A controversial decision by the Buffalo City Metro to write off debt of more than R100m owned by city businesses, which triggered an outcry at the time, has come back to haunt the municipality.
According to city bosses, the decision, endorsed by the city council in December 2022, is now being investigated by both the police and the office of the public protector, advocate Kholeka Gcaleka, after the surfacing of allegations of bribery relating to the write-off.
MPLs were briefed on Friday by BCM mayor Princess Faku and city manager Mxolisi Yawa about investigations involving the city and other developments.
In a presentation to the Bhisho legislature’s co-operative governance and traditional affairs portfolio committee, Faku and Yawa said a number of ANC councillors in the metro were being probed for allegedly receiving bribes before the December 2022 council meeting to influence a decision to rubber stamp the write-offs “for specific businesses”.
The “specific businesses” were not named but Friday's report mentioned the decision to write-off the debt was made in December 2022 and at the time, council reports reflect discussions around writing-off business debts totalling R115m.
Council approval for the write-off was secured, with the ANC winning a vote despite against the DA opposition.
During the Bhisho meeting, it was not specified who had allegedly bribed these ANC councillors or how many had been implicated.
A later motion filed by DA leader Sue Bentley said the city’s decision flew in the face of customers who paid their debt despite the challenges they faced during the Covid-19 pandemic.
The party said the move fell outside the metro’s debt incentive scheme and the report should be taken to the finance portfolio committee first, a request shot down by the ruling party.
On Friday, city bosses said the investigation was initiated after Gcaleka’s office was approached by a whistle-blower who alleged that some ANC councillors had been bribed.
Yawa, in a report prepared for the portfolio committee, said: “The office of the public protector has received information from a whistle-blower that councillors of the majority party were [allegedly] paid money to facilitate a council resolution, which has resulted in the writing off of debt in 2022 for specific businesses.
“This case has also been reported to the SAPS for investigation, and the investigation is in progress,” the report said.
The probe was one of 10 external investigations involving the city.
The metro bosses told the committee, chaired by ANC MPL Nomasikizi Konza, that the investigations included Hawks and public protector probes into the provision of VIP protection to some councillors and city officials.
The city reportedly paid more than R13m, over a short period, to provide executive security to a number of its councillors and officials.
An investigation is also under way into what Faku termed the “water tanker mafia”.
The awarding of qualifications to some metro councillors and officials is, meanwhile, in the crosshairs of investigators from the Special Investigating Unit.
“The SIU is currently conducting investigations into councillors and officials who obtained funding from the municipality to pursue their studies with the University of Fort Hare ... [during] the period January 1 2005 to December 1 2023,” the report said.
Internally, the metro is probing a range of alleged transgressions by officials, including bribery allegations and irregularities in the selection of participants for the Chinese exchange programme.
Allegations of bribery for tenders and procurement irregularities are also under investigation.
Faku told the Dispatch that she had, in the past week, written to co-operative governance MEC Zolile Williams, asking him to institute a Section 106 forensic probe into the city’s failure to capture some of its completed projects on its asset register, a shortcoming which was red-flagged by the auditor-general.
“Our municipality is facing a major crisis, with most of our assets stuck in the ‘work in progress’ phase. This means that completed projects have not been captured in our asset register, which is a critical process in accounting to ensure that assets are properly recorded and valued.
“As a result, we have received a qualified audit opinion,” Faku said.
She said there had been “resistance” from some city officials when they were asked for evidence of completed projects, saying “the failure to capture completed projects in our asset register constitutes a serious malpractice that warrants investigation”.
Faku said she wanted Williams to investigate this, as well as “any potential cases of maladministration, fraud, corruption or other serious malpractice”.
Konza urged the city to sort out its asset management.
“If assets are not recorded well, you cannot determine your revenue,” she said.
The city had also roped in the investigative expertise of the Municipal Infrastructure Support Agency in looking into unfinished water and sanitation projects, some dating back to 2014, in which millions of rand had been spent with little to show for it.
BCM was one of seven Eastern Cape local authorities whose representatives appeared before the committee on Friday to brief the legislature on the state of their municipalities and outstanding and current matters under investigation.
The other municipalities were Raymond Mhlaba, Makana, Walter Sisulu, Ingquza Hill, Sundays River Valley and Sakhisizwe.
Daily Dispatch
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