The embattled Oudtshoorn Municipality has awarded a multi-million-rand VAT recovery contract to the ANC’s regional treasurer in the Southern Cape.
And the municipal manager has defended the decision to deviate from supply chain policies to award the tender to the ANC member, citing the municipality’s precarious financial position as an excuse.
The chief financial officer had identified VAT recovery as one of the means of addressing the municipal budget deficit which runs to millions of rand, said municipal manager Thandekile Mnyimba.
The George company which won the contract, Major General Trading CC (MGT), has two listed directors – ANC regional secretary Major Sokopo and Phumeza Sokopo.
Confirming the awarding of the contract to MGT Business Enterprises, Mnyimba said “the municipality appointed (the company), not an individual”.
He explained that the contract related to the review of the municipality’s VAT payable to Sars, and whether the municipality claimed all input VAT from Sars.
According to Mnyimba, Oudtshoorn had a deficit of R15.2 million during the budget adjustment of 2011/12.
“In an attempt to improve the financial situation of the municipality, the council resolved that the municipal manager continues to identify and implement measures to reduce expenditure and increase revenue in order to improve the municipality’s financial position.”
The chief financial officer subsequently identified VAT recovery as one of the means of doing so.
“…this is an urgent matter, hence an application to deviate from the normal supply chain policy in terms of section 36 of the Municipal Supply Chain Management Regulations, was approved,” Mnyimba said.
But MaxProf, the company which until last year did the VAT recovery job, said they knew nothing about the award of the tender.
The company’s
Bernard Saayman denied there was an “emergency”, adding that there was “no cause for a section 36 because our company has done the review up until February last year”.
When the initial tender was advertised last year, MaxProf was still doing work at the municipality.
Saayman’s contract has since expired, and even though they put in a tender, he said the entire process was halted last year.
“If you put out a tender, there’s a process that needs to be followed. We were supposed to have been notified so that we could lodge our objections within 14 days. But this did not happen,” he added.
Commenting on the contract, ANC Southern Cape/Klein Karoo secretary Putco Mapitiza said: “We believe that Mr Sokopo has a right to do business with whomever, therefore there is nothing wrong in him doing business with the Oudtshoorn municipal council.”
He added that the ANC was happy the municipality followed due process in awarding the tender to Sokopo.
“We are aware of tendencies wanting to play cheap politicking on the matter. But we also want to warn people using the name of the ANC of dire consequences.”
However, an anonymous source revealed that disgruntled ANC members had confronted Mnyimba about the tender more than a week ago.
“They wanted answers. There was no need to deviate from supply chain policies as the matter was not urgent.”
According to the insider, Mnyimba and Sokopo are “old pals”.
Asked to comment, Western Cape Local Government MEC Anton Bredell said he was not aware of the VAT recovery contract.
Although the awarding of the contract was not illegal, it could be seen as immoral when political figures benefited, Bredell added.
The Oudtshoorn tender drama comes in the wake of a similar incident last month, when Bredell revealed that a company owned by the ANC’s Western Cape treasurer, Fezile Calana, was paid R200 000 by the Cederberg Municipality. - Weekend Argus