Corruption investigations by the Special Investigating Unit (SIU) in two provincial municipalities, Buffalo City Metro and the Alfred Nzo district in recent years, have cost ratepayers millions of rand.
A report tabled in parliament on Wednesday by the SIU head, advocate Andy Mothibi, reveals that the two troubled municipalities had been charged a combined R33m for four investigations conducted by the unit.
The amounts are for a probe of the controversial yellow plant contract in the Alfred Nzo district and three investigations in BCM.
The BCM investigations related to the controversial R17m black refuse bag contract, the infamous R10m Nelson Mandela memorial scandal, and the multimillion-rand Covid-19 PPE procurement contracts.
For the yellow plant probe, the Alfred Nzo district was charged R21m by the SIU.
It paid just more than R15m, with more than R6.4m still outstanding, Mothibi said.
An ongoing investigation by the SIU relating to the bulk water supply and water treatment contracts at Alfred Nzo, which is expected to be concluded later in 2025, is set to cost the ailing municipality a further R14.1m.
In BCM, the SIU had charged the city R11m for its investigation into the black refuse bag contract, R481,000 for its investigation of the Mandela memorial scandal, and a further R400,000 to investigate the city’s Covid-19 PPE procurement.
Mothibi made the presentation during a sitting of parliament’s finance watchdog committee, the standing committee on public accounts (Scopa).
The two municipalities were on Wednesday in the spotlight over some of their latest audit assessment findings, and a number of corruption investigations in recent years.
Presentations were made before the Songezo Zibi-chaired Scopa by the auditor-general and the SIU, with the SIU telling the parliamentarians that it had “observed a general abuse of procurement processes” in BCM during its investigations.
Mothibi updated the multiparty MPs on BCM’s 2014 black refuse bag contract, the Nelson Mandela memorial scandal, and the Covid-19 PPE procurement contracts.
In the refuse bag contract, the city had hired a company that did not meet the procurement requirements and should have been disqualified.
Mothibi told Scopa the awarded company at the time did not have SABS-approved plastic bags and had failed to submit audited financial statements.
He said the SIU had also found that, without receiving any written authority, the awarded company had increased the pricing of those black refuse bags and overcharged BCM by R8.3m, which had since been recouped.
The unit had recommended disciplinary action against the metro’s five bid evaluation committee members and three other municipal officials, but they had yet to be taken to task.
Mothibi said his unit was still owed more than R11m by BCM for this contract.
As part of the SIU’s “high level observations” relating to the Mandela memorial scandal, the SIU had “observed political interference in decision-making processes of the municipality, whereby meetings were held at ANC offices and then taken to council”.
The investigation followed a Daily Dispatch exposé in 2014 which revealed gross irregularities in the deal.
In the Mandela memorial scandal, more than R10m was channelled by the city towards transportation of mourners in December 2013, without proper processes being followed.
He said BCM still owed the SIU almost R500,000 for this investigation.
For the Covid-19 PPE procurement contract, Mothibi said, action against some of the implicated officials, had yet to be taken. The municipality also still had to pay the SIU more than R400,000 of the R3.4m bill for the investigation.
The DA’s Sue Bentley said the leadership of BCM continually raises the issue of financial pressure as the reason for the poor levels of service delivery.
“The fact that R12 million is owed to the SIU for investigations undertaken is yet another blow to any hope of improved service delivery.
“Council has only just been made privy to one SIU investigation, and that BCM leadership have been withholding from council for two years, makes one wonder what else is being withheld.”
The SIU revealed this week that it was owed billions of rand by state institutions across the country.
SIU spokesperson Kaizer Kganyago said the unit was now struggling financially as the major portion of its operating budget depended on the payments for its investigations..
Mothibi said in the Alfred Nzo district, the unit had in recent years investigated a number of contracts, including for the procurement of water tanks and revenue management solution, procurement of yellow plant equipment, bulk water supply and water treatment contracts.
For the yellow plant probe, Mothibi said the state was in a process of recouping more than R60.7m from the service provider, while more than R6.4m was owed to the SIU for the probe.
The plant had been provided to the Alfred Nzo municipality by controversial company Kwane Capital, owned by Mcebisi Mlonzi, who is in court for an alleged dodgy tender in another of the provincial municipalities.
The SIU also provided parliament with an update on its yellow plant investigations in other provincial municipalities, including Amahlathi, Ngqushwa, Raymond Mhlaba, Port St Johns and Mbhashe.
Mothibi said the company owner, who has been charged for his alleged dodgy business with the Amahlathi municipality, would soon face serious criminal charges relating to his contracts with other provincial municipalities.
For the bulk water supply and water treatment contracts, the investigations were expected to be completed by November, at an estimated cost of R14m.
Tabling an overview report on BCM’s 2023/2024 audit assessment, acting provincial auditor-general Thobile Nteta told the MPs that there were some “extensive problems” BCM was dealing with, also raising concerns about issues that affected the city’s financial viability.
“I am deeply worried about the state of their fixed assets. Also there are serious problems at their supply chain management unit,” Nteta said.
Nteta lamented the high vacancy rate in BCM directorates, saying this was having a negative impact on how the municipality performed.
EFF MP Ntombovuyo Mente said the issue of consequence management at BCM, or lack of it, was a concern that needed to be addressed.
The ANC’s Gijimani Skosana raised concerns about the metro’s “ballooning” irregular expenditure in 2023/2024, now sitting at more than R10bn.
Mothibi also told Scopa that his unit believed there had been neglect and maladministration regarding the metro’s non-functional wastewater treatment works projects, saying they would soon be in touch with the AG’s office “for a possible investigation into such projects”.
Zibi said his committee would summon both municipalities’ political and administration leaders soon to appear before the committee.
Daily Dispatch
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