A probe into a R24m toilet tender in Nelson Mandela Bay has revealed that the tender process did not tick the legal boxes, with plans afoot to claw back the money meant to see 2,000 toilets built in the city.
This was revealed on Friday by the Special Investigating Unit, which has since approached the Special Tribunal established by President Cyril Ramaphosa to recoup the money paid out during the height of the Covid-19 panic in 2020.
SIU head Andy Mothibi also revealed the finalised investigations and outcomes into allegations of corruption concerning Covid-19 personal protective equipment (PPE) procurement by state institutions at a press briefing.
HT Pelatona Projects was appointed to build the toilets by the municipality on April 28 through a deviation, using the three-quote system.
Mothibi revealed that the company, based in the Free State, was appointed on April 17, 11 days before the award letter was issued.
“There was no fairness or competitiveness in the procurement processes.
“The investigation is completed in this matter,” he said.
“The declaration of a disaster management period as a consequence of the outbreak of the Covid-19 pandemic was used as a ground to circumvent proper procurement processes and a nonexistent emergency was thus relied upon.”
The appointment of HT Pelatona Projects came after the municipal housing department requested a contractor to install the toilets in KwaNobuhle, Motherwell, Rosedale and Red Location.
Mothibi, however, said fewer than 200 toilets, including fixtures and amenities, had been built,
In an e-mail to acting city boss Mandla George on November 3, seen by Weekend Post, the SIU instructed that all payments to the company be stopped.
Mothibi said the SIU would ask the Special Tribunal for a declaratory order on the validity of the contract and interdict the municipality from proceeding with the procurement processes.
“Before commencing on these proceedings HT Paletona instituted proceedings in the high court.
“The SIU will join the proceedings in the high court and seek a declaratory order on the validity of the contract.”
HT Pelatona Projects’ Morne van der Linde said the company had filed papers before the Port Elizabeth High Court in November.
“We completed most of the work at our own cost and have paid the subcontractors and labour.
“We were requested to assist them with the toilets and that is what has been done.”
He said the company was owed about R7.9m for 733 toilets installed.
“The payments certificates have been approved.
“The municipality has filed a notice to abide by the court’s decision together with an affidavit confirming that they agree that the money is due and owing to HT Pelatona Projects.
“All payment certificates on which the contractor’s application is based was certified in terms of the agreement and the work has been duly completed.”
He said work had been stopped because only about R1m had been paid.
“We have gone to court because what must we do.
“We have done all the work. We have been the funding agent on the project, with everyone paid expect us.”
In court papers, Van der Linde stated that the municipality had never complained about the workmanship.
“There can be no dispute regarding the [municipality’s] obligation to pay.”
He said the company had not been shown any evidence that the SIU had requested a payment freeze or that the municipality had agreed to the instruction.
“But even if, as an abstract proposition, the [municipality] did provide the SIU with such an undertaking, [we] contend is unlawful and provides no lawful basis to perform its obligation to make payment.”
He said the proclamation given to the SIU by Ramaphosa did not include the freezing of payment.
“The SIU is not imbued with that power.”
George filed a notice to abide by the court’s decision in January.
“It is respectfully submitted that the decision to file a notice of opposition and not pay the amounts in respect of the respective payment certificates was precipitated and caused by the SIU.”
Ramaphosa established the tribunal in early 2019 to bolster the government’s fight against corruption, fraud and illicit money flows.
By November 25 last year, the SIU had instituted civil matters at the Special Tribunal to the value of R259m for review, which included the recovery of state funds in relation to corrupt activities associated with the state of disaster.
Mayoral spokesperson Morne Steyn, who is also a DA councillor, welcomed the news on the decision to approach the Special Tribunal.
“The party requested a long time ago for these matters to be investigated and we will eagerly wait for the ruling.”
Mayor Nqaba Bhanga, who was then a councillor, wrote to the SIU in September asking that the unit investigate Covid-19 corruption in the city.
“Bhanga laid a complaint regarding the money spent on Covid-19.
“Anything that looks untoward on Covid-19 spending needs to be investigated,” Steyn said.
HT Pelatona Projects was included in the report that named companies which had supplied Covid-19 services to the municipality.
The contract is just one of 58 being probed by the SIU in Nelson Mandela Bay, totalling R168m.
It was also revealed that 619 contracts were being investigated across the Eastern Cape worth a combined R2.9bn.
“The allegations reported to the SIU involved among others the irregular procurement of personal protection equipment (PPE), hospital and quarantine sites, catering services, ventilators, disinfecting equipment and motorised wheelchairs,” Mothibi said.
He said that the unit had made 38 referrals to the National Prosecution Authority for prosecution for fraud, corruption and contravening supply chain management policies.
The proceedings before the Special Tribunal also include the freezing of the pensions of officials who have resigned from their positions while investigations are under way.
The rand value of actual cash or assets recovered as at February 4 was R127m, Mothibi said.
Matters referred to the Special Tribunal included one in the Eastern Cape, where the SIU launched civil proceedings concerning the procurement of motorcycles with sidecars to the value of R10m, for an aborted rural “ambulance” project.
The Treasury indicated that R30.7bn was spent by state institutions between March and November last year and of that, R13.3bn of that expenditure was under investigation by the SIU.
Mothibi said the SIU had finalised investigations into 164 contracts (26% of contracts under investigation) to the value of R3.5bn.
He said 1,541 of contracts to the value of R6.8bn were being investigated and 851 contracts were still to be investigated.
Mothibi also said the SIU had identified R260.6m that could be recovered by other means, other than through referral to the tribunal.
He said this was the rand value of cash or assets that were potentially recoverable in instances where service providers acknowledged their debt or liability.
“In that instance the SIU and the state institution concerned will look at this and ensure this is quantified correctly. If the state institution is satisfied, then we will enter into an acknowledgment of debt.”
Mothibi said during its investigations, it appeared that people in positions of authority within some state institutions believed that the declaration of a national state of disaster meant that all procurement was automatically now conducted on an emergency basis, and without any need for compliance with any of the normal prescripts regulating public sector procurement.
He said evidence indicated that officials merely rubber-stamped or accepted and gave effect to “unlawful” instructions from officials more senior than them.
He said this resulted in a complete breakdown of the checks and balances normally afforded by the principle of segregation of duties.
The SIU began its investigations after a proclamation by President Cyril Ramaphosa in July last year to investigate any improper conduct in the procurement of goods or services by state institutions in respect of the national state of disaster.
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