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Construction company sues City of Cape Town alleging fraud and tender corruption

Ismail Rajah, 69, who was kidnapped in March this year from his company’s offices by armed men. Police have said the search for Rajah continues. Picture: Supplied

Ismail Rajah, 69, who was kidnapped in March this year from his company’s offices by armed men. Police have said the search for Rajah continues. Picture: Supplied

Published May 23, 2022

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Cape Town - A Cape Town construction firm Good Hope Construction (GHC) has served papers on the City of Cape Town alleging fraud and tender corruption.

The company is owned by businessman Ismail Rajah, 69, who was kidnapped in March this year from his company’s offices by armed men. Police have said the search for Rajah continues.

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The issue surrounding the court case goes back to May 2019 when the City advertised a tender for the repair, maintenance and upgrade of rental stock staircases across the Cape Flats.

In its affidavit, signed by Muhammed Rajah, GHC said the company complied with all the tender requirements and submitted its tender documents to the City by the closing date of June 18, 2019.

On November 25, 2019, the supply chain management bid adjudication committee, the BAC, adopted a resolution that GHC had won region one and region two of the bid and that GHC was the preferred bidder.

Between December 2019 and January 2020, the City and GHC engaged in negotiations on the terms of the contract, during which the pricing for each line item relevant to the tender was agreed to.

In February 2020, the council adopted a resolution approving it, subject to an appeal being lodged against the award within 21 days, as per the rules of the Local Government Municipal Systems Act.

Shortly afterwards, the council approved the award and it appeared in the list of tenders awarded by the City for the month of February 2020.

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However, in March 2020, GHC was informed by the City of an appeal against the tender and in July 2020 the tender was cancelled.

Rajah said in the affidavit that two weeks before the cancellation of the tender he had spoken to then-mayor Dan Plato, who had requested an investigation of the possible cancellation of the tender by the City’s special investigating unit (SIU).

“I was informed that the City was investigating another case of tender fraud that was uncovered by a well-known crime fighter in the province, Hanif Loonat.”

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He said Loonat told him that the commercial crimes unit of the police was also investigating active tender fraud in the City, and that the persons of interest in that case were the same persons who dealt with his cancelled tender.

He said he became concerned and suspicious when he heard that the SIU had stopped investigating and that the matter was now in the hands of the City’s forensic unit.

This forensic investigation was accompanied by a promise that the report would be released by January 2021 but to date they have not had sight of the report.

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In the meantime, Rajah said in his affidavit that he had lodged two separate Promotion of Access to Information Act (PAIA) requests to the City looking for information about the tender.

Responding to queries about whether they would be defending themselves in the case, City spokesperson Luthando Tyhalibongo said: “The City is unable to comment as this matter is sub judice in terms of court processes.”

Regarding why the forensic investigation into the tender was never released, Tyhalibongo said: “Any member of the public can, in accordance with the Promotion of Access to Information (PAIA) Act, apply to the City’s PAIA department for access to a forensic report.”

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