The orange bag recycling programme is meant to encourage the recycling of paper and plastics.
The orange bag recycling programme is meant to encourage the recycling of paper and plastics.

SIU to probe R90m ‘orange bag tender fraud’

By Bheki Mbanjwa Time of article published Sep 7, 2018

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Durban - President Cyril Ramaphosa has authorised the Special Investigating Unit (SIU) to probe the R90 million orange recycling bags tender awarded by the eThekwini Municipality under suspicious circumstances in 2015.

In a statement issued yesterday, the Presidency said the investigation “will look into alleged fraudulent and any related unauthorised, irregular or fruitless and wasteful expenditure, underperformance or non-performance by contractors, and the conduct of directors of the company or companies involved in this tender.”

This investigation comes after the collapse of the orange bags recycling programme, with the city admitting this week that the orange bags were unavailable, and that it was in the process of appointing a new supplier.

The R90m contract that is now the subject of an SIU investigation was awarded to Persian Star Investments 11 CC, allegedly based on misrepresentations the company had made while bidding.

In February, The Mercury reported how a forensic investigation found that not only had the company submitted fraudulent documents, but it lacked any capacity and technical expertise needed to produce the bags.

Awarding of the tender to Persian resulted in disastrous consequences as the company failed to deliver on its first order in 2015, and ended up entering into an arrangement with a competitor which produced bags on its behalf that did not meet the specifications, the report states.

It continued to fail to deliver the required bags, and this resulted in its 36-month contract being terminated last year. The forensic investigation by an independent firm had also found that senior officials in the municipality had played a role in the irregular awarding of the tender.

Since the disastrous contract, the city has failed to supply the orange bags, which are distributed to households so that recyclables don’t make it to the landfill sites but are collected separately and taken to sorting sites by contractors.

This week, a group of contractors threatened to take the municipality to court, complaining that the erratic availability and sometimes non-availability of the orange bags had led to their incurring financial losses.

Mayor Zandile Gumede, through her spokesperson Mthunzi Gumede, called on officials to “avail themselves so that the investigation is scrupulous and credible”.

“Since taking up office in 2016, mayor Gumede has always instilled a high level of ethics and compliance for clean governance in the city,” Mthunzi said.

The head of Durban Solid Waste, Raymond Rampersad, said the orange bag recycling programme was a wonderful programme, saying it would be resuscitated and remodelled.

“It is unfortunate that there was some collusion in the whole process.”

He said the aim of the programme was to protect the environment. He explained the importance of the programme, saying it meant less waste went to the landfill sites. “There is no land that is available for landfill sites, and general municipal waste is about 1.8 million tons a year. The more we recycle, the more this does not grow.”

Richard Harper, who worked in the recycling industry and was involved in the orange bag programme in its early years, said the lack of orange bags had meant less waste being diverted from landfills, and this had come at a substantial cost to the ratepayers.

He noted that municipalities were legally obliged to support recycling initiatives.

Opposition parties in the eThekwini council welcomed the news of the SIU investigation.

Zwakele Mncwango, leader of the DA in KZN, said his party welcomed the investigation and hoped it would result in prosecution.

“All those who are found to be corrupt must account. It must not only be officials because we believe politicians were also involved. All that the investigators need to do is to follow the money because there are always politicians behind such things,” Mncwango said.

IFP councillor Mdu Nkosi welcomed the investigation, saying the people of eThekwini deserved to know the whole truth regarding the matter.

“It could be that politicians were also involved in this corruption and we want all of that uncovered,” Nkosi said.

The Mercury

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