Metro sues to recoup bus system millions
Municipality guns for businessman, as well as current and former city bosses
THE Nelson Mandela Bay Municipality is going after Port Elizabeth businessman Fareed Fakir and seven of the city’s current and former bosses in the first tangible action against those implicated in the chaotic, money-guzzling bus system.
The municipality wants the Port Elizabeth High Court to set aside approvals and three payments to Fakir’s company, Erastyle, in 2014 and last year, totalling about R7.6-million.
It believes the payments, ultimately approved by former city manager Mpilo Mbambisa, were irregular and unlawful as no tender processes were followed.
Acting city manager Johann Mettler, who instituted the legal action on behalf of the metro, does not believe that Erastyle provided services to the value of R7.6-million, and wants every cent paid back.
The metro is taking Erastyle, Mbambisa, chief financial officer Trevor Harper, chief operating officer Mzwakhe Clay and infrastructure and engineering executive director Walter Shaidi to court.
It is also going after former Integrated Public Transport System (IPTS) boss Mhleli Tshamase, former acting city manager Mamisa Chabula-Nxiweni, and former communications director Roland Williams.
The money was paid out for the development of a marketing strategy for the stagnant IPTS as well as branding for the 20 Years of Freedom celebrations.
The case follows a large-scale probe by the national Treasury into expenditure on one of the metro’s biggest and costliest projects.
The court papers state that the council was only made aware of the alleged irregular appointment of and unlawful payments to Erastyle through the Treasury’s investigative report, given to mayor Danny Jordaan in August.
The papers detail how Tshamase relentlessly pushed to ensure that Fakir’s company benefited from a R6-million marketing contract.
This was despite acting chief financial officer Barbara de Scande insisting that the contract go through the normal tender processes.
Tshamase asked the city to bypass the supply chain management process and appoint Erastyle Pty (Ltd).
However, De Scande sent the memorandum back, saying it could not be supported by her and that he should “follow the 14-day tender process”.
Chabula-Nxiweni, who was acting city manager at the time while Mbambisa was on leave, also did not ap- prove the deviation initially.
Tshamase then submitted another letter asking her to reconsider her decision as it would “neither be practical nor lawful” to advertise the tender as suggested by De Scande.
Chabula-Nxiweni approved his request and also signed on behalf of the acting chief financial officer.
The court papers state that Chabula-Nxiweni signed as chief financial officer, a post which she “did not and could not hold”.
An amount of R5.263-million was paid to Erastyle in May, approved by both Harper and Mbambisa.
Meanwhile, Fakir’s company was also paid about R1.39-million for 20 Years of Freedom branding in 2014, which did not go through the city’s tender processes. Instead, the metro used an existing contract with
Erastyle for the branding.
The papers said Williams and Clay “unlawfully and intentionally, alternatively negligently, misrepresented to the [municipality]” that they could legally lift the limit of an existing contract without following proper tender procedures.
The city wants to hold them liable for the R1.39-million paid to Erastyle for the 20 Years of Freedom branding.
Eight days before Erastyle was paid for the branding, it submitted another invoice totalling R984 197 for the IPTS Marketing Plan.
This was in relation to the Splash Festival, where Erastyle had “performed and rendered the services as required”.
Shaidi is said to have approved and recommended Erastyle be paid the R984 197. It was signed off by Harper and Mbambisa.
The municipality wants all the payment approvals set aside and that Erastyle, Mbambisa, Harper, Chabula-Nxiweni and Tshamase all be held liable for all three payments, totalling R7.6-million.
The metro wants Williams and Clay to be included in being held liable for the R1.39-million, and that Shaidi only be included in the claim for the R984 197.
Mettler said he was obliged to recover money owed to the municipality.
Asked why only some municipal staff were suspended in connection with the Treasury report while others were not, Mettler said: “It would be improper and unfair to comment in the media about disciplinary matters presently being conducted or investigated by the municipality against its employees, who report directly to me, and I therefore refrain from doing so.
“However, I assure the citizens of our metro that the municipality will vigorously and, without fear or favour, pursue any party who has caused the municipality loss.”