Durban - Public Protector Thuli Madonsela is to probe contracts awarded by eThekwini Municipality in terms of the controversial Section 36 rule, bypassing normal tender procedures.
The protector intends to examine contracts stretching back 10 years, among other issues.
Section 36 permits contracts in emergencies, or where there are no alternative service providers. Extensive use of it in municipalities has raised concerns by public spending watchdogs.
Speaking to the Daily News on Monday, city manager S’bu Sithole said he had received a letter from Madonsela’s office last Tuesday confirming the investigation.
“They will examine all our Section 36 contracts since 2004 to date, including those mentioned in the Manase report.
“The protector has requested we provide her office with a number of documents including the Manase report, Ngubane report and details of Section 36 contracts awarded between 2004 to date,” Sithole said.
“As city manager I welcome this investigation and have already asked our legal team to prepare all documents for submission.”
Sithole said the metro would request a meeting with the public protector to understand the terms of the investigation.
“I can confidently say there is a very slim chance that our municipality will be found wanting with regard to use of Section 36 or any other area of procurement because we have implemented strict procedures to reduce abuse... since I came into office,” he said.
Sithole said they had also tightened loopholes, which previously left Section 36 open to abuse.
“We now have a register of contracts which did not exist previously... all this will be confirmed in the protector’s investigations.”
Madonsela’s intervention follows at least two written requests for her office to step in.
Most recently, the DA wrote to her office in April, requesting contracts awarded to Durban company, Zikhulise Transport and Cleaning, be investigated.
“I asked the public protector to look at these contracts and the processes under which they were awarded under Section 36 to build low-cost houses,” said the party’s eThekwini caucus leader, Zwakele Mncwango.
“Building houses is not an emergency and these contracts should not have been given to a single individual under Section 36. We requested an explanation from the city manager but he has not responded, leaving us with no choice but to ask the public protector to investigate.”
But Sithole hit back, saying the investigation did not single out Zikhulise, but all Section 36 contracts awarded since 2004.
“It’s also not true to say I have failed to respond because reports on all Section 36 contracts are given every month to exco.”
An earlier complaint to the public protector was also made by Durban businessman Vusi Mvelase after his company, Mvelase and Associates, was named in the Manase report, which investigated dealings in the municipality under former city manager Mike Sutcliffe.
“The Manase report made some serious allegations about my company without even approaching me for my perspective on their findings,” Mvelase said.
“My company was accused of failing to pay VAT and I was not given an opportunity to respond.
“I also felt the report had implied I had a special friendship with Mike Sutcliffe and that my company benefited from housing contracts as a result of this. I was not on friendly terms with Sutcliffe and there were no favours in granting my company any business.
“(Manase) tarnished my reputation and so I wrote to the public protector last year requesting that she look into the matter. She advised that her office would request certain documents and would investigate my allegations.”
Sutcliffe said he welcomed the public protector’s probe: “We always made sure that the use of Section 36 was done within the law.
“In 2010 I had come under immense pressure to allow members of the executive committee (exco) to be the ones to approve Section 36 contracts, but our legal adviser told me at the time that, according to law, councillors cannot make decisions on tenders and that it was the responsibility of the accounting officer to do that.
“I was not comfortable with this as I wanted it to be a decision which involved a committee and not an individual, which is why all Section 36 contracts during my time went to the Bid Adjudication Committee for approval and not exco,” Sutcliffe said.
“It is ironic that I was accused of abusing Section 36 processes in the Manase report but use of the same policy has increased fourfold over the past two years.”
However, eThekwini Speaker, Logie Naidoo, has rejected this. He said the abuse of Section 36 rules had come down dramatically since Sithole stepped into office.
“During Sutcliffe’s term, as exco we would only get to know about contracts awarded under Section 36 three months later when it was too late for us to stop the work even if we found that the contract was not justified,” he said.
“That has definitely stopped because Sithole has closed the potential for abuse by ensuring that an application for use of Section 36 must be made to exco before it comes to him as city manager.”
Sutcliffe is suing Sithole for R10m for claiming criminal charges would be pursued against him as a result of the Manase findings.
It is expected before court within weeks, more than a year after Sutcliffe launched a legal challenge to clear his name after the Manase report alleged he had failed to report fraud to the tune of R1.1 million while in office.
Kgalalelo Masibi, spokesman for the Public Protector, said the office was investigating
complaints on various issues regarding eThekwini, including “but not limited to” the awarding of Section 36 tenders.
He confirmed a “general enquiry” has been sent to the city.
Daily News