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VIDEO: Contracts involving over R40 million now part of forensic investigations at City Hall

Apr 25, 2017
VIDEO: Contracts involving over R40 million now part of forensic investigations at City Hall

At the initiative of Nelson Mandela Bay Municipality Executive Mayor, Athol Trollip, several contracts that the Nelson Mandela Bay Municipality has with several contractors have come under scrutiny over alleged irregularities, impropriate and possible corruption.

While addressing journalists on Tuesday, Trollip that the Metro was launching high-level forensic investigations into three contracts worth several millions of Rands.

“Before the election and after the election when the coalition government was created we made a commitment that we were going to stop corruption and it was it was very clear. We weren’t going to fight a war against corruption or do whatever we could. We said we were going to stop corruption,” he said.

“In order to stop corruption, I took some decisions, shortly after being elected Mayor that we had to deal with some of the instances where corruption was suspected in the past because we did not just come into government out of a vacuum.”

The Mayor said 193 tip-offs have been received through the Municipality's Ethics Hotline launched in October 2016. 69 of these are currently being investigated by Internal Audit and another 68 are being investigated by other Directorates.

A large amount of information has been received through the hotline and directly from individuals. This has culminated in one of the biggest moves against corruption the Metro has ever seen.

"The ones that I will discuss here are three instances that I have chosen to look into in particular - but there are others that have come to my attention today.”

Mohlaleng contract

Trollip said that the first questionable contract is a media and communications tender that was awarded to Mohlaleng Media.

"The company was awarded a contract for an initial amount but it then quickly morphed into something much more considerable that the original amount and it was basically uncapped. It was a free for all,” he said.

"Many of the transactions that were taking place with the company were being directly influenced by political decision makers - and I want to stress that because political decision makers at the time where in complete control of the municipality and supply chain management processes were not always observed.”

The Mayor said that many of the responsibilities assigned to Mohlaleng were directly linked to party politics - printing of brochures; printing of promotional material, communications, advertisements etc.

“In fact, I cannot name them all because they are under investigation. When I decided to freeze the Mohlaleng contract it was done on enough evidence to make an informed decision that we were not going to pay one more cent to those contractors,” he said.

"There was some evidence that there would be some resistance to that and in fact we had a meeting with Mohlaleng's directorship and they arrived at the meeting with a legal representative.

“I simply said to them that the contract is terminated and that we are not going to pay a cent more. We have not heard from Mohlaleng since.”

Trollip said that R20.8 million was paid to the company - which is considerably more than the original contract “and even the awarding of the contract is suspicious”.

"There are ongoing internal investigations of misusing public funds for political electioneering as I have said. There are serious allegations of inflating of prices,” he added.

The Mayor said that Mohlaleng was tasked with facilitating the Nelson Mandela Cultural Festival and they were paid R7.58 million for this.

“However, the initial facilitator, who was awarded the contract to do that was a company called Harmocept, whose contract was cancelled.

Harmocept then took the municipality to court - that matter is still in court. So Harmocept is challenging the cancellation of the contract, which was then subsequently given – not awarded, to Mohlaleng,” he said.

“I have made a recommendation that the City manager appoints somebody to lead this investigation and to take it further.”

The Mayor said the Metro would seek to recover all public monies where irregular dealings are confirmed.  

"The issue here is not to simply freeze or terminate a contract - because if you freeze or terminate a contract that is under question, it means that you a tacitly supporting what transpired,” he described.

“We are not going to tacitly support anything that has a hint of maladministration or corruption. So, we want to go for recovery - the people, who have been given or taken money irregularly, we want to recover that money.”

City of Champions contract

"We spent R21.7 million on this project and there have been serious allegations - I have testimonies and documentary evidence, of personal expenditure of public money. Much has also been published about the contract.

"Then there was also an allegation made that one cannot put a price to the object of social cohesion. The question then arises, if you cannot put a price to social cohesion, how was the contract value determined in the first place to award a contract of R21.7 million,” the Mayor said.

"If you are contracted by a municipality to implement a project on social cohesion, there must be an evaluation tool to see whether you have achieved the objective.

"The interesting thing about that contract is that it was supposed to run for three years - it was conducted over two years. Job done, money paid and happy contractor gone with very little to show for it.

"We are also going to appoint a suitably qualified person to lead that investigation. And if any irregularities are confirmed and any corruption is found to have taken place, we are also going to pursue the recovery of that money.”

Milongani Eco Consultants

"It came to my attention some time ago and it was a matter for discussion at Mayoral Committee level and also with the City manager that Milongani Eco Consultants were operating their affairs with a consultant, who was based in the Public Health offices,” Trollip said.

"He was also a former employee of the Department of Public Health. So, Milongani Eco Consultants was running their business out of municipal offices with a former municipal employee as the point-person for running these operations.

“I brought to the attention of the City Manager some months ago. I have asked that all these contracts be investigated.

"There are allegations about invoices and pricing. Duplicate VAT charges and inflation of contract values. We have appointed a company to do forensic investigations on all those invoices that were paid to Milongani Eco Consultants.”

He said that three laptops were seized from Nelson Mandela Bay Municipality staff on Friday in connection with these investigations.

"Subsequently, three more laptops have been seized and other documentary evidence.

“What we found is that since I asked the City Manager to stop transactions with Milongani Eco Consultants there have been some that were processed since then,” the Mayor said.

“They were processed shortly after the R15 million adjustment budget allocations to the Department of Public Health to fight the War on Waste.

"There are questions that have been asked around those invoices and transactions - some of the invoices that had been prepared were withdrawn. That has given rise to this investigation.

“Not only the irregularities, but the actions that have transpired since the identification of the irregularities.”

Trollip said that he will not leave any stoned unturned in ensuring clean governance at City Hall so as to guarantee service delivery to residents.