“The agreement, entered into in 2015, was allegedly entered on condition that the contractor furnished the city with a performance guarantee of R16m and that it demonstrated that it had sufficient cash flow to enable delivery,” he said. A purchased order of R19m was also issued in favour of a contractor for delivery of the first set of fire engines to the city.
Alarm bells rang after the contractor not only failed to provide the performance guarantee, but also failed to deliver the 29 new fire engines per the contract. This contractor had since been placed under business rescue proceedings.
“Upon investigation by the city’s new head of Group Legal Services, Isaac Mogashoa, it appeared that the minutes from the BEC which sat to adjudicate proposals for the tender were forged. The city has obtained sworn statements from the members of the BEC and is working with law enforcement authorities to investigate the matter,” Mashaba said.
As a result of the seemingly criminal conduct behind the tender and the contractor’s failed performance, the city had no choice but to seek the termination of the contract.
The appointed business rescue practitioner agreed to the termination of the contract to avoid court action.
-BUSINESS REPORT ONLINE