The North West Province’s Department is being dragged to court by a property developer that is demanding payment for a variation/top-up on a housing contract. File Picture:
The North West Province’s Department is being dragged to court by a property developer that is demanding payment for a variation/top-up on a housing contract. File Picture:

NW Human Settlements dragged to court over alleged R30m irregular tender

By Karabo Ngoepe, Mzilikazi Wa Afrika Time of article published Oct 25, 2020

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Johannesburg - The North West Province’s Department of Human Settlements is sitting with a headache of more than R30 million following a contract that was entered into without following proper procedures.

The department is being dragged to court by a property developer that is demanding payment for a variation/top-up on a housing contract.

According to sources in the department, Tigane Developers is seeking payment following an agreement that was signed in March between the company’s Theo Masie and department’s head of housing, Vusi Bidi.

But the agreement was flagged for not following proper procedures.

“The agreement was entered into, signed and approved without it being accompanied by a report from a team of experts. Mr Bidi then sent it to the CFO who then questioned why there was no report to motivate for the top-up,” said a source speaking on condition of anonymity.

“Another problem with the contract was that it was recommended by Mr Bidi that the company be given the top-up, and he again signed off on the approval as the HOD was not around that week,” said the source also alleging that Bidi demanded that the payment be processed.

“Mr Bidi instructed the CFO to pay it, but he responded by saying Mr Bidi must put that in writing, but he did not do that,” said the source.

Attempts to get a comment from Bidi were unsuccessful.

Last week, we reported that the auditor-general and Department of Public Service and Administration flagged Bidi’s appointment and recommended that he should not be chief director because he only has a National Diploma while the position requires a degree or NQ Level 7 qualifications.

According to the source, when the HOD, advocate Neo Sephoti saw the contract, she is alleged to have vindicated the CFO’s decision not to pay the amounts stipulated in it.

This week, Sephoti confirmed to Sunday Independent that proper procedures were not followed and the variation was never supposed to have been approved and the contract not signed.

“We found there was no technical report. Bidi, as the chief director, recommended the top-up, but in that week I was off, he signed as the head of the department as well.

“There is a serious conflict of interest. He could have put it aside until I came back. There was a letter indicating that there was no report on the variation order, but still, they wanted it paid. The team that deals with finances saw there was no report and refused to process it,” Sephoti said.

Sephoti confirmed that the department had received a lawyer’s letter from Masie’s legal team demanding that the department honour the agreement. This after numerous meetings with Masei, and during those, having indicated that the way the deal was entered into was dubious.

“We received a letter from his lawyer saying there is a contract with Mr Bidi as the acting head of the department and he wants to be paid the money. He was referring to an addendum that was signed agreeing to the top-up.

“Mr Masie came to the office to check why the variation was not paid, but he was informed that he is already 75% through his project,

We have to go to court to cancel something we should never have entered into in the first place so the top-up doesn’t make sense,” Sephoti said.

She further added that apart from the unavailability of the technical report accompanying the variation request, there were no minutes to indicate that the matter was addressed by the bid adjudication team and an agreement reached for such to be approved.

“I asked for minutes of the bid committee where this variation was discussed, but it was not on them.

“The head of a department signs off on variation orders of up to 20%, and when they are above 20%, they go to provincial treasury to determine if the person is entitled to one or not. That was also not done,” she said.

A variation or top-up is when a contractor requests more money from what was initially agreed upon to be able to complete a project. It’s said that not every contract will require a variation and each request must be evaluated and tested.

Tigane Developers’ request followed a previous variation or top-up request in 2019 for R7 million for geotechnical allowance.

The sources indicated that it appeared as though all the projects involving Tigane Developers required a variation.

The Sunday Independent has seen two such requests for 2018 and 2019 plus the 2020 request.

“The man is known as Mr Top-Up this side. In the majority of his projects, he requests a top-up and always gets it,” said the source.

Masie did not respond to questions sent to him.

Sephoti further added that the department has in the past been besieged by a culture of just paying for top-ups and when she took over, she tried to change that.

“When I got to the department, we found that regional managers would be writing motivations for the variations/top-ups. I indicated that doing so requires technical expertise.

“I indicated that if I’m told they have to dig two meters deeper than thought because of the soil condition, as a layman, I wouldn’t know what you’re talking about but an expert in the field could say yes, the soil is problematic or dolomitic.

“I indicated that these things must be accompanied by a technical report from the planning department to assure me that what I’m paying for is exactly on the ground,” she said.

Sephoti added that there have to be consequences for such things in the department as it left the department exposed to wasteful expenditure and possible lawsuits.

“We have to go to court to cancel something we should not have entered into in the first place. There need to be consequences for this action. When you find companies with variations at every turn, it says either planning is wrong, or something is completely wrong.

“The bid adjudication committee agreed that we should not have signed off on a variation order,” she said.

Sunday Independent

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