The National Skills Fund is accused of retaliation by ending a R354-million artisan training programme when its implementing partner fired a lodging company that fund officials reportedly favoured.
Phila Jordan Capital (PJC) says its relations with the NSF soured after the dismissal of the accommodation provider. It said that within months thereafter, the three-year programme for 800 aspiring artisans was terminated for what the fund described as a material breach.
PJC founding executive Phila Jordan and executive Jeff Mabuza said the trouble began after learners complained about allegedly substandard accommodation and safety concerns.
PJC terminated the provider and arranged alternative accommodation and transport but, Jordan said, the NSF instructed the company to suspend the relocation.
“I didn’t understand why the NSF was getting involved in a third-party contract,” Jordan said, arguing that PJC was accountable for programme delivery and responsible for dealing with failing suppliers.
PJC says the provider was suggested during negotiations involving the NSF. Jordan said his former chief financial officer told him the name emerged during the engagements, after which PJC and NSF officials inspected the facilities together.
Documents seen by Sunday World show PJC raised concerns with ZNCT Group on February 11 after complaints about accommodation and safety were raised, warning it to address the problems or face replacement.
Mabuza said ZNCT approached the NSF after PJC terminated it. Although replacement accommodation and buses had been arranged, security personnel allegedly prevented learners from leaving. Some departed independently, while PJC issued consent forms for those seeking transport and alternative accommodation. About 200 responses arrived within an hour. The next night, Mabuza said, about 400 learners were ordered out at about 9pm, forcing PJC to find transport and accommodation overnight.
PJC says its workable relationship with the fund deteriorated after the confrontation.
On February 5, PJC issued a public statement accepting responsibility for the disruption, wording the NSF later cited when announcing termination. Mabuza said the passage, “As the appointed provider, we take full responsibility”, was inserted at the NSF’s instruction.
The project began with great ambition. Jordan said PJC submitted an unsolicited proposal to train 5 000 artisans using engineering and aviation facilities. The NSF approved 800 learners around July 2024, with implementation beginning in March 2025.
Jordan said that during an orientation session, a man identified as Mr Msomi, who claimed to be an NSF legal adviser, questioned why the meeting concerned 800 learners when evaluation committee minutes allegedly reflected approval for 5 000 and a R2.2-billion budget. PJC proceeded with the approved R354m programme.
Internal auditor and quality assurer Peta Jacqueline Horn said she joined the dispute in April and encountered an increasingly hostile compliance environment. At an NSF-requested meeting, representatives from more than 10 companies discussed payment disputes in one another’s presence. “This is unethical,” Horn recalled saying, questioning why confidential supplier contracts and payment arrangements were being compared.
She said attention then shifted to learner relocation and transport costs. PJC presented a breakdown showing the additional expenditure was being carried by the company.
Horn said she also encountered different versions of quarterly financial reports.
She said her role was to audit PJC independently, not defend it. While she identified NSF concerns that PJC could easily resolve, her main concern was inconsistency in the fund’s reporting and oversight.
On May 18, Auditor-General representatives met PJC while NSF officials were present. Horn said PJC initially believed it was being audited but the representatives explained their work concerned the NSF.
Three days later, she said, the quarterly financial report was reconciled after engagements between the parties. Documents seen by Sunday World record reconciliation meetings in May.
On May 28, the NSF notified PJC that it intended terminating the agreement, described in the notice as worth R360m, for material breach.
PJC challenged the grounds through its attorneys but the fund issued a termination notice the next day.
Jordan said the speed of the reversal was difficult to reconcile with the preceding engagements. He said the decisive rupture came when PJC fired an accommodation provider it believed was failing learners.
ZNCT acknowledged receipt of Sunday World’s enquiry, as did NSF spokesperson Lebohang Somo who also noted that the fund would provide a comprehensive response in due course.
“The NSF remains focused on ensuring a successful transition and continuity of the project, while safeguarding the interests of the beneficiaries and all relevant stakeholders,” Somo said.
- The National Skills Fund (NSF) terminated a R354-million artisan training programme after Phila Jordan Capital (PJC) fired a lodging company favored by NSF officials.
- PJC ended the contract with the accommodation provider due to learner complaints about substandard accommodation and safety concerns, but the NSF instructed PJC to suspend relocating learners to alternative accommodation.
- PJC said that the accommodation provider was suggested during negotiations involving the NSF, and NSF officials had inspected the facilities with PJC before approval.
- The NSF cited a material breach when terminating the agreement and acted swiftly following PJC's challenge to the termination grounds through attorneys.
- NSF spokesperson Lebohang Somo confirmed the fund is focused on ensuring a successful transition and continuity of the project while protecting beneficiaries' interests.
