By Thapelo Molefe
The Special Investigating Unit has uncovered what it describes as a clear pattern of contractors being paid before doing any work at the OR Tambo District Municipality, while also raising alarm over a lack of cooperation from the Municipal Manager.
Briefing Parliament’s Standing Committee on Public Accounts (Scopa) in a virtual meeting on Tuesday, SIU Eastern Cape head of investigations Mike Koya said several infrastructure projects revealed the same modus operandi.
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“You can see the same modus operandi here that companies get appointed on the same date and they receive payment on the same date for work that is not being done,” Koya told MPs.
Detailing the construction of the Signal Hill Reservoir, Koya said the municipality used consulting firm GIBB to evaluate the tender, but its recommendation was ignored.
“No plausible explanation was advanced for not considering GIBB report,” he said.
He added that the appointed service provider submitted “an invoice of R12 021 832.00 to Amatola Water Board (AWB) for work done with no supporting documentation.” The invoice was approved and paid through Amatola before the work had been completed.
Although the project was eventually implemented, Koya confirmed: “This money was paid even before the work was done.”
The matter is already the subject of criminal investigations by the Hawks under Mthatha and Cambridge in East London case numbers registered in 2020.
In the Mhlontlo Cluster 1 pump installation project, Koya gave further detail about how the contract was handled.
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“The company called Tyeks plant was hired and was appointed to install pumps on three sites. Tyeks only installed on one site and was paid 7.2 million,” he said.
He told MPs that in July 2019 Tyeks was “forced to cede the other two pumps or the other two services to two companies called Valotone and Phoenix,” and that the instruction came from consulting engineers Zinzame.
“I’m saying chairperson they were forced because the tender was awarded to them and when they tried to complain unfortunately the former Municipal Manager, which is the deceased councillor Owen Hlazo, is the one who intimidated Tyeks to cede those projects to these two companies,” Koya said.
He added that the SIU found the appointment of Valotone and Phoenix to have been irregular.
“Valotone and Phoenix submitted invoices before the work was done and these invoices were approved by Zinzame who was the consulting engineers and payment was done,” he said.
Koya said the work was only carried out after the SIU stepped in.
“The service providers did perform the work, but they only performed the work after we had started our investigation once they saw that there was an investigation ongoing then they started to go and install those pumps but that doesn’t take away the fact that payments there were done even before work was done.”
The SIU is preparing to approach the Special Tribunal to recover about R3.1 million.
“We want to recover 3.1 million from the two service providers. It is our view that because the appointment of Valotone and Phoenix was irregular if not fraudulent,” Koya said.
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He added that the unit is analysing disciplinary referrals against three OR Tambo officials and will first give them a right of reply. The Hawks are already investigating the matter and the cases are before court.
Under a separate 2022 proclamation, the SIU is also pursuing civil litigation to recover about R54.1 million linked to payments made to the Ayavelisa Consortium. Koya said the team is preparing evidence “to set the contract aside and for the possible recovery of about R54.1 million.”
Beyond the financial irregularities, Koya told MPs that investigators are facing resistance from within the municipality.
“Municipal Manager is not available to discuss the findings and has not been responsive to our requests to meet,” he said.
He further noted serious document management failures.
“Documents are said to be with DPCI and DPCI says it returned them and no one can account on the whereabouts of the documents,” Koya told the committee.
The SIU has since sought intervention from the provincial Department of Cooperative Governance after receiving no response to requests for information, including documents linked to an anonymous whistleblower’s claims that 13 companies awarded tenders are connected to senior municipal officials.
Acting SIU head Leonard Lekgetho said the unit is also reviewing its legislative powers.
“We are busy looking at our legislation so that we can have the powers to subpoena for documents even before the proclamation is issued,” he said.
The SIU expects to finalise most of the outstanding investigations by the end of June.