Johannesburg road explosion — a R196m tender, R19m vanished, and no progress in sight after a year

The 500m explosion site remains a red gash — broken and unusable. (Photo: Felix Dlangamandla)

By Ferial Haffajee

3 Sep 2024

City officials said the Lilian Ngoyi Street rebuild would be a model of how to recast Johannesburg’s inner city. A year after the explosion, the city appears only to have wasted R19m on a contractor with a history of non-delivery.

In July 2023, an explosion on Lilian Ngoyi Street in Johannesburg’s CBD rocked the city and made global headlines. The then mayor, Kabelo Gwamanda, City Manager Floyd Brink and Gauteng Premier Panyaza Lesufi promised swift action and an urban upgrade that would be a benchmark for the historic part of the city that suffers from urban blight.

joburg road explosion tender Lillian Ngoyi Street remains a construction site on 28 August 2024. (Photo: Felix Dlangamandla)

joburg gas explosion Destruction caused by a probable gas explosion on Lilian Ngoyi Street in central Johannesburg on 19 July 2023. (Photo: Felix Dlangamandla)

More than a year later, our visual investigation reveals that the 500m explosion site remains a red gash — broken and unusable, hindering a pan-African trading economy that generates R10-billion a year for SA.

The tender to fix the road is set at R196-million, while R19-million has vanished from a contractor that has previously botched massive infrastructure tenders in Johannesburg.

The street was slated for reopening in December 2024, but will now reopen — perhaps — only at the end of 2025. Step Up Engineering has been paid R19-million with no visible work done, according to photographs and despite six warnings from the Johannesburg Roads Agency (JRA) which oversees the project.

In a statement on 27 August, the JRA said Step Up had been censured for outstanding documents, non-adherence to project requirements, contract breach on deliverables and poor performance. Despite this, Step Up was still paid R19-million, with the final payment made last week.

A desultory history

News24 revealed that Step Up is the new name of Setheo Engineering, a company with a desultory history in the city. When Herman Mashaba was mayor, City Power terminated a contract with Setheo and took the company to court.

For R66-million, it built only a tiny perimeter brick wall rather than the R168-million Eldorado Park substation it was contracted for, said Mashaba at the time. That substation was finally opened on 3 September, seven years late, with a price tag inflated by mismanagement.

joburg road explosion The 500m explosion site remains a red gash — broken and unusable. (Photo: Felix Dlangamandla)

“I have previously stated that our priority is to bring stability to City Power, and terminating the contract with Setheo is one of the steps we are taking to ensure that projects are properly managed and implemented to ensure better service delivery to our residents,” said Mashaba at the time.

The case against Setheo is still in court.

The city did not pick up the name change of the company and the cross-holding by the directors, which even a simple Google search revealed.

“Due process was followed during the appointment of Step Up Engineering, JRA conducted financial ration [sic] analysis to assess the financial health of the company and the outcome of the exercise indicated that the company is in good financial standing to complete the project,” said the JRA.

It said that the company had a requisite construction industry grading for projects awarded at over R200-million.

“Step Up and its directors do not appear on the National Treasury’s list of defaulters.”

Step Up Engineering was one of three bidders, said the JRA.

Asked what visual inspections it had done as the failure of the exploded road project became apparent, the roads agency said: “The JRA has an Employer’s Agent (the consultant) that is stationed permanently on site for the supervision of the contract during implementation.

“There is also a JRA project manager permanently attached to the project who works closely with the consultant. Also, the project has scheduled progress meetings, technical meetings, contract meetings and ad-hoc meetings and the JRA project team forms part of these.”

Wasteful expenditure

When asked if the road was an example of the Johannesburg metro’s inability to manage contracts, which the Auditor-General said last week was a factor in the growth of fruitless, wasteful and unauthorised expenditure in all SA’s metros, the city said: “The project was managed in accordance with the industry norms and standards in line with the General Conditions of Contract.”

After the explosion, probably caused by a gas leak, Daily Maverick revealed that the city did not have enough engineers and specialists to deal with its underground tunnel network.

In December 2023, Daily Maverick’s Nonkululeko Njilo returned to the street to assess progress and found that the city had been unable to establish the origin of the blast, nor had it started to rehabilitate the road.

In January, City Manager Brink said the city’s CFO would oversee the street’s repair, but the buck has now been passed to the JRA, which previously appointed a CEO who lied about his qualifications, as this report shows.

“We were very clear from the onset that we would waste no time in ensuring we act with diligence and speed to ensure the speedy implementation of the supply chain management process to commence with rehabilitation work,” said Brink in the January statement.

“We also implemented measures to guarantee fairness and transparency in the process supported by the active involvement of probity throughout all stages.”

Neither Brink nor the city’s spokesperson, Nthatisi Modingoane, responded to Daily Maverick’s numerous requests for clarification on what had become of these commitments.

In January, former mayor Gwamanda said the Lilian Ngoyi Street contract would include a public environment upgrade to make it a model of how the city would recast the inner city. Pavements would be widened to accommodate hawkers and ablution facilities would be designed and planned.

Urban specialists lauded the plans.

“This is thus the beginning of a new era for Lilian Ngoyi Street, the High Court Precinct, and the inner city as a whole,” said Gwamanda at the time.

He is no longer mayor and Lilian Ngoyi Street is still awaiting its new era. DM

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A desultory history

Wasteful expenditure