Nelson Mandela Bay Municipality paid R11 million for a laptop with IPTS software

AUGUST 24, 2015

The Nelson Mandela Bay Municipality paid a Port Elizabeth-based company, Jarami Projects cc, which is owned by businessman, Fareed Fakir, about R11 million for a laptop that apparently had software to manage the City's stagnant Integrated Public Transport System (IPTS).

According to documents seen by RNews, local legal firm, Le Roux Incorporated Attorneys, which previously offered to reimburse the city of R2 million, which it reportedly received for services rendered on the IPTS, facilitated the payments.

"Le Roux Inc were appointed by the NMBM to provide expert legal services for the municipality," explained AfriForum Port Elizabeth Vice Chairperson, Kobus Gerber. He is also the chairperson of the Nelson Mandela Bay Ratepayers Association (NMBRA).

"As part of the investigation into spending against the IPTS project, payments made to Le Roux Inc came under scrutiny due to the total of payments made during the period under review being in excess of R28 million in the 2013/14 book year. It is adequate that SCM processes were not followed within the IPTS office and Le Roux was used as an 'agent' to bypass SCM processes."

Gerber said that the initial two payments made to Le Roux Inc during December 2013 that came under review were both for an amount of R6 902 780.94 - related to invoices received from Jarami Projects cc, and a 10% professional fee due to Le Roux Inc on the said invoices, in respect of a Legal Compliance Project Management System within the IPTS. Le Roux's Profession fee was R550 451.00 plus vat per invoice.

"On further investigation, we discovered that the two payments made to Jarami Projects for the Legal Compliance Project Management System, which was delivered to the project manager, Adv Tshamase, were as follows:

  1. A laptop has been delivered with the system installation and submitted to the project manager – R2 386 986
  2. The template have been installed on the laptop and have therefore also been delivered – R3 634 848
  3. The solution was integrated into the project management system solution and installed on the delivered laptop – R4 987 386 - totalling R11 009 220 for the said laptop and software."

Jarami Projects is believed to have designed the software between July 2013 and June last year. But did the city get its return on investment?

"It is unclear where the laptop and software [have] been used seeing that the IPTS office appointed thirteen Consulting Companies to assist Adv Tshamase and the IPTS office with a total cost of R188 803 502.22 for the 2013/14 book year," said Gerber.

"We [are] yet to see the laptop to be able to assess the value of the software on the laptop."

He said that AfriForum was already busy filling a High Court application against this irregular appointment and reclaim all payments to Le Roux and Metro officials involved.

"This application forms part of AfriForum ‘s legal action against corruption and will be the 2nd of 40 application’s against contractors and officials to recover all irregular expenditure on the IPTS system."

The payments to Jarami form part of National Treasury’s probe into what has become the Nelson Mandela Bay Municipality's biggest scandal to date.




For articles related to the IPTS scandal, click HERE.