Durban - Pietermaritzburg’s New England Landfill crisis may have its roots in the Msunduzi Municipality’s acceptance of an unsolicited bid to build a R290million waste-to-energy plant, from a company that co-sponsored a junket for city officials to travel to Italy.
The net result, according to sources, is that the “deal” - which was formalised with a Memorandum of Understanding in 2015 - led to the city failing to consider any further realistic options, despite the fact that there was no clear funding source or any attempt to formalise a Public Private Partnership agreement to make the project a reality.
This was despite warnings, as recently as 2015 and contained in a February 2015 feasibility study, which found that “within maximum seven years, it would be necessary to build a new (landfill site) for managing municipality waste”.
It appears that the bid got stuck in a bureaucratic loop of endless meetings, with questions raised about the legality of the unsolicited bid as recently as October 2018, just months before the embattled municipality was placed under administration.
Subash Dowlath, the CEO of the Sandton-based SDB Holdings development company, which successfully submitted the bid and obtained the MOU, told The Mercury that SDB was still waiting for approval for the project from the municipality and National Treasury.
“While this matter was presented as an unsolicited bid, it nevertheless had to go through various supply chain approvals, ultimately an exco full council resolution together with concurrence from National Treasury, as required in terms of the Municipal Finance Management Act. As far as I am aware, the municipality has been engaging National Treasury and to date has not been advised on the outcomes thereto,” said Dowlath.
Municipal records obtained by The Mercury show that the city hedged its bets on the project proposed by SDB Holdings, which was given the opportunity after submitting an unsolicited bid in October 2014. A full council accepted the deal in principle a month later.
The records also show that in September 2014, SDB Holdings and its Italian partner Roncucci & Partners (R&P) sponsored part of the trip to Italy, which was undertaken by city officials and the then Environmental Affairs deputy minister, Barbara Thomson.
The junket included visits to sites using the technology SDB was touting to the city, known as Genius Energy Technology (GET). The technology provides recycling and energy-to-waste solutions such as anaerobic digestion, hygienisation and pyrolysis.
The official who recommended the project was Boniwe Zulu, who was last year sacked by the city for her allegedly fraudulent actions in unrelated matters.
The documents further show that one of the SDB Holdings directors - since resigned - was Luvo Makasi, the disgraced former chairperson of the Central Energy Fund. Makasi was fingered for selling South Africa’s oil reserves.
SDB’s deal also appeared to have significant political support from the since deceased environmental affairs minister, Edna Molewa, and then energy minister, Tina Joemat-Pettersson.
When asked about the high-level political support, Dowlath responded: “I am not aware of the political endorsement, but we did write to the minister of environmental affairs, as we believed that this was a unique proposition and could have assisted the environmental challenges in Pietermaritzburg.”
A well-placed source with an understanding of Msunduzi’s waste crisis told The Mercury that while the technology offered by SDB Holdings was proprietary, it was not the only offering on the market or even the right choice for the landfill, and that the city should have solicited bids.
“The plant they wanted to build is likely too big for the existing space at the landfill site. There is simply not enough land.
“The city needs a new landfill, not this project which could cost ratepayers in excess of R2 billion over its contractual period,” said the source.
According to the MOU, the city was expected to provide the land for free, but would continue to be responsible for waste collection and delivery. It would also pay the operator “R500 per ton for all treated waste”, which the operator would be able to onward sell. The operator would supply the municipality electricity at rates equivalent to Eskom’s “Schedule of Tariff”. SDB Holding was to build, own and operate the plant on a 20-year contract. According to one of several presentations, the plant was to be constructed within 15 to 19 months.
The landfill site, which until recently had no access controls, has experienced several fires over the years, necessitating the evacuation of businesses, schools and houses.
Detailed questions sent to Msunduzi Municipality three weeks ago had not been answered at the time of publication. The municipal manager had told The Mercury that he would follow up on the responses with the general manager.
The Mercury