City of Joburg was not pressured into Afrirent tender, report finds

A forensic report has detailed how the City of Joburg was not politically obliged nor was it pressured to award a R1.2billion tender to local fleet management company Afrirent.

The investigation, by the Group Forensic and Investigation Services (GFIS) on behalf of the city council, follows reports which revealed that several months ago, Afrirent was allegedly awarded the contract without proper tender processes followed. The contract, originally awarded to Avis Fleet in 2012, meant that over the next 30 months, Afrirent would supply the city with 2732 non-specialised vehicles such as sedans, bakkies and minibuses and these would be used by departments, particularly metro police, City Power and Johannesburg Water.

However, eyebrows were raised when shortly after it clinched the deal, Afrirent transferred up to R500 000 to Mahuna Investments, a company reportedly run by EFF leader Julius Malema’s cousin and one which, according to media reports, served as a “slush fund” for the political party. Afrirent chief Senzo Tsabedze told Independent Media there was anti-competitive behaviour in the industry and a push to ensure black businesses did not flourish.

“We have already lost out on potential funding from Absa. No bank will touch us because our reputation has been tainted and this has all happened for no reason,” he said. He said while it felt vindicated by the outcome of the investigation, there was much work to be done in removing the dark cloud over their heads. The city council would not be drawn to comment, saying the investigations were ongoing.

In the investigative report seen by Independent Media, GFIS maintains that mayor Herman Mashaba called for a probe to ascertain if Afrirent was indeed appointed through political pressure. It detailed that after the Avis contract came to an end, the city council signed a new deal with Afrirent, consented by Mogale City, under Regulation 32 of the Municipal Finance Management Act which allows accounting officers to procure goods or services for the municipality under a contract secured by another organ of the state.

It established, among other things, that Afrirent has a R2 million tender with the Department of Rural Development and Land Reform in Limpopo for the provision of tractors and equipment, and that it also had to train local farmers. Because of the language barrier between farmers who spoke mainly Venda, Tsonga and Sepedi and Afrikaans-speaking project managers, Afrirent procured logistic and interpretation services from Mahuna Investment and made the R500 000 payment between May and July last year.

It said Afrirent’s contract with the city council was only finalised between October and November last year. GFIS said it questioned Tsabedze on the link between Mahuna Investments and the EFF, and he emphasised he had no knowledge of such a relationship. It concluded that based on the interviews conducted with the 29 role-players, it was clear that city officials were not politically pressured in handling the tender and recommended, among other things, that the city provide probity reports at the start of each tender process and that it allow ample time to get its house in order before opening up a new tender process.