The Lottery and the mystery multimillion-rand boxing arena

First published by GroundUp

A shroud of secrecy surrounds the budget for a Lottery-funded construction project in the tiny hamlet of Storms River in the Eastern Cape, which began a year after a multimillion-rand grant was awarded.

A grant of R23.7-million was given to the Nunnovation Africa Foundation in July 2017, according to the list of 2017/18 beneficiaries published on the website of the National Lotteries Commission (NLC).

But construction only began a year later in July 2018, according to Pumelelo Kate, the municipal manager of Koukamma Municipality, under which Storms River falls.

Construction was also beset by regular delays, according to Khaya Lukwe, the owner of Khaya Construction, the main contractor at the time. Lukwe subsequently abandoned the project over “payment issues” which, he said, Nunnovation blamed on NLC processes.

The estimated handover of the new building will be in January 2020, according to the NLC, three and a half years after the grant was approved.

“The consultants and the contractor told us that each phase of the construction needed to be approved by the NLC and engineering inspections needed to be done before construction could continue,” said Kate. “This, in some instances, could take weeks and even months before approval.”

Another concern was that the municipality has been unable to find out the project’s price tag.

“We have tried to get a figure relating to this project but unfortunately the implementers were not prepared to share this information, except that the budget was R14,500,000,” Kate said in a WhatsApp response to questions.

“We do not know anything about R23.7-million. I also cannot tell you about the value of the work on the ground. My understanding is that the multi-purpose community centre will be equipped and furnished.”

Lukwe said he had charged R8-million for the “main hall”. This did not include the cost of a kitchen.

“Problems arose when Nunnovation failed to pay me on time. They came with various excuses that the NLC was not paying them. They would pay me per stage and at times they would take time to authorise the next stage,” he said. Lukwe said he finally quit the project as a result of “intermittent payments”.

“It seems they were taking money from one project to fund another project elsewhere. I could not continue with such a relationship,” said Lukwe.

Nunnovation originally contracted Kencad Consulting Engineers for the project. They, in turn, subcontracted Khaya.

The owner of Kencad, who refused to give his name, said Nunnovation wished to speak to this reporter. He said that he would only supply a contact number for Nunnovation if I told him who had given me his number. Having undertaken to protect my source, I declined.

It is also unclear exactly what is being built with the Lottery grant.

From the outside, the building, which is still under construction, looks like a hall. But Nunnovation still states on its website that it is building a “boxing arena”. And the NLC, in a very recent blog about the project, also describes it as a “boxing facility”.

“The NLC pays non-profit organisations (NPOs) based on the terms and conditions outlined in the grant agreement. This was the case with the NPO that was funded for the construction of the boxing gym,” NLC head of communications Ndivhuho Mafela, said in response to emailed questions.

And even though the amount of the grant has been published on its website by the NLC, Mafela refused to confirm that this was the amount paid to Nunnovation.

“We are bound by a grant agreement not to reveal amounts granted to beneficiaries,” he said. This year, for the first time in 18 years, the NLC has refused to make public the names of its beneficiaries or the size of the grants they have received.

Attempts to speak to Nunnovation were unsuccessful as the contact phone number on their website does not work. They also did not respond to a request for a phone number to call them sent via a contact form on their website.

The executive director of Nunnovation, Kathu Mashau previously told the Daily Dispatch that, after consultations with the local community, they had decided to build a “multi-sports centre” rather than a boxing arena.

Kate said that the municipality informed Nunnovation that there was no need for a boxing arena and what was needed in Storms River was a community hall.

Nunnovation says on its website that the facility would be run by Boxing South Africa (BSA). But BSA told the Daily Dispatch that it knew nothing about it.

Boxing SA Eastern Cape manager, Phakamile Jacobs, told the Dispatch: “What you are telling me is news as we know nothing about a boxing arena that has been built in the province.” And BSA Eastern Cape representative Nceba Dladla added: “I did not even know that Storms River is under my jurisdiction. I am surprised if you say there is a boxing arena there and the question is, who does it serve?”

Mafela did not answer detailed questions about the project and instead said: “The NLC signs grant agreements with funded NPOs. The agreement clearly outlines the terms and conditions of the grant including obligations of the two parties (NLC and NPO) and this is a confidential document.”

Equally mystifying is why the NLC would give tens of millions of rands to a Gauteng-based non-profit company for a multi-million rand project in the Eastern Cape. Nunnovation has no apparent track record of handling large — or even small — scale construction projects.

“The NLC has funded Nunnovation Africa, a non-profit organisation, which applied for the funding of a boxing facility in Stormsriver in the Eastern Cape. Nunnovation Africa like many other of our grant applicants applied for funding through our grant funding structure,” the NLC said in a blog published late October. The NLC described Nunnovation as a “registered and reputable non-profit company founded in 2014” (a year earlier than when it was actually first registered).

The NLC said the foundation was “strategically aligned to drive the development agenda of transforming lives through innovative solutions”. It does not explain how an organisation involved in the innovation space was considered appropriate to manage an almost R24-million construction project.

Nunnovation is apparently based in Centurion, Pretoria and, according to its CIPC (Companies and Intellectual Property Commission) listing, its registered address is 5th floor, Protea Hotel, Hendrick Verwoerd Street. It has four active directors, according to the CIPC: Nathaniel Mashau, Dolly Netshisaulu, Lethabo Ramohlale and Nkele Sibiya, who were all appointed at the time that Nunnovation was registered as a non-profit company (NPC) on 21 May 2015.

On its website, Nunnovation describes itself as an “innovation catalyst” involved in the “innovation skills development” and “thought leader dialogues”. The organisation also publishes a digital magazine focusing on innovation.

Storms River ward committee member, John Busakwe, said that “a handful” of local residents were hired to work on the construction.

“We would have preferred to have local contractors doing small jobs but that didn’t happen. They were promised paving and fencing jobs, but we see there is another company from outside this place fencing already, ” said Busakwe. DM