City contract is irregular – AG

TSHWANE: CITY MANAGER TOOK TOTAL CONTROL OF IT

Over R455m paid to GladAfrica since August 2017, apparently illegally.

Makwetu will rule that the expenditure on the contract was irregular (unlawful). GladAfrica has received payments of over R455 million from the city since August 2017.

Mosola took “total control”

According to the AG’s preliminary findings, Mosola took total control of the procurement process that led to GladAfrica’s appointment.

He initiated the process, determined the project management unit’s demands and approved the process to be followed. This should have been done by the supply chain management department.

In his preliminary report, Makwetu said the concentration of duties contravenes the applicable law and best practice of separating duties in supply chain management. This is “to minimise the likelihood of fraud, corruption, favouritism and unfair and irregular practices” as stipulated in the Municipal Finance Management Act.

Tshwane appointed Ariya Project Management (GladAfrica) on November 3, 2017. Makwetu found some payments were made to another GladAfrica entity, GladAfrica Consulting Engineers, without a valid contract and before GladAfrica Project Management had been appointed.

‘Piggy back’ procurement

The contract Tshwane entered into on November 3 was procured on the basis of paragraph 32 of the Municipal Supply Chain Management Regulations, which provide for an organ of state to “piggy back” on the procurement process of another organ of state to procure the same goods/services.

The city got permission from the Development Bank of Southern Africa (DBSA) to “piggy back” on its procurement process to appoint a panel of companies to assist with infrastructure projects’ roll-out. The panel companies were supposed to submit quotations to Tshwane for the work. This bypasses the city, preventing it from following its own competitive procurement process. This is only permissible with demonstrable discounts or benefits, which the AG said the city didn’t show.

The AG found the city’s executive adjudication committee resolved all 29 service providers on the panel should be invited to submit quotations, but the city selected only six, including Ariya Project Management, GladAfrica’s predecessor. This rendered the process unfair and inequitable. Once the GladAfrica agreement was concluded, the terms and conditions differed so much from the DBSA agreement that it fell outside the scope of paragraph 32, the AG found.