Tender irregularities: 5 firms face charges

Criminal charges have been filed against five companies that allegedly colluded with each other to get tenders from the eThekwini Municipality. Some of the companies seemed to be related to each other as they had married directors, common staff and contact numbers. Their practice of allegedly deciding among one another which of them would get which contract from the municipality was uncovered by a KPMG investigation, which released its report in August this year after a six-month investigation. eThekwini municipal manager Sibusiso Sithole told the full sitting of the council yesterday that the municipal public account committee and council had dealt with specifics of the KPMG report and decided to institute charges. “It suffices to say that we have reported the matter to the SAPS in terms of the Proceeds of Crime Act,” he said.

He said the municipality was now looking at blacklisting the companies. “The challenge is, do we blacklist all companies or simply one company and director who is alleged to have perpetrated a certain act of this conduct? That is the matter that blacklisting committee will apply its mind to,” said Sithole. Company 1 was awarded one project to the value of R952 789.

• Company 2 was awarded four contracts to the value of R137.3m.
• Company 3 and Company 1, as a joint venture, were awarded three contracts to the value of R129.46m.
• Company 4 was awarded five contracts to the value of R341.29m and one as a joint venture with another company to the value of R89m.
• Company 5, as a joint venture with Company 4 and Company 3, got one contract to the value of R46.86m.

Sithole said the municipality was also considering action against municipal employees who were involved. The municipal manager was responding to questions raised by DA councillor Martin Meyer. Meyer had wanted to know what actions he had taken, when the KPMG report would be released to Exco and full council and when it would be made public. Sithole said the Municipal Public Accounts Committee was the only one that could decide whether to make the report public after it had deliberated on it and checked the legalities. IFP councillor Mdu Nkosi said that the municipality should have already decided whether to blacklist all the companies or not based on the KPMG report.

“KPMG have done the job, they have investigated the matter and then they have given the results. The municipal manager is playing hide and seek. This is clear. Sithole is supposed to take steps and say we are blacklisting this company or we are blacklisting all the companies,” he said. The directors and staff of the companies previously said they were aware of the KPMG investigation, but had not seen the final report. They strongly denied allegations of collusive tendering, but could not comment on the report’s findings.