Councillors raise concern over extensive use of Section 36 process to award contracts

The “excessive” procurement of goods without going out to public tender has raised concerns about possible abuse of this process by departments in the eThekwini Municipality.

Councillors raised concern yesterday in a council meeting following revelations that millions of rand were spent by the City with contracts awarded via the Section 36 procurement process. Section 36 contracts allow for the procurement of goods on an emergency basis, without adhering to the normal tender procurement processes.

A report before the committee noted that R915 million was the total value of the tenders issued in June this year. “During considerations, reservations were expressed in respect of Section 36 tender awards which were reported to be 65.4% of the total value of the tenders issued in the month of June with city fleet and Durban Solid Waste units being cited as the highest in terms of usage of Section 36.’’

The report noted that the most reported unauthorised, irregular and fruitless expenditure was derived from the application of Section 36 and it therefore should only be used for emergency purposes. IFP councillor Pastor Selvan Govender said their calculations show that of the total of R915m, Section 36 contracts accounted for R598m.

“Section 36 is too easily accessible, it is an avenue that stirs the temptation for corruption in an already tarnished City that analysts say breeds criminal behaviour.” ActionSA councillor Alan Beesley said they were deeply concerned that Section 36 tender awards have become the norm in the municipality as opposed to the exception.

“As these awards bypass normal procurement policies it is common knowledge they are open to corruption and fraud. The quantum of these Section 36 awards highlight the corruption endemic in the municipality. Once again the residents and businesses of eThekwini are paying the price for corrupt and incompetent leadership,” he said.

ADeC councillor Visvin Reddy said Section 36 was only meant to be used in exceptional circumstances where there was an emergency. “However, in this instance, 65% of the total value of tenders, amounting to almost a billion rand, was awarded using Section 36. This alone should raise red flags for all of us.

“It has become clear that some officials are failing to do their jobs, or even worse, manipulating the system to rig tenders in favour of their cronies. This is a breach of public trust and cannot be allowed to continue. Many instances exist where Section 36 was used to cover up delays in the finalisation of normal tender processes. This is highly irregular and may lead to adverse findings by the auditor-general, affecting the municipality's clean audit outcome.”

Reddy said the matter should be investigated immediately. “It is clear that tender rigging is occurring. We will not tolerate such fraudulent activity, and rogue officials behind these heinous deeds must be exposed and brought to justice.” ANC councillor Nelly Nyanisa said the concerns about the use of the Section 36 process were unfounded.

“Those with evidence of wrongdoing in these processes should consult with the relevant department. We use Section 36 so service delivery is not disrupted and we will continue to use this.”