By Levy Masiteng
Thulasizwe Buthelezi, the MEC for Cooperative Governance and Traditional Affairs, has issued a letter to the eThekwini Municipality, demanding a comprehensive breakdown of costs associated with the legal dispute involving Daily Double Trading.
In the correspondence, Buthelezi criticized the municipality’s expenditure, particularly concerning litigation, as imprudent.
The legal dispute arose when the municipality terminated its contract with Daily Double Trading, prompting the company to contest the decision.
Subsequently, an out-of-court settlement was agreed upon for R30 million.
However, the municipality later disputed the validity of the settlement, citing improper authorization by the responsible official.
Recently, the Constitutional Court ruled in favor of Daily Double Trading, holding the municipality accountable for R53 million, comprising the original R30 million debt plus an additional R23 million in interest.
Buthelezi’s letter stipulates a seven-day deadline for the municipality to submit a detailed report outlining total contractual losses incurred and the entirety of legal expenses accrued in defending this case.
“Such a report should also clearly indicate what disciplinary action is being taken by the City. Furthermore, it must outline the oversight taken by the council in embarking on this reckless and costly litigation,” he said.
Meanwhile, eThekwini Mayor Cyril Xaba has warned that the municipality’s failure to properly monitor contracts reflects weak governance, adding that he suspects collusive corruption within the City’s administration.
Xaba made these remarks during a meeting of the Executive Committee (Exco) on Tuesday, where he stressed the urgent need to strengthen contract management controls.
“I do not know who benefits from this, but I suspect collusive corruption in the process,” Xaba said.
“We have to put a stop to this. We must be able to monitor contracts.”
His concerns were echoed by other municipal leaders, including Deputy Mayor Councillor Zandile Myeni, who called for heads of departments to be held accountable for such lapses.
Democratic Alliance Exco member André Beetge also raised alarm, calling for greater scrutiny of the City’s budgeting processes to ensure that performance indicators and service delivery targets are being met.
The recent Constitutional Court ruling is reportedly not the only costly legal dispute facing the municipality. Two additional cases have further strained its finances.
These include a claim by Solbeth Security and Risk Management Services, with the City reportedly owing over R413 million for security services rendered to senior officials.
In another case, Bless Joe Trading is claiming R73 million for the supply of tents and ablution facilities during flood relief efforts. However, the municipality is contesting the amount, arguing it exceeds market-related rates.
Xaba said these mounting legal and financial challenges have prompted the City to urgently review and strengthen its contract management systems.
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