The Siyenza Group said it would challenge Amathole district municipality (ADM) over its decision to cancel its controversial R631-million sanitation contract.Siyenza Group sole director Bongani Mpeluza broke his silence, claiming ADM had acted outside the legal framework when it terminated the contract in June.
Mpeluza, in response to a question by the Saturday Dispatch, said that the matter was sub judice.
“The contract was not terminated but was cancelled by Amathole. The matter has been referred for arbitration, therefore Siyenza is not in a position to verify your allegations as the matter is sub judice,” he said.
ADM spokesman Siyabulela Makunga said the municipality had no knowledge as to whether or not the termination of the contract was lawful or not.
“We do, however, find it strange that a party agrees to early termination of a contract and then views the termination as unlawful.”
He added that it had been ADM’s position from the outset that it procured the services of the Siyenza Group for its sanitation programme, under a contract secured by Municipal Infrastructure Support Agent (Misa) in terms of regulation 32.
“It follows then that when Misa and Siyenza by agreement terminated the contract, no further legal basis existed for Siyenza’s continued involvement in the ADM programme.”
Early this month the Saturday Dispatch reported that sub-contractors were disgruntled as they had not yet been paid for work done.
Contractors had also vacated construction sites although 66000 toilets in villages around the municipality had not been completed.
Subsequent to cancelling the contract with the Siyenza Group, the ADM indicated it was now considering recovering some of the monies from the company to ensure contractors are not short-changed.
The contractors alleged that ADM had promised to settle monies owed to them by June 30, but they had not yet received a cent.
“We have not been on site until we get paid as Amathole promised us.
“It’s been about two months since we have been on site,” said a contractor.
However, this was disputed by the municipality.
In an earlier response to the newspaper, Makunga said: “No such undertaking was made to contractors. The ADM understands that certain contractors sub-contracted to Siyenza were not paid and are likely not to be paid now that the ADM engagement with Siyenza has fallen away.”
He said said they were in talks with the Development Bank of Southern Africa and National Treasury to see how they could recover the state’s money from Siyenza.
The R631-million sanitation tender with Siyenza was terminated when it emerged that tax clearance documents submitted to Misa for a similar project in the Northern Cape had not been issued by the SA Revenue Service. The ADM project was based on the Northern Cape tender using a section of supply chain management regulations which allow a state authority to contract a company participating in a project by another state authority without resubmission of all necessary documents, such as tax clearance certificate.
After discovering that the company had submitted tax documents not issued by SARS, Misa terminated the Northern Cape project.
The termination of both contracts comes after a three-week investigation by the Saturday Dispatch exposed how Siyenza Group was awarded the lucrative tender without following proper supply chain management (SCM) processes.
Some requirements of section 32 of the SCM regulations were not adhered to.
Challenge to cancellation
Mpeluza, in response to a question by the Saturday Dispatch, said that the matter was sub judice.
“The contract was not terminated but was cancelled by Amathole. The matter has been referred for arbitration, therefore Siyenza is not in a position to verify your allegations as the matter is sub judice,” he said.
ADM spokesman Siyabulela Makunga said the municipality had no knowledge as to whether or not the termination of the contract was lawful or not.
“We do, however, find it strange that a party agrees to early termination of a contract and then views the termination as unlawful.”
He added that it had been ADM’s position from the outset that it procured the services of the Siyenza Group for its sanitation programme, under a contract secured by Municipal Infrastructure Support Agent (Misa) in terms of regulation 32.
“It follows then that when Misa and Siyenza by agreement terminated the contract, no further legal basis existed for Siyenza’s continued involvement in the ADM programme.”
Early this month the Saturday Dispatch reported that sub-contractors were disgruntled as they had not yet been paid for work done.
Contractors had also vacated construction sites although 66000 toilets in villages around the municipality had not been completed.
Subsequent to cancelling the contract with the Siyenza Group, the ADM indicated it was now considering recovering some of the monies from the company to ensure contractors are not short-changed.
The contractors alleged that ADM had promised to settle monies owed to them by June 30, but they had not yet received a cent.
“We have not been on site until we get paid as Amathole promised us.
“It’s been about two months since we have been on site,” said a contractor.
However, this was disputed by the municipality.
In an earlier response to the newspaper, Makunga said: “No such undertaking was made to contractors. The ADM understands that certain contractors sub-contracted to Siyenza were not paid and are likely not to be paid now that the ADM engagement with Siyenza has fallen away.”
He said said they were in talks with the Development Bank of Southern Africa and National Treasury to see how they could recover the state’s money from Siyenza.
The R631-million sanitation tender with Siyenza was terminated when it emerged that tax clearance documents submitted to Misa for a similar project in the Northern Cape had not been issued by the SA Revenue Service. The ADM project was based on the Northern Cape tender using a section of supply chain management regulations which allow a state authority to contract a company participating in a project by another state authority without resubmission of all necessary documents, such as tax clearance certificate.
After discovering that the company had submitted tax documents not issued by SARS, Misa terminated the Northern Cape project.
The termination of both contracts comes after a three-week investigation by the Saturday Dispatch exposed how Siyenza Group was awarded the lucrative tender without following proper supply chain management (SCM) processes.
Some requirements of section 32 of the SCM regulations were not adhered to.
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