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The Democratic Alliance (DA) is in possession of a copy of a contract that reveals that Devgroep Investments, a company represented by Mr. Sipho Mashinini, the CEO of the National Home Builders Registration Council (NHBRC) was awarded a contract by the Gauteng Department of Local Government and Housing for the construction of 600 housing units at a cost of R32-million. The contract also makes provision for a phase 2, which comprises the construction of another 832 units at an approximate cost of R45-million.

A copy of the contract is available upon request.

Under normal circumstances this would not raise any eyebrows. However, Mashinini was until recently the Acting CEO of the National Home Builders Registration Council (NHBRC), a statutory body established in terms of the Housing Consumer Protection Measures Act of 1998 to protect the interest of housing consumers and to regulate the industry. He has since been formally appointed as CEO of the NHBRC as of 1 April 2010.

The contract reveals that on 17 August 2009, Devgroep Investements (Pty) Ltd, ‘represented' by Mashinini entered into a contract with "the Provincial Government of Gauteng in its Department of Local Government and Housing for the construction of 1431 houses in Soshanguve Block W." This is during the same month that Mashinini took on the role of Acting CEO of the NHBRC.

The awarding of a government housing contract to Devgroep, a company represented by Mashinini, constitutes a direct conflict of interest. In his capacity as CEO of the NHBRC, he has the duty to protect the interests of housing consumers against unscrupulous home builders and manage a warranty fund in the event of claims against such builders who do not fulfil their obligations. It is unclear how he will adequately, and in an unbiased fashion, perform this role if he has a vested interest in a company responsible for the development of RDP houses. This effectively places him in the position of judge, jury and the defendant should his company, like so many in this market, provide shoddy workmanship. This could possibly be an issue that might arise particularly as Mashinini does not have a track record as a developer.

The DA will be issuing parliamentary questions in order to gain clarity on whether the contract for the construction of these units was put out for tender, if so on what grounds the tender was awarded and whether the tender procedures were followed in the awarding of this contract.

I will furthermore be calling for the resignation of Mashinini as CEO of the NHBRC in the Human Settlements budget debate later today.