A company which over-charged Buffalo City Metro by more than R7.9m when it was hired to buy black bags on behalf of the municipality will have to pay back the money.
SIU national deputy head Caroline Mampuru revealed this before members of the portfolio committee of the office of the premier in Bhisho on Tuesday.
Mampuru said they had also asked the National Prosecuting Authority (NPA) to investigate five BCM officials for fraud in connection with the black bags contract.
The investigation followed a Daily Dispatch exposé in 2014 which revealed gross irregularities with a R17m black bag BCM deal.
The three-year contract was awarded to Masiqhame Trading, a company owned by Cuan Surren Metune, son of former BCM employee and pastor Fabian Metune.
The Dispatch revealed that on exactly the same day, June 29 2012, an order for bags worth R1.1m was made, invoices amounting to just over R1m were submitted and payments to the supplier were all made.
To add to the controversy, this was six days before the supplier signed a letter accepting the job.
Former president Jacob Zuma signed a proclamation in October 2015 for the SIU to conduct an investigation.
Mampuru said the investigation was complete, and that “the state attorney has been briefed to institute civil action for the recovery of R7.9m” from the service provider who overcharged the municipality for the refuse bags.
“A further five fraud cases have been referred to the NPA,” she added.
“There are four disciplinary referrals and five fraud cases.”
Mampuru’s three-member team from Pretoria included the SIU’s Jane Schmidt and Mike Kaya.
The team announced on Tuesday that four other Eastern Cape municipalities were under investigation after almost half a billion rands were paid for hiring yellow fleet equipment from a company that did not even own the machinery.
Alfred Nzo municipality in Mbizana procured equipment to the sum of R218m in two batches for road construction. The contract stated that the deal was a rent-to-buy.
The Dispatch can reveal the SIU instituted another investigation in April 2017, and that the Hawks have arrested nine people.
Mampuru said there was potential to recover R123m in this case and a contract worth R2.5m had been shelved, saving millions more.
Other related investigations are:
In Mbashe, where the municipality spent R72.9m for road-building equipment;
In Amahlathi, where civil action has been launched to recover R92.4m from the same service provider, and R15m worth of the contract had been cancelled. Mampuru said payment in this case was R107m.
In the newly established Raymond Mhlaba municipality in Alice, where yellow fleet machinery worth R41.3m was hired “using incorrect application of the Municipal Finance Management Act”.
The SIU called on the legislature committee, chaired by Sicelo Gqobana, to assist them.
DA MPL Edmund van Vuuren wanted to know if other municipalities had been informed about this unnamed company, concerned that it was likely to mislead other municipalities using the same tactics.
Gqobana said the best way to make members of the public aware of it was when the SIU made its reports available to eliminate further misuse of taxpayers’ money...