Cape Town - City of Cape Town officials “probably” acted irregularly in the awarding of a R5 million beach clean tender, a report by independent auditors KPMG has found.
City Speaker Dirk Smit confirmed on Sunday that the report has pinpointed officials who may have transgressed council rules in the way they considered tenders for beach cleaning services in 2012.
Smit said no councillors were identified in the report and he could not say how many there were.
The findings of the probe, set up by Smit following two court judgments and repeated alarm from various councillors about evidence of possible corruption, will now be referred to the city manager. He may call for a disciplinary hearing.
But the possibility of disciplinary action comes almost two years after Beach Clean SA, the company that had cleaned the city’s beaches for 14 years, first raised the alarm with officials, the city manager and the mayor that proper processes were not being followed.
Beach Clean SA was declared non-responsive during the 2012 tender process, for failing to include all the required prices and the city awarded the tender to a Port Elizabeth-based company, Khazimla Gardening and Cleaning Services.
However, Beach Clean SA’s Rogerio Viana appealed, and pointed out that Khazimla had a similar pricing schedule to his company.
It has taken months of discussions, and two court judgments for Beach Clean SA to be awarded its tender. However, Viana said “administrative blockages” from the city were now preventing him from starting work.
With a third court battle now looming between Beach Clean SA and the city, ratepayers may again have to pay the city’s legal fees. The city has already had to pay more than a million rand in legal costs for the first two court cases.
In October 2013, the Western Cape High Court ruled that the tender awarded to Khazimla be set aside so Beach Clean SA could submit its bid.
This year, Judge Karrisha Pillay ordered the city to give the tender to Beach Clean SA.
But instead of awarding the full three-year contract valued at R5m, the city had slashed the time to just one year because of budgetary constraints. The contract now states that “the frequency and location of the cleaning may be adjusted by the solid waste management representative in accordance with budget availability”.
Viana said: “Our position is now severely compromised and we are trying to avoid a situation where the city could be further liable for our losses going forward.”
Viana said the reduced contract period would severely compromise his level of service to the ratepayer. “We cannot be expected to do the service with firstly incurring the loss of income over the past two years and still continue to do the contract for the shortened period and with the diminished budget. The legal process has highlighted many instances where (the city) has acted in a manner which is not appropriate as a governmental organisation.”
The city has indicated it will respond to questions about the budget cuts and terms of the contract this week.
However, Viana said there was no indication during the second court challenge that the city would battle to find the full budget for the full three-year period of the contract. Viana said he needs confirmation of income to get the bridging finance he needs for the necessary equipment before work can start in October.
City officials refuted claims of corruption when concerns were first raised in 2013, and claimed a forensic audit found no evidence of irregularity. However, recent correspondence between the city and Viana suggests that this initial forensic audit may never have taken place at all.
This would imply the legal department had lied under oath during court proceedings.
“Why was it necessary for the ratepayers of Cape Town to have to incur the cost of an outsourced forensic audit, when it could have been done internally?” Viana asked.