Coega funded from Eastern Cape coffers
Brett Horner

THE Eastern Cape government has plundered the coffers of its own departments to fund the controversial Coega industrial park and port development.

More than R800-million has been channelled out of provincial departments to finance the project. And, while infrastructure has been installed, it remains without a tenant. The port is expected to open in 2008.

The profligate spending on Coega has now fallen under the microscope of the Pillay Commission, which was set up last year by Premier Nosimo Balindlela to probe all of Eastern Cape’s finances since 1994.

This week auditors from Gobodo Forensic and Investigative Accounting revealed how the money was essentially “top-sliced” from provincial departments to make up for shortfalls in the provincial budget.

But as demands grew from Coega for further funding, and as the Department of Trade and Industry cooled its financial support, the province began siphoning money out of the Treasury’s reserve fund, where these “top-sliced” funds were kept.

Investigator George Papadakis said the money was appropriated to the Department of Economic Affairs, Environment and Tourism, which in turn passed it over to one of its public entities, the Eastern Cape Development Corporation (ECDC).

From there the ECDC paid the funds to the Coega Development Corporation, which it wholly owns.

More than R800-million went to Coega, Papadakis testified.

The ECDC insists it has merely acted as a “conduit” for the funds.

The Department of Economic Affairs, Environment and Tourism’s head of department, Naledi Burwana-Bisiwe, told the Pillay Commission her department held the view that Coega was a subsidiary of the ECDC.

“My department has never instructed ECDC how to vote,” she said.

It also emerged that while the Treasury department was happily pumping funds into Coega, it was applying lax monitoring measures over the precise spending of that money.

Samuel Bosire, a provincial Treasury official, admitted there was “room for improvement” by his department in terms of its monitoring role.

Coega’s value to the economy will be scrutinised closely next week when Gobodo chartered accountant Bernard Levenstein continues his testimony to the commission.

Levenstein said the evidence “will demonstrate that significant amounts were written off at Coega”.