By Michael Morris & Sarah Lockwood
Electricity boss Saleem Mowzer's new Regional Electricity Distributor offices in the city centre were refurbished for more than R5-million in a contract - signed without tenders being called - with a company based in his former council ward.
The contract, entered into without being budgeted for, and signed by axed city manager Dr Wallace Mgoqi in July, is yet another in a long list being probed by the new DA-led multi-party administration at the Civic Centre.
Awarded to Karibu Furniture Manufacturers, the contract is one of two awarded under controversial circumstances in relation to the offices.
Another contract for R912 000 was entered into under similar conditions with Kwezi V3 Engineers to serve the distributor as "maintenance consultant", bringing the total cost to more than R6-million.
Again, no tender was advertised and Mgoqi approved the contract and payments, according to mayor Helen Zille's spokesperson, Robert Macdonald.
Mowzer said on Wednesday that he "reject(s) utterly" that there was any wrongdoing in the process. "We followed the city's procurement processes correctly and it is ludicrous that people are trying to allege we did anything underhand or showed any favouritism."
The Regional Electricity Distributor - dubbed RED 1 - is a key player in the energy recovery plan aimed at restoring a sustainable electricity supply in the Western Cape.
This plan, and the restructuring of RED 1, was among the items on the agenda of today's mayoral committee meeting.
RED 1 was formed last May under the aegis of the city. On July 1, Mowzer, the former executive director of trading services in the council, left the city's employ to become the chief executive of RED 1.
On the same day, Macdonald said, city manager Mgoqi had given electricity staff notice to vacate their Civic Centre offices and move to RED 1's new premises in SHG House on the Foreshore.
The DA believes that on the grounds that there was no time to call for tenders, Mgoqi gave authority for three quotations to be assessed for the refurbishment of the offices, and gave the contract to Karibu Furniture Manufacturers.
The company was paid R5 273 304 for the design, layout and installation of walls, floors, ceilings, electricity, plumbing and furniture.
Under the Municipal Finance Management Act, all contracts exceeding R200 000 must be opened to a competitive bidding process.
The act does allow contracts to be awarded without tender, but only in "emergency circumstances".
When questions about the contracts were first raised some time ago, the DA expected that this would be the justification for the hasty deals.
But it argued: "The city knew for months that it would need the offices for RED 1, and there was no immediate threat to service delivery or the well-being of city residents that could qualify as an 'emergency' at the time".
The DA asked: "Why did RED 1 lease offices needing fitting out when other office space - perhaps less luxurious - could have been leased without incurring these costs? And was there a valid reason for the rush to get the electricity staff out of the Civic Centre?"
It has been noted that Karibu Furniture Manufacturers is a member of the Raya Hotels Group, both based in Gatesville, which falls under the ward Mowzer represented as a city councillor.
Senior councillor Belinda Walker confirmed last night that questions over RED 1's new offices were unresolved.
But Mowzer said Wednesday that he had discussed this situation with Zille and that "to the best of (his) knowledge" she no longer had any queries surrounding the contracts.
"I reject very strongly the allegations that we awarded contracts in anything other than the correct way," he said.
"Time constraints meant that we were unable to put the contracts to tender, but this is something the Municipal Finance Management Act allows for.
"We approached eight companies and of the three that replied, Karibu Furniture Manufacturers' proposal was both the cheapest and the one that could guarantee the work within our tight timeframe. I stand by the decision 100 percent."
- The probe into the apparent mismanagement of the troubled N2 Gateway housing project was the main item for discussion at today's mayoral committee meeting.
At issue is the R5m deal appointing BEE company Cyberia as the project manager for the first phase of the huge housing development, and an additional sum of R4.6m paid to Cyberia earlier this year as part of the termination of the contract.
In a telling confidential e-mail in the documentation tabled at today's meeting, the city's project co-ordinator, engineer Peter Oscroft, noted in December 2004 that the adjudication committee (that considered the initial responses to requests for proposals) "did not consider Cyberia sufficiently experienced in the housing and infrastructure field to consider them beyond the first stage".