Durban - Controversial businesswoman Shauwn Mpisane is in line to rake in more millions from lucrative housing tenders from the eThekwini municipality, despite facing multiple charges of tax fraud.
According to a report that is expected to be discussed by the city’s executive committee on Tuesday, the municipality wants to use section 36 of the supply chain management policy to award Mpisane’s company, Zikhulise Cleaning, Maintenance and Transport, the same contract – and more – that was suspended last November.
This was to build 2 825 houses and retaining walls in Umlazi. It has been reported that the value of the deal is at least R141 million.
Originally, the contract was suspended by the municipality after it found that the awarding of the tender was flawed, as procurement processes had not been followed and contract documents might have been manipulated.
On Monday night, Mpisane said she took the municipality to court because it had breached the contract, and the court had ordered it to continue with the agreement it had signed with her company for the construction of the houses.
“It is evident that, as the party that took the matter to court, I welcomed the court’s decision to apply the rule of law in deciding on the matter,” she said in an e-mail.
The municipality wants to use the section 36 policy to get around regular tender protocols and enable Mpisane to continue doing work for the city.
Section 36 is used when the accounting officer deems it necessary to bypass normal tender processes.
The request to exco to use section 36 follows the city’s and Mpisane’s out-of-court settlement agreement which relates to the original multimillion-rand section 36 contract awarded to Zikhulise for the Umlazi B10 housing project.
Opposition parties said it was “unfortunate” that Zikhulise was continuing to do business with the city in spite of its track record of building “shoddy” houses.
But Mpisane made short shrift of this accusation, saying the opposition – and the DA in particular – had “no reservations” when it praised her company’s work when it built schools.
“Yet in the interests of media publicity, when it selectively suits them, I am being accused [wrongly] of building shoddy houses.”
Minority Front councillor Patrick Pillay said the municipality was caught between a rock and a hard place, because there would have been further delays in housing delivery had the matter been allowed to drag on in court.
“The city needs to come out of the system of awarding the same companies tenders… The administration needs to ensure that close monitoring mechanisms are in place to avoid shoddy workmanship, as experienced in the past,” he said.
DA caucus leader Tex Collins said the party was concerned about the contract to Zikhulise and the situation should not have been allowed to happen.
“We are out of line. We are dealing with a person who is convicted of fraud and tax evasion, so how can council continue to do business with her? We should have been given a report before the out-of-court settlement was reached,” he said.
But, instead, city manager S’bu Sithole gave exco a verbal run-down and a “wishy-washy” verbal report-back about the court case, Collins added.
Sithole has, in the past, been very critical of dodgy tender processes, saying municipal contracts should not be the preserve of a few politically well-connected individuals.
Briefing exco on the out-of-court settlement agreement in August, Sithole said Zikhulise would not be paid unless the houses conformed to standards set by the National Home Builders’ Registration Council.
He also said the company would not be entitled to work for the city and would have to bid for future contracts.
However, the court settlement with Mpisane stipulates that the city would identify other development opportunities for Zikhulise.
* Mpisane, who has a previous fraud conviction, has pleaded not guilty to defrauding the taxman by allegedly forging invoices involving more than R5 million.
“On the issue of tax fraud, please note that this matter is before the courts and therefore I cannot comment. I have nothing to hide, and look forward to the matter being heard in court, so that the accusation can be dealt with through the proper processes,” she said. - The Mercury