The City of Cape Town Civic Centre. Picture: Marvin Charles/Cape Argus
The City of Cape Town Civic Centre. Picture: Marvin Charles/Cape Argus

ANC wants SIU to investigate Cape Town housing department for fraud and corruption

By Shakirah Thebus Time of article published Jul 7, 2021

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Cape Town - Western Cape ANC leader in the provincial legislature, Cameron Dugmore has written to the Special Investigating Unit (SIU) to investigate the City’s Housing Maintenance Department for alleged fraud and corruption.

Yesterday, Dugmore, requested that the SIU approach President Cyril Ramaphosa to issue a proclamation authorising it to probe the the City’s Housing and Maintenance Department and tenders to Maitland-based contractor, The Construction Co (TCC).

The allegations were first brought to light by anti-crime activist Hanif Loonat. Loonat lodged a fraud complaint with the City in June 2020, and eventually with SAPS on October 6, 2020.

“The CoCT Forensic Department promised an expedited response to the allegation of ongoing fraud and corruption. They were to provide SAPS with a report in October 2020, November 2020 and then December 2020. This did not materialise.

“When the Forensic Department was not forthcoming with information, the head of detectives approached the City manager and also requested the assistance of CoCT internal SIU to have the report provided to them.

“In January 2021, when the Argus reported on the matter, the City manager advised that he had all intention to provide the feedback, but the report was sent back for more investigation.

“It’s been six months and the City manager has either forgotten the promise of returning back to the SAPS expeditiously or is intentionally delaying the outcome,” said Loonat.

“The amounts run into allegations of millions of rand stolen, but I can’t provide any specific amount as SAPS needs to finalise this with the National Prosecuting Authority.”

In his letter to the SIU, Dugmore said a small portion of the alleged fraud is estimated at R35 million, and is being investigated by the police’s Commercial Crime Unit.

“The alleged fraud and corruption was brought to my attention by the claimant in the criminal case, Hanif Loonat, which involves alleged price fixing and manipulation of quotations for ill-gotten gains, increasing allowed tender awards beyond the contractual agreed sums as per tender conditions, items allegedly included in the tender awards being allegedly added as variations, services paid for that were allegedly never done, quotes that were accepted by an entire professional team that are allegedly more between 400% to 1 100% above market-related rates,” said Dugmore.

On March 25, the police’s Commercial Crimes Unit executed a search warrant at TCC, in connection with the fraud case reported by Loonat.

“It is alleged that more than 100 projects ranging from R500 000 to R2m have been issued in this term tender 243Q which many allegedly abnormally higher than the R2m tender limit. Many were at alleged inflated prices and not assessed fairly but accepted and validated by the professional team and finally approved by the CoCT officials.”

Dugmore said City officials had approved costs outside of what was contractually allowed and ignored specific tender conditions.

“This sum that was approved, amounted to R22m, which is allegedly overstated by 600%. Payments on these alleged inflated/fraudulent quotes have been made and were allegedly processed for a period of 11 months after the CoCT was highlighted to potential fraud and corruption,” he said.

Dugmore said the allegations and evidence point to corruption on a grand scale in the City and called for the mayor to release the report.

“What is concerning is that mayor Dan Plato promised a forensic report but has not released it for nine months. I believe it is critical that the SIU requests our president to sign off on a proclamation so these serious allegations which appear to reach deep into the City and its procurement processes can be investigated.”

City spokesperson Luthando Tyhalibongo said the investigation is still underway.

“The City has zero tolerance for non-compliance or corruption and will deal decisively with the outcome of the investigation if such is found.”

Meanwhile, TCC director Asif Khan said they have been fully co-operative and maintains they have not transgressed any laws. “Your newspaper previously reported with much fanfare of investigations by the Forensic Department of the City of Cape Town as well as the Commercial Crimes Unit of the SAPS, and notwithstanding the passing of a number of months, and complete co-operation by The Construction Co, The Construction Co has not been charged with any offence pursuant thereto,” Khan said.

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