We once again copy you the Confidentiality Clause in the signed SLA between the City of Ekurhuleni

and the Joint Venture for your information. The Confidentiality Clause clearly indicates that the
Service Provider must desist from disclosing private information to third parties without express
written consent of the City of Ekurhuleni. (This confidentiality clause extends to all parties of the
contract including Community Based Contractors.)

In addition, the Company has compiled a Close -Out Report which has been in line with the Contract
Specification. The Close Out Report gave the City of Ekurhuleni, vehicles and Plant that were handed
over to the Community Based Contractors, Education, Training and results thereof that were given
to the Community Based Contractors, and monies that were paid to the Community Based
Contractors from the investment accounts. It is assumed that since it is almost three months after
the closure of the contract, the City has analysed the Report in line with its supervisory role and the
aims and goals of the contract. The Joint Venture has not received any adverse comment from the
City of Ekurhuleni on the Closeout Report.
Once again, the joint venture advises that the correct way to seek information on the performance
of this contract is to approach the City of Ekurhuleni, who as custodians of this contract had a duty
to ensure that the contract was executed in line with is objectives and scope of work as detailed in
the scope of work. The Reporter has in any way must approach the City of Ekurhuleni for comment
before publishing the report for the veracity of the information and to deal with any information
that may adversely affect the City of Ekurhuleni.

If the Community Based Contractors has any objection to the way the contract was handled, there
are contractual avenues to deal with the contract. We must put it on record that to date the joint
venture has to date not received any dispute from the Community Based Contractors based on the
contract between the Joint Venture and the Community Based Contractors.

In view of the above, we recommend that your questions been forwarded to the Head of the
Department of Waste Management at the City of Ekurhuleni Ms F Mabhindisa for consideration.

The Joint Venture will however give the following response to your questions:

Question 1. According to a 2018 Audit and Risk Management Solutions forensic investigation
(Tembisa) into the A-WMS 11-15 waste management contract, MCC/Before Dawn treated the CBCs
as employees not as sub-contractors – what is your comment?

Answer: The Joint Venture has not seen the 2018 Audit and Risk Management Solution Forensic
Investigation (Tembisa). It would have been proper that if there were a forensic report adversely
affected the Joint Venture, that the Joint Venture would have been asked to comment. As a result,
the Joint Venture do not even know what “treating Community Based Contractors like employees
mean”.

Right at the inception of the Contract, the City through its Contract Division held a joint meeting with
the Community Based contractors, All the five Development Contractors and the City of Ekurhuleni
Operations Department.

The roles of each party were explained and the protocols of handling each dispute was explained.
For the Community based Contractor, the protocol was first through the Development Contractor,
then through the Head of Waste Management and then through the Member of the Mayoral
Committee. The Joint Venture is not aware of a complaint from the Community Based Contractor or
the City of Ekurhuleni that the Joint Venture was “treating Community Based Contractors like
employees”.

Question 2. The report found that the contract between MCC/Before Dawn JV and the Community
Based Contractors was one of employment not a subcontractor…From the contracts amaBhungane
have seen this arrangement remained the contracts were never changed.

Answer: The Joint Venture note that amaBhungane have seen “an arrangement” but do not expand
on what they have seen. Suffice to say that the contract was seen and vetted by the City of
Ekurhuleni before being signed with the Community Based Contractors, the contract was explained
to the Community Based Contractors before being signed and the Community Based Contractor had
opportunity to take the contract to their legal representatives before signing the contract. During
the execution of the Contract, the Joint Venture received no complaint from the Community Based
Contractors nor the City of Ekurhuleni about the Contract.

Question 3. The forensic report also found that municipality overpaid the JV R 7,6 million for non-
existent service points…did you pay back the municipality, if yes please give details and if not why?
Answer: The Joint Venture has not seen the 2018 Audit and Risk Management Solution Forensic
Investigation (Tembisa) (The Joint Venture Assumed that Amabhungane are in question 3 also
referring to the 2018 Audit Report). It would have been proper that if there were a forensic report
that adversely affected the Joint Venture, that the Joint Venture would have been asked to
comment. As a result, the Joint Venture is not aware of the alleged R7.6 million overpayment. If this
were true, the Joint Venture assumes that it would have been advised to repay the overpayment
back, the Contract Cancelled and that it would appear in the City of Ekurhuleni Financial statements.

Question 4. On page 23 under executive summary, the report states, “We concluded that money
paid for the management fees services by the development contractors is fixed and does go to the
Development Contractor and that the money collected for services rendered by the Community
Based Contractor is appropriated by the Development contractor. We calculated that in Tembisa
area, each Community Based Contractor will be owed R2 690 119,14 on average by the
Development Contractor.” Did you pay this amount to the CBCs?

Answer: The Joint Venture has not seen the 2018 Audit and Risk Management Solution Forensic
Investigation (Tembisa) (The Joint Venture Assumed that Amabhungane are in question 4 also
referring to the 2018 Audit Report). It would have been proper that if there were a forensic report
that adversely affected the Joint Venture, that the Joint Venture would have been asked to
comment. As a result, the Joint Venture is not aware of the alleged R2, 690, 119.14 on average owed
to each of the Tembisa Community Based Contactors by the Development Contractor.

The 2018 Audit and Risk Management Solution Forensic Investigation did not consider the following
costs associated with the services rendered by the Community Based Contractors:

i) Capital redemptions for plant and Vehicles.

ii) Maintenance of Plant and Vehicles
iii) Fuels
iv) Etc.

It would have been advantageous of the Forensic Investigators of the the 2018 Audit and Risk
Management Solution Forensic Investigation to have studied the Scope and specification of the
work, the associated contracts and minutes of meetings held in support of the contracts, invited
comments from the Development Contractors, Community Based Contractors, and the City of
Ekurhuleni Officials, before finalizing the Report. The Joint Venture would strongly advise the
Investigative Journalist to do the same.

Question 4.1 It has also come to our attention that the CBC’s received the investment pay out but
there are complaints that the money is less that what was promised. How much did each CBC
receive and how much did you invest for each CBC and recycler?

All Community Based Contractors and Recyclers the Investment Funds in line with their Contracts.
The City as the custodian of the Contract were given Portfolio of Evidence to show that the funds
paid out were in line with the contracts and bid specification.

To date the Joint Venture has not received any complaints about the Investment Funds that were
paid out.

Question 5. Based on your own assessment how did MCC/Before Dawn perform on this project,
are the CBCs and recyclers you mentored empowered if yes please give details such as how?
It is the Joint Venture belief that the Joint Venture cannot be referee and player at the same time,
just as the Recyclers and Community Based Contractors cannot be referee and player at the same
time.

If the amabhungane want to gauge the performance of the Contract they should approach:

i) Approach the City of Ekurhuleni as custodian of the contract to find out if the project
fulfilled the City of Ekurhuleni Developmental objectives as envisaged at the initiation of
the project. These developmental objectives will have been used in the motivation of a
five-year project instead of the usual three-year project.
ii) Approach the residents of Tembisa and Daveyton to find out if the service rendered was
up to the expected standard.

Suffice to say the Joint Venture never received any penalties for service delivery failures as
stipulated n the contract document. The Joint Venture is proud to say it fulfilled all its obligation in
terms of the spirit of the contract, signed contracts and bid specification.

Once again, the Joint Venture urges the amabhungane to approach the City of Ekurhuleni as the
custodian of this developmental project with their questions.