City of Johannesburg Mayor, Herman Mashaba

CAPE TOWN - A senior official in the Department of Economic Development has been suspended pending a disciplinary hearing into allegations of misconduct relating to contracts and payments linked to the Johannesburg Broadband Network Project.

 

According to a statement, the official has already been implicated in an independent forensic investigation which recommends corrective action be taken.

It is further said that the official in question is seen to be deliberately frustrating an investigation into the City’s seemingly inexplicable R1.3 billion acquisition of the 900km broadband network in 2015. This acquisition was done through the Metropolitan Trading Company (MTC), a Municipal Owned Entity, which possessed no viable business plan nor had required capacity to run a broadband operation of this size.

 

City of Johannesburg Executive Mayor, Herman Mashaba said that the suspended official refused to allow investigators access to a number of devices which are believed to contain crucial information relating to the investigation.

“Further to the suspension, the City has obtained a court order to create mirror images of the official’s devices so as to preserve all information on the devices to ensure that potential key evidence relating to this investigation is not destroyed,” said Mashaba.

 

“The tender for the construction of a broadband network and ICT infrastructure was originally awarded on December 19, 2008 to a consortium. On July 31, 2014, the City terminated the agreement so as to operate the network itself through the MTC.

“On commencing operations on September, 30, 2015, the MTC ended the 2015/16 financial year with a net loss of R54 million,” Mashaba said.

He added that by February of this year, MTC still continued to function with no viable business plan which was followed by the Auditor General’s latest report finding that the performance of MTC could not be assessed due to the lack of a viable business plan from the entity.

 

“As a City, we cannot allow officials to undermine our residents’ right to know how and why their hard earned money was used to create an inefficiently operated entity which has drained the City of resources needed for service delivery.

“The astronomical losses made in the administration of this project are yet again an indictment on financial management in the City and this cannot be allowed to continue,” concluded Mashaba.

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