Investigation under way in eThekwini Municipality after money meant for housing project disappears

People walk past the Durban City Hall building.

An investigation is under way after funds, which was earmarked for an eThekwini housing project, went missing. File Picture: Doctor Ngcobo African News Agency (ANA)

Published Oct 13, 2023

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Durban - A high-level eThekwini Municipality investigation is under way into the disappearance of millions of rand meant to build houses for impoverished City residents displaced by floods.

While The Mercury could not confirm the total amount missing, sources believe that it could be as much as R32  million.

The investigation, which is being spearheaded by the City’s Integrity and Investigations Unit (CIIU), has left councillors shocked after it surfaced that not a single official had been held accountable.

The details around the housing project the money was destined for, and conditions under which it disappeared, are still unclear. However, The Mercury understands that not a single house was built, but at least one company with business addresses in Musgrave and Bergville received some of the payments.

Municipal spokesperson Gugu Sisilana confirmed that the investigation into the missing millions was under way.

A snap survey done by The Mercury demonstrated that a lot of good could have been done to resettle flood victims with the money. Rough calculations show that close to 100 houses could have been built if applying the model of the Kanku housing project in Isipingo, where the municipality forked out R70m to build 360 low-cost houses.

To date, there are dozens of flood victims living in tough conditions who are waiting to be permanently resettled. One official, who asked not to be named for fear of reprisal, said: “This was pure greed and corruption; nothing more.”

He confirmed that the CIIU was investigating the matter, adding that they had received the report containing the allegations three weeks ago.

“What they have been able to establish so far is that one main contractor was appointed to lead the project, and that main contractor subcontracted to two other companies. But now the main contractor cannot be traced, as well as the other contractor that was subcontracted. Only one contractor can be traced through the payments.

“What is further troubling is that documents relating to this contract cannot be traced, and of the documents that can be found, City officials whose signatures appear on the documents are claiming that their signatures were forged,” said the source.

Municipal Public Accounts Committee (Mpac) chairperson Thami Xuma said: “We will wait for the investigation to be completed, but what we have said is that we want the investigation completed and brought to the Mpac committee within the next two weeks.”

Lawrence Pato, head of the eThekwini Human Settlements unit, refused to answer any questions and directed all enquiries to the municipality’s communication unit.

IFP councillor Mdu Nkosi said it was shocking that people could steal money meant for the victims of a disaster. He called on President Cyril Ramaphosa to authorise an investigation by the Special Investigating Unit (SIU).

“It is shocking that there could be people who are so callous as to steal money meant for flood victims. It is becoming clear why there are so many service delivery problems in this municipality, why there is a housing crisis and why the number of informal settlements keeps increasing,” said Nkosi.

DA councillor Thabani Mthethwa said the municipal funds were not missing, but stolen.

“For money to leave a municipal account, someone had to sign off, and that person should be found and arrested. The municipal manager must ensure that the person responsible is arrested, as he is in charge and the buck stops with him. If he fails, the council should take action against him.”

ActionSA councillor Zwakele Mncwango said while they were not aware of the stolen funds, they would pose questions to the council.

“One needs answers as to where the money is, I think that is what really matters right now. If the houses were not built, what happened to it? Answers must come from the accounting officer, and that is the municipal manager,” said the ActionSA provincial leader.

Municipal spokesperson Sisilana said the City had all the relevant information relating to the contractors.

“An investigation is pending in relation to the allegations. It is not true that the main contractor cannot be traced by the City Integrity and Investigation Unit because the companies are known, and this forms part of the investigation.

“However, there is no investigation of this nature that can be finalised in two weeks; the duration of the investigation will be determined by the extent of the contract being investigated,” said Sisilana.

The office of the mayor and mayor Mxolisi Kaunda were approached for comment. The office of the mayor said it would not comment on the matter, and that the City’s comment would suffice, while the mayor said he was overseas and was travelling back to the country.

THE MERCURY