Durban - THE eThekwini Municipality has been called to answer, after a multimillion contract was allegedly awarded to a company with links to a Durban businessman who is facing charges of corruption, money laundering and manipulating tender award processes.
The R16.9 million contract for sewer reticulation was allegedly awarded to a construction company linked to the businessman in February this year.
The businessman is a co-accused in the criminal investigation involving former mayor Zandile Gumede and city manager Sipho Nzuza. They are facing charges of corruption, money laundering and racketeering.
Gumede and Nzuza appeared in the Durban Commercial Crimes Court yesterday together with their co-accused on charges linked to the R400m DSW tender fraud.
The matter was postponed until September 10 as the State wanted more time to collect evidence in the form of cellphone records and bank statements.
“The State believes that within six weeks it will finalise its investigation. If they don’t, we will bring an application for the matter to be struck off the roll until the investigations are complete,” said Gumede’s lawyer, advocate Jay
Naidoo who spoke to media outside court.
The DA’s caucus leader in eThekwini, Nicole Graham, has written to the city’s leadership and the head of the Integrity and Investigations Unit after “picking up” on the alleged contract details.
“I have received responses from the mayor and the speaker that they would look into it. It is absolutely astounding that someone could be on bail and still be receiving municipal work. We are raising this as an issue because it does need further investigation.
“The city manager who allegedly signed off on that contract is now a co-accused with the businessman,” Graham said.
City spokesperson Princess Nkabane said: “Without responding specifically to the company that you have named, please note that when the city awards contracts or tenders, it is religiously governed by supply chain protocols as stipulated in the Municipal Finance Management Act.
“In the event there are instances that such protocols are disregarded, the city has a fully fledged unit that is responsible for investigating any allegations of fraud and corruption.”
She said the city needed more time to test the veracity of the allegations against the businessman.
“For the city it will always be a priority to ensure that at all times there is value for money. To date, we are very proud of the strides that we are making in dealing with fraud and corruption in our system,” added Nkabane.
The businessman is being investigated on two separate corruption charges linked to the city.
In the DSW matter, Gumede, deputy speaker Mondli Mthembu, city supply-chain head Sandile Ngcobo, waste disposal contractors and a number of other city officials were arrested and charged over the inflation of the
contract from R25m to more than R400m.
They face allegations of allegedly splitting the contract between four companies that did not have any waste removal experience or infrastructure by manipulating the award process.
He has also been charged in another matter in which it is alleged that the city’s supply chain management deputy head, Sandile Ngcobo, conspired with certain service providers in 2017 and received illicit benefits in the form of a R1m Jaguar sedan, reportedly bought for his wife.
Graham said the businessman’s chequered history, and the fact that he was out on bail for two separate corruption matters relating to the city, brought into question how another multimillion-rand contract was allegedly awarded to him and his company.
“This is incredibly concerning and people have lost all hope that we will ever get to the bottom of corruption in the city. It is incidents like this that make it worse,” she said.
In 2018, the Durban High Court ordered the eThekwini Municipality to reinstate a company linked to the businessman as a service provider after it was blacklisted following a report by the
City Integrity and Investigations Unit (CIIU).
The CIIU report contained damning findings, including that the company allegedly committed irregular practices in a multimillion-rand chemical toilet scandal.
The company denied the allegations and approached the courts to have their blacklisting overturned.
The IFP’s Mdu Nkosi said that the criminal court proceedings needed to be expedited so that if these companies and directors were found guilty of the charges, the city could justly refuse to do business with them.
He said that in this case, it seemed the city’s “hands are tied” as there was no illegality in awarding the contract to the company.
“I have also asked questions about dealing with individuals and companies that have a bad history.
“The responses one gets is that you cannot punish a company because of charges an individual is facing.
“The court is letting us down because it is taking too long to finalise these cases. Sometimes the justice system in the country fails residents of South Africa,” he said.