Energy and Water Seta spent R58m in public funds on unused building

The Energy and Water Sector Education and Training Authority (Ewseta), an entity responsible for empowering young people, has come under fire for institutional dysfunction. A critical finding in the Auditor-General of South Africa’s General Report for 2024/25 has highlighted governance failures in the skills development arena. Enquiries by Daily Maverick have uncovered significant wasteful expenditure on property acquisitions that have yielded no returns.

The acquisition of the Cape House building in Johannesburg is the focal point of the current controversy. Originally bought in 2014 for R21.7-million, the property was intended to curb long-term leasing costs. However, despite an additional R36.7-million being funnelled into refurbishments through various service providers, the project remains unfinished more than 10 years later.

Consequently, the Seta has never occupied the premises, resulting in more than R58-million in wasted public funds.

In 2014, Errol Gradwell was the CEO of the entity. When Daily Maverick approached him for comment, he distanced himself from the decision-making process.

“Unfortunately, I won’t be able to assist. You are talking about 14 years, and my age and memory doesn’t help much… Just to assist you in some way, the Accounting Authority (AA) is responsible for authorising expenditure above R500,000.00, not the CEO or senior management. So again, maybe you should request from the entity if you could see the resolutions,” Gradwell said.

According to Ewseta records, former minister of agriculture, forestry and fisheries Senzeni Zokwana was the board chairperson. Daily Maverick sent him questions, but no response has been received yet.

‘We saw a concern’

Following Gradwell’s tenure, Mpho Mookapele became part of the financial team in 2016 and was later appointed CEO in 2020, along with the former chairperson, Dr Limakatso Moorosi. When they arrived, both noted this material irregularity.

Daily Maverick spoke to Mookapele about whether she had flagged any financial concerns about Seta funds spent on idle assets or services. “Cape House was procured before I joined the Seta as a CFO in 2016, with refurbishment already underway. At the time, the project was experiencing a range of challenges.

“The building was purchased from Before Sunset Properties 11 Ltd, and refurbishment was subcontracted to Tristar. The refurbishment halted when Before Sunset indicated Tristar (subcontractor) declared insolvency and could not continue with the work, but a significant amount of money was already paid to Before Sunset for the work to be done,” Mookapele said.

Mookapele added that reports were made through the South African Police Service (SAPS) and the National Prosecuting Authority (NPA), but they never went anywhere. “BDO conducted forensic investigations and confirmed the irregularities and potential fraud… I (in my capacity as CFO and later CEO) opened a fraud/criminal case with the SAPS in 2021, and I took disciplinary action against employees who were identified by the forensic audit report. Other employees left before action could be taken, and others during the disciplinary process.

“The case was later closed by the SAPS in 2023, and again, due to the material nature and the losses suffered by the entity, I personally reopened the case with the SAPS and escalated the matter to the Hawks. I later received a letter from the NPA closing the matter without any questions or any follow-up to the Ewseta or the board of the Ewseta,” she said.

Moorosi shared similar sentiments to Mookapele: “The forensic report recommendations were implemented, including reporting the matter to the relevant authority, which is the SAPS. This would include action against those involved and recovery of losses suffered by the Seta… Unfortunately, the case was closed by the NPA without any follow-ups with the Seta.

Daily Maverick approached NPA spokesperson Kaizer Kganyago, SAPS spokesperson Brigadier Athlenda Mathe and Tristar Construction, but no response has been received yet.

The Hawks’ spokesperson, Brigadier Thandi Mbambo, told Daily Maverick that “the matter was investigated by the Johannesburg Serious Commercial Crime Investigation Unit and it was closed as per reasons initially provided. NPA has since requested that the matter be reopened, the case will be submitted to NPA next week.”

Dispose of the old one and get a new one

Ewseta entered into a lease contract and occupied new offices, incurring monthly rent at its head office, 22 Wellington Road.

“The decision to lease alternative office space was taken following extensive consideration of the costs of alternatives of completing the building and occupying or leasing another property to ensure business continuity. This was also based on the understanding that there is a law enforcement process in progress that would assist the organisation to recoup the losses suffered,” Moorosi said. However, funds had still not been recouped.

She added: “Due to the challenges and finances required to complete the building, the Accounting Authority considered disposal methods to ensure minimal losses, if any would be incurred.”

Cleaning an unused building

Despite the AA’s methods to dispose of the building to save money, the Ewseta recently issued a six-month tender for deep cleaning Cape House in March 2026. Ironically, on the tender documents Ewseta stated that “the current state of the Cape House building is as follows: There is no Water and Electricity running the Service provider must provide own resources.”

Daily Maverick asked why the entity issued a cleaning tender for an unused building that is reportedly still undergoing or awaiting refurbishment, and if a service provider had been appointed. No direct answer has been received.

Calls for accountability

The Auditor-General recommended that the Department of Higher Education and Training (DHET) hold the Ewseta and AA accountable for the R58-million loss associated with the unoccupied building. Daily Maverick sent questions to DHET spokesperson Matshepo Seedat about what specific steps the ministry has taken since the notification of these material irregularities in late 2024 to ensure that no further “uneconomical expenditure occurs at Ewseta. No response has been received.

More than a decade after the initial purchase, Cape House stands as a symbol of failed oversight, with no recovery of public funds and no accountability for the losses incurred. DM