Mystery surrounds the R3bn tenders

Explosive documents leaked to the Daily Dispatch have shown that Nelson Mandela Bay Metro spent close to R3-billion on 13 contractors within five years without valid contracts.

The money was paid to companies working on NMB’s Integrated Public Transport System (IPTS) projects between 2011 and 2015.

The MEC for cooperative governance and traditional affairs (Cogta) MEC Fikile Xasa has confirmed that the provincial government has demanded answers from NMB on the payments.

Some of the contracts, worth more than R200-million, were awarded without formal tenders while an employee allegedly awarded a tender to one service provider before resigning from the municipality and joining the same firm.

In documents seen by the Daily Dispatch, it is further revealed that the metro also awarded a company work worth R1-million but ended up paying R282-million.

According to the documents, 13 companies cashed in R2.65-billion instead of R322-million initially budgeted.

Of these companies, three shared the same address.

Xasa’s spokesman Mamnkeli Ngam said: “The department views the allegations contained in the MEC’s letter to the metro in a serious light insofar as government’s commitment to combat fraud and corruption is concerned.

“We have not received a formal response from the metro in this regard.”

Nelson Mandela Bay Metro city manager Johann Mettler said the matter was being investigated by the public protector.

“The necessary documents or information has been furnished to the said investigator,” said Mettler.

Public protector spokesman Oupa Segalwe confirmed that they were investigating the case.

The documents, also sent to Xasa, reveal that these companies were allegedly appointed outside the supply chain management policy on a month-to-month basis and apparently this was not reported to the metro council.

A whistleblower reported it to the Eastern Cape government and Xasa wrote to the metro calling for an explanation of the appointment of contractors and sub-consultants in the IPTS projects.

“I am required to explain the situation to the complainant as well as the Public Service Commission in order to indicate how your municipality has or will deal with the various matters,” said Xasa.

Xasa also wanted an explanation on how an employee took up employment with one of the companies “whereas the company was paid R14-million and it is questioned whether or not this person had a hand in the awarding of work to the company”.

These are the amounts various companies were allegedly paid by the metro:

lR99.7-million although no formal tender was awarded;

lR216.8-million although no formal tender was awarded;

lR758-million instead of the R199-million tender awarded;

lR282-million although the initial work was costed at R1-million;

lR66-million although the initial tender amount was R7-million;

lR282-million instead of the R39-million tender amount;

lR119-million instead of the R2-million tender amount;

lR550-million for R73-million tender; and

lR54-million for a R1-million tender.

A further R225-million was paid to four other companies with no formal tender awarded.

Ngam said they would follow up and request the metro to provide an official response.