Explosive claims of tender rigging, fraud in contract

Forensic report part of two probes into corruption

ON the very day that Milongani Eco-Consulting signed its tender deal with the Nelson Mandela Bay municipality in 2015, it handed the city an invoice for more than R1-million for environmental upgrades.

The company, which was meant to charge the municipality R350 an hour, would have had to work 3 116 hours in one day to get to that figure.

This was the start of what proved to be another municipal cash cow through which about R25.6-million of ratepayers’ money was funnelled.

Explosive allegations of tender rigging, fraud and collusion are contained in the forensic report of PricewaterhouseCoopers (PwC) on the metro’s contract with Milongani for environmental management services.

It forms part of two probes by the Hawks into alleged corruption in the public health department.

The other involves the alleged irregular recruitment of litter pickers for a War on Waste project.

Mayor Athol Trollip called for a probe into the projects in March last year after allegations of irregularities.

He also ordered the month before that payments to the company be stopped.

Hawks spokeswoman Captain Anelisa Feni said the Milongani case was under investigation and no further information would be released yet.

The report, meanwhile, reveals that about R18.5-million of the total paid to Milongani under the guise of “waste diversion and beneficiation” was actually for the salaries of six interns and a retired metro employee, Riaan le Roux, who was hired as a consultant and paid through Milongani.

But the salaries paid to the staff over 16 months actually amounted to R1.3-million, according to the report.

The officials fingered in the report are environmental services director Joram Mkosana, project manager Thabo Williams, former executive director Andile Tolom and then acting waste management director Nkosinathi Dolo.

All four are on suspension, while the laptops and cellphones of Mkosana, Williams and Dolo were confiscated during a raid at their homes in April last year.

PwC reports that out of the 14 companies that tendered for the contract, Milongani was awarded two parts of a three-part contract.

Some of the work was then subcontracted to one of the companies that also tendered but lost out because it had scored too low during the bid specifications process – CEN IEM Unit CC (CEN).

CEN had long done work for the municipality, but scored zero for functionality, the report says.

It says a municipal official who sits on the bid specifications committee (BSC) believed her scores might have been tampered with as she could not understand why she would score CEN zero, a company she had dealt with before.

Other committee members could also not explain their scores.

The report states that despite CEN’s low scoring, Milongani sub-contracted eight of its projects to the company with the knowledge of both Mkosana and Williams.

In fact, CEN managing member Michael Cohen told PwC investigators that Mkosana had told him, even before the tender was awarded, that a BEE company would be appointed and CEN would sub-contract some of the projects. The municipality was supposed to give Milongani written permission to take on a sub-contractor, but did not.

Milongani was officially appointed in a letter signed by then city manager Mpilo Mbambisa on July 28 2015, for an R18-million three-year contract.

Since then, a total of 43 payments had been made to the company for invoices dated July 30 2015 to February 22 2017, totalling R25.6-million.

The report says: “For none of the 42 invoices (one invoice not provided) reviewed are there any indications by Milongani of the number of hours worked against the agreed hourly rate, ie R350 per hour ...

“[An invoice] was issued by Milongani on 30 July 2015 for R1 090 600 for design and implementation of the environmental upgrade in Ward 30. A letter of award was issued on 28 July 2015 and a contract form/rendering of services was signed by Milongani on 30 July 2015.

“This invoice was issued the same day Milongani accepted the award.

“The invoice was loaded by Mr Williams, payment was approved by Mr Mkosana on 31 July 2015.”

The report says almost all of Milongani’s invoices to the municipality were manufactured by Mkosana and an intern, Vuyokazi Bazi.

“Dr Cohen advised that he was requested by Mr Mkosana to provide invoices for work performed for Milongani directly to him and not directly to the project managers.

“Ms Bazi advised that Mr Mkosana provided her with a template of Milongani’s invoice, and she would then insert the invoice amounts received from CEN to generate the Milongani invoice which would include a 15% additional fee.”

Bazi claimed she would have to request proposals for projects from CEN, which would be altered by Mkosana or Williams to include the management fee.

“Ms Bazi confirmed that, in her view, she performed all the day-to-day functions required by a lead consultant. These functions were not performed by Milongani.”

Contacted for comment, Bazi said she was on maternity leave and not in a position to answer the questions.

Attempts to reach Mkosana and Williams for comment were unsuccessful. Williams was not at his home. A Herald reporter left a note with contact details with his neighbour, who phoned Williams and his girlfriend informing them that journalists were looking for him.

Dolo said he had never done any work with or for Milongani and had never met or been in any of the company’s meetings.

Tolom said: “I cannot comment on the allegations or questions despite the fact that I deny any wrongdoing.”

Samwu regional spokesman Mqondisi Nodongwe, who is representing Mkosana, Williams, Tolom and Dolo at their disciplinary hearing, said it had been meant to start soon but was delayed by the municipality hiring a top lawyer to represent the city.

“The municipality can’t just unilaterally make a decision to use a lawyer,” Nodongwe said.

“The clause says you appoint an employee representative who is two levels above the person being charged and this applies for the presiding officer as well.”

‘ This invoice was issued the day Milongani accepted the award