ENTREPRENEUR: Senzo Tsabedze back on track for jobs breakthrough
Senzo Tsabedze feels vindicated. After facing corruption allegations and being exonerated, the CEO says he is ready to make further inroads into the lucrative fleet management sector.
Tsabedze was awarded a R1.2bn contract by the City of Joburg in November 2018. However, early in 2019 the metro instituted a forensic investigation following media reports about possible political influence in the awarding of his tender. The city later cleared Tsabedze of any wrongdoing.
The saga has left a bitter taste in Tsabedze’s mouth. "I’m an honest businessman," he says. "It’s sad that in SA every black businessman who gets awarded a significant contract is seen as [possibly] corrupt. Is it because we are considered to be not capable?"
The municipality awarded the contract to Afrirent through a regulation 32 process, which allows arms of the government to appoint a supplier that is providing services to another state institution without following a competitive tender process.
The contract, for 30 months, means Afrirent will supply the city with 2,732 vehicles for use by municipal departments, including the metro’s police department, City Power and Johannesburg Water.
Tsabedze says the contract was previously awarded to Avis Fleet Services. When the city extended that agreement by two years, "no-one complained".
"But when it was awarded to us, people said we have no capacity. They asked: ‘Who is Afrirent?’"
Tsabedze says the company has contracts with more than 30 municipalities across the country and had a R1bn credit facility. When that became known, he says, people’s tone changed, and the accusations of corruption began. He says the forensic investigation took him out of business for six months, as no-one wanted to have dealings with the company.
Now that he has been cleared of any wrongdoing, Tsabedze says he is more determined than ever to disrupt the fleet management services sector, which he argues has been the exclusive preserve of white-owned firms.
Afrirent’s turnover is R400m a year. Tsabedze, from Mpumalanga, says the company has a shareholding in six car dealerships, which is where it sources its fleet from. It installs its own tracking and monitoring software.
The businessman also has plans to diversify his firm so that it does not rely only on government tenders. To this end, it is investing in property development, and its first hotel is set to open in Sandton in 18 months.
"Construction has already started. We have also identified a few sites for development in Cape Town and Durban and are negotiating with landowners and developers there," he says.
Tsabedze points to President Cyril Ramaphosa’s reference to employment in his state of the nation address when he said the tourism industry was the second-biggest employer after mining. The Sandton hotel will provide up to 70 people with permanent work, says Tsabedze, whose inspiration to succeed in business comes from his modest background.
"I come from a poor background. I’ve always wanted to better my life and the lives of my family and employees.
"It would be a disaster if I were to fail, because I represent not only my family but also hundreds of other people who rely on my employees’ income."
Tsabedze says his wish is to be treated equally and fairly by the media and the banks. "SA banks seem to take a stance when allegations are levelled against you.
"But if they are going to withdraw their facilities because of allegations made against me in the media, they must be consistent and do the same against companies like Steinhoff."