Durban - Gralio Precast, a company linked to controversial businessman Jay Singh, faces the prospect of having its R101-million Cornubia housing contract halted.
The company, which is owned by Singh’s ex-wife, Shireen Annamalay, and son, Ravi Jagadasan, was re-awarded the tender last month after a legal battle with the municipality over the same tender.
The National Home Builders Registration Council (NHBRC) has also launched an investigation into allegations of shoddy workmanship by companies owned by Singh’s family.
During a heated debate at the city’s finance and procurement committee meeting yesterday, DA councillor Zwakele Mncwango called for the contract awarded to Gralio to be withdrawn.
Mncwango said Jagadasan also owned the company that was building the mall in Tongaat which collapsed last week because of shoddy workmanship, killing two people.
“I don’t think it will be a waste of money if we go to court again. This committee must recommend to council to withdraw the contract to Gralio and blacklist the company,” he said.
Mnwango believed that the municipality could compile a convincing motivation to cancel Gralio’s contracts based on the company’s track record of building shoddy houses, as indicated by authors of the Manase report.
But ANC councillor Nompumelelo Mabaso said: “We can’t take decisions based on the history of the company and based on what happened in Tongaat. We can’t take emotional decisions. My colleague is misguided because there is no Manase report here.”
However, committee chairwoman Fawzia Peer said that city manager S’bu Sithole had made it clear he would blacklist the company. “We are working on it and looking at all the contracts,” she said.
Andre Petersen, eThekwini’s deputy head of policy and support services, told councillors that the contract to Gralio had been awarded before the Tongaat mall collapse.
“The city manager has issued an instruction to put the award on hold until they do an internal analysis with the NHBRC and the provincial housing department before he makes up his mind,” he said.
But Sithole said he was surprised that the contract had been discussed at the committee meeting because he wanted to do his own internal investigations as a precautionary measure, and did not want to make the issue public just yet. “At first, the houses in Phoenix built by Gralio appeared to be okay but problems were later experienced and I was afraid this might also be the case in Cornubia,” he said.
Mervyn Reddy, a spokesman for Singh, said he was not aware that Sithole had put the Cornubia tender on hold. “The municipality has the right to do that. But Gralio was awarded the public tender fairly and out of all the companies that put bids out for the tender, Gralio came up tops,” he said.
Human Settlements MEC Ravi Pillay said he was not aware of any definitive decision taken by Sithole.
“The city manager is, quite correctly, taking precautionary measures and we support him fully in that,” he said. At this stage, there was no reason to question the quality of the houses at Cornubia because of quality control measures. He said the department was working closely with the NHBRC.
“We are also interested in gathering evidence of the same persona using different entities to escape liability for their prior conduct. The law provides for a principle known as ‘piercing the veil’ and we will not hesitate to use it to track down the real power behind any entity,” he said.
Municipal spokesman Thabo Mofokeng said that in December 2011, long before the Manase Report was released, a tender for Phase 1B of Cornubia Housing was advertised and the contract was awarded to Gralio as the most responsive tenderer. But the tender was above R10m and had to be approved by Sithole. The city manager had rejected the award, but Gralio went to the municipality’s appeals authority to appeal against the decision.
The authority overturned Sithole’s decision, based on new evidence that included a letter from NHBRC praising the quality of Gralio’s work.
“This was contrary to an earlier NHBRC report which had criticised Gralio’s work and formed part of the Manase Report findings. Despite the findings of the appeals authority, the city further attempted to render a non-award, which Gralio defended legally,” he said.
Mofokeng said after exhausting all the options, it was considered “prudent” to proceed with Gralio.
The Mercury