R36.8-Million Lottery-Funded Old-Age Home in South Africa Remains Incomplete After Nine Years
A lottery-funded old-age home in eDumbe, northern KwaZulu-Natal, remains unfinished nearly a decade after funding was approved, with over R36.8-million spent and no clear path to completion. The project is now part of a wider investigation by the Special Investigating Unit (SIU) into alleged mismanagement at the National Lotteries Commission (NLC).
The NLC paid R23.8-million between 2017 and 2020 to Ubusu, a Pretoria-based non-profit company described as a “dodgy shelf company” with no prior experience in major infrastructure projects. Ubusu was registered in 2015, yet it received the substantial grant despite the NLC’s requirement for two years of bank statements from applicants—a criterion its ability to meet remains unclear.
After the project stalled in 2021, the NLC appointed a new contractor, Lerumo Properties, paying it R13-million to complete the work. However, Lerumo directors state that Ubusu blocked their access to the site, insisting the remaining funds should be paid to them instead. This dispute has left the building derelict. A recent site visit found no installed plumbing or electrical systems, cracked windows, missing ceilings, and significant damp and mould.
The NLC is now suing Lerumo for the repayment of the R13-million, plus interest, with the case set for the Pretoria High Court in March. Lerumo claims it spent two years attempting to start work and expects compensation for its efforts, while also noting it has tried to return the money without success.
The eDumbe project is one of several infrastructure initiatives, including old-age homes and rehabilitation centres, left incomplete after hundreds of millions in lottery grants were allegedly looted under a previous NLC administration. Trade, Industry and Competition Minister Parks Tau confirmed in November 2024 that both the Ubusu and Lerumo payments are under SIU investigation.
Auditor-General officials have also flagged the Lerumo payment as an irregularity in the NLC’s 2023/24 accounts, noting no formal contract was signed and no invoice was requested before the R13-million was paid.
Ubusu’s sole director, Keith Nyiko Sithole, claims the project is complete and that his organisation has been maintaining it, awaiting further NLC funding for “operationalisation.” He did not address questions about blocking Lerumo.
The investigation has revealed a network of interconnected organisations. Ubusu shares directors and a registered address with Malusi WeSizwe and Spirinex—entities that have received millions in NLC funding for other projects, some of which are also under SIU scrutiny. Ubusu’s address is also linked to Upbrand Properties, a company associated with a former NLC chief operations officer who resigned in 2022.
The NLC states it has not abandoned the eDumbe site and is exploring whether the building can be repurposed, pending SIU findings. The case highlights systemic concerns over oversight in the distribution of national lottery funds intended for public benefit projects.
