owing Eskom R283 million, and the province stripped it of executive powers.

The Record The Evidence The Named What Was Lost Implicated Institutions The Paper Trail

The Record

Naledi Local Municipality, seated at Vryburg in the North West, was meant to deliver 3,000 RDP houses at Vryburg Extensions 25 and 28. In 2007 municipal manager Zwelakhe Erick Phukwana appointed Khasu Engineering Services to establish the township without any procurement process. The contractor then claimed R60 million for work that was not done. The case was registered in 2012 (Vryburg CAS 72/02/2012).

The Minister of Justice confirmed to Parliament in a written reply of 15 March 2022 that Phukwana had been convicted on 11 February 2021 and sentenced to an effective eight years' imprisonment with a R454,000 confiscation order, and that the prosecution of the contractor leg — together with a separate 2013 electrification-tender case — was still pending. The SABC had reported the Hawks putting the housing figure at more than R216 million; this archive uses the R60 million confirmed in the ministerial reply.

By November 2019 the municipality itself had failed: R283 million owed to Eskom, over R500 million to other creditors, staff pension deductions unpaid. The North West government stripped the council of its executive powers. Mayor Neo Schalk told the SABC: "People are getting away with murder."

The Evidence

Named

Institutions

Sources

Sector: Human Settlements / Housing · Scope: municipal (NW)

Alleged & Implicated

People documented as perpetrators, enablers, beneficiaries, orchestrators, political protectors, accused, or convicted in this case. Unless the case status is Convicted, allegations remain untested.

EV·01

Zwelakhe Erick PhukwanaConvictedConvictedFormer MM; eight years, R454,000 confiscation

What Was Lost

Municipality under provincial control.

legal proceedingcompleted2019-11-13
Province removes the council's executive powers; R283m owed to Eskom.
convictioncompleted2021-02-11
Phukwana convicted 11 February 2021; effective eight years; R454,000 confiscation order.
Completed prosecution of a municipal manager.