The Bhisho government has sanctioned a probe into cash-strapped Amahlathi Municipality’s “irregular” purchase of plant machinery worth R95-million.
This was revealed to the provincial legislature by cooperative governance and traditional affairs MEC Fikile Xasa at a house sitting last week.
Xasa was giving oral replies to questions raised by DA MPL Nokonwaba Matikinca, who wanted to know what the province was doing concerning the alleged “irregular purchase” of such machinery at Amahlathi.
Xasa said his office had already assigned investigators to look into the matter, and their terms of reference had already been approved by his office.
The MEC said the investigators began their work on March 1 and will submit a report to his office once the probe is complete.
“Purchase of this plant machinery is amongst issues that are receiving attention from us,” Xasa said.
He could not be reached to elaborate yesterday, but Cogta superintendent-general Stanley Khanyile yesterday said the team comprised investigators from the department’s head office based in Bhisho.
Xasa’s probe comes months after the rural municipality, with an annual budget of just over R180-million, bought 13 roadworks machines from Tsolo-based businessman Mcebisi Mlonzi last April.
The cash value of the machinery was R40-million, but through a hire purchase deal the municipality entered with Mlonzi, the value escalated to just over R95-million.
In May last year, Daily Dispatch reported that 13 brand new roadworks machines were standing idle and unguarded in the middle of Stutterheim, where the municipality headquarters are based.
It was also reported the deal was signed when CFO Joyce Ntshinga was on bereavement notice, with the official acting in her capacity, Bennie Cilliers, allegedly bullied and threatened into signing off the first payment of R8.9-million.
At the time, Cilliers wrote to municipal manager Balisa Socikwa informing him that no council resolution existed to authorise the deal; that the budget made no provision to operate such a large plant and that supply chain management processes were not followed.
Despite this and the non-compliance with the Municipal Finance Act, Cilliers was allegedly instructed to authorise the payment, it was reported.
Municipal authorities at the time confirmed the deal never went through proper supply chain processes.
What also raised eyebrows was that invoice number 100079 from Mlonzi’s Laman Financial Services demanding R501657 was dated March 31 2014, despite the deal only being signed on April 1 2014.
It was also reported that, already on April 7 2014, with the deal only six days old, Laman’s Johannesburg attorneys wrote Amahlathi a letter of demand for a R10.3-million payment.
Both Socikwa and Amahlathi mayor Mncekeleli Peter could not be reached for comment yesterday.
Amahlathi was not the only financially strained provincial municipality to have entered into such a deal with Laman.
Ngqushwa, Port St Johns and Mbhashe are among other councils that have entered into such multi-million rand deals over the past year.
In Ngqushwa, municipal manager Vuyo Mbelani was suspended late last year by council for, among other issues, going ahead with such a purchase.
In Mbhashe, the purchase of such machinery was halted last month after opposition parties interdicted the process at the Mthatha High Court. — asandan@dispatch.co.za
Municipality to be probed
This was revealed to the provincial legislature by cooperative governance and traditional affairs MEC Fikile Xasa at a house sitting last week.
Xasa was giving oral replies to questions raised by DA MPL Nokonwaba Matikinca, who wanted to know what the province was doing concerning the alleged “irregular purchase” of such machinery at Amahlathi.
Xasa said his office had already assigned investigators to look into the matter, and their terms of reference had already been approved by his office.
The MEC said the investigators began their work on March 1 and will submit a report to his office once the probe is complete.
“Purchase of this plant machinery is amongst issues that are receiving attention from us,” Xasa said.
He could not be reached to elaborate yesterday, but Cogta superintendent-general Stanley Khanyile yesterday said the team comprised investigators from the department’s head office based in Bhisho.
Xasa’s probe comes months after the rural municipality, with an annual budget of just over R180-million, bought 13 roadworks machines from Tsolo-based businessman Mcebisi Mlonzi last April.
The cash value of the machinery was R40-million, but through a hire purchase deal the municipality entered with Mlonzi, the value escalated to just over R95-million.
In May last year, Daily Dispatch reported that 13 brand new roadworks machines were standing idle and unguarded in the middle of Stutterheim, where the municipality headquarters are based.
It was also reported the deal was signed when CFO Joyce Ntshinga was on bereavement notice, with the official acting in her capacity, Bennie Cilliers, allegedly bullied and threatened into signing off the first payment of R8.9-million.
At the time, Cilliers wrote to municipal manager Balisa Socikwa informing him that no council resolution existed to authorise the deal; that the budget made no provision to operate such a large plant and that supply chain management processes were not followed.
Despite this and the non-compliance with the Municipal Finance Act, Cilliers was allegedly instructed to authorise the payment, it was reported.
Municipal authorities at the time confirmed the deal never went through proper supply chain processes.
What also raised eyebrows was that invoice number 100079 from Mlonzi’s Laman Financial Services demanding R501657 was dated March 31 2014, despite the deal only being signed on April 1 2014.
It was also reported that, already on April 7 2014, with the deal only six days old, Laman’s Johannesburg attorneys wrote Amahlathi a letter of demand for a R10.3-million payment.
Both Socikwa and Amahlathi mayor Mncekeleli Peter could not be reached for comment yesterday.
Amahlathi was not the only financially strained provincial municipality to have entered into such a deal with Laman.
Ngqushwa, Port St Johns and Mbhashe are among other councils that have entered into such multi-million rand deals over the past year.
In Ngqushwa, municipal manager Vuyo Mbelani was suspended late last year by council for, among other issues, going ahead with such a purchase.
In Mbhashe, the purchase of such machinery was halted last month after opposition parties interdicted the process at the Mthatha High Court. — asandan@dispatch.co.za
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