Why mayor wants Qaba suspended
Explosive report cites economic development boss for tender misconduct
After cancelling the normal tender process, economic development executive director and current acting city manager Anele Qaba has been accused of signing a deviation the very next day that ultimately led to a company being handpicked as a middleman between the Nelson Mandela Bay municipality and SMMEs.
This is among the bombshell allegations made in a leaked PwC forensic report into the city’s contracts with Moximark (Pty) Ltd, trading as SK Business Consultants (SKBC), for the provision of socioeconomic consultancy services.
The allegations have led to mayor Eugene Johnson recommending to the council that Qaba be suspended.
The confidential report was meant to be debated behind closed doors at yesterday’s council meeting, but it was called off at the last minute.
“Due to the gravity of the allegations, the council has reason to believe that the presence of Qaba will jeopardise an investigation into his conduct, may be detrimental to the stability in the municipality, may interfere with potential witnesses, or commit further acts of misconduct,” Johnson said in her report.
A legal opinion by advocate Shaheed Patel on the PwC report found that Qaba, economic development project manager Robert Andries and bid evaluation committee (BEC) chair Wandisile Makwabe should face disciplinary action.
This, Patel said, was for alleged misconduct, alleged financial misconduct, allegedly incurring irregular expenditure and allegedly subjecting the municipality to a material irregularity.
Qaba said violent killings and tensions between the municipality and business owners had led to the decision to deviate from normal processes, while Makwabe declined to comment until he had seen the PwC report.
SK Business Consultants director Sicelo Kubashe said he was not aware of any preference given to his company after it was awarded the contract.
Andries could not be reached for comment.
The municipality dished out a total of R8.2m to the company, while an amount of R11m was unpaid.
According to the PwC report, an expression of interest (EOI) advertised saw 48 companies submitting a bid.
While SK Business Consultants did not submit a bid, Kubashe purchased a tender pack which included details of the work required and background information.
The companies were then whittled down to three, with the tender process almost complete.
However, during a bid adjudication committee meeting on February 4 2020, the expression of interest was cancelled on request by Qaba due to a budget shortfall.
But the PwC report states: “However, on January 16 2020 Qaba signed a motivation in respect of a capital and operating budget virement to transfer R3m for the funding of the socioeconomic consultant to implement an SMME portfolio management project.”
A day after the tender process was cancelled, Qaba signed a deviation that skipped the normal procurement processes to appoint a consultant.
“Therefore, it appears that neither reason put forward for the cancellation of the EOI was valid,” the PwC report states.
It says on February 10 2020, Andries drafted a memorandum seeking the appointment of SK Business Consultants by way of a deviation from the supply chain management process.
On the same day, Qaba signed off on it, along with several officials and ultimately the acting city manager at the time.
The municipality’s accountant then signed confirmation of a budget of R4m.
On February 18 2020, the then acting city manager officially approved the appointment of SK Business Consultants for six months.
“The need for these services was identified during 2019, and therefore no emergency existed and the reason put forward in the application to deviate does not appear justified or valid,” the PwC report states.
“As part of the EOI process, the bid evaluation committee had already recommended service providers, which were identified as being functional to be appointed on an ‘as and when’ required basis to provide these services to the municipality.
“The reason provided for the urgency in the memorandum dated February 5 2020 for the deviation was that ‘due to the urgency and risks posed by the SMMEs it is impractical to follow the normal procurement processes’.
“The reason for the devia
tion does not appear to be plausible as only the approval of the bid adjudication committee and the city manager was required to conclude the supply chain management process that had commenced in 2019 and, as such, there was no urgency requiring that a deviation be obtained.”
According to PwC, it was unclear how SK Business Consultants was identified to be the consultant after three of the companies recommended by the evaluation committee had applied again via the deviation.
One of the companies even submitted a quote for R1.9m, less than half of SK Business Consultants’ R4m.
“We could not determine how or under what circumstances SKBC was identified and provided a proposal,” the PwC report states.
The probe found that SK Business Consultants’ proposal document was undated while its attached presentation was dated November 1 2018.
“Kubashe was also unable to advise how it transpired that SKBC submitted its proposal.
“Andries, however, advised that he was aware of SKBC and their services as they had rendered similar services and had gained the trust of exempted micro enterprises in the municipality.
“He had thus taken the decision to invite SKBC to propose for the services.”
According to the report, with three service providers already recommended by the evaluations committee, it was unclear how or why Andries found it necessary to contact SK Business Consultants.
“Unless the intention was to specially appoint this new service provider.”
The PwC report revealed that Andries had decided that the three companies had limited experience with SMMEs.
“According to [chief financial officer Selwyn] Thys, it was unusual that in one process [the EOI] the three companies were recorded as having met the required criteria and recommended for the award, yet in another similar process, the same companies were deemed non-responsive.
“It is unclear how Andries independently reached this conclusion, whereas the BEC had found that these service providers were compliant and functional and recommended to the BAC [bid adjudication committee] for the award of the same services.”
It was also found that SK Business Consultants did not reference any experience, yet Andries had decided the company met all the requirements.
A month after being appointed, the municipality and SK Business Consultants entered into a fresh service level agreement, this time for a further six-month period.
This was followed by a three-year service level agreement in November 2020 when the municipality called for tenders for a socioeconomic consultant.
Only one bid was received in the form of a joint venture (JV) in the name of Moximark (Pty) Ltd-NMB EDC JV.
Patel, in his legal opinion, found that PwC had picked up discrepancies regarding the possible tampering of the tender document submitted by Moximark.
“Despite the JV bid not having all its required and necessary supporting documents, the chair of the BEC, Wandisile Makwabe, recommended to the BAC that the new tender awarded be made to Moximark (Pty) Ltd-NMB EDC JV for three years at a value of R17.2m.”
The bid adjudication committee then made the same recommendation to the acting city manager.
Qaba, then acting as city manager, concluded the service level agreement with Moximark in the amount of R51m.
“This eliminated the JV partners and approved R34.5m more than the approved tender amount, though Moximark did not submit a bid on its own but rather a joint venture.”
The service level agreement was prepared by Andries and signed off by Qaba.