The KwaZulu-Natal Department of Cooperative Governance and Traditional Affairs (CoGTA) has demanded answers from the eThekwini municipality after the Constitutional Court outrightly rejected the metro’s attempt to appeal the Pholobas Projects case, in which it now has to pay around R52-million despite no work being done.
In a letter seen by Sunday World, dated June 9, CoGTA’s MEC, Reverend Thulasizwe Buthelezi, gave Mayor Cyril Xaba and City Manager Musa Mbhele seven days to provide him with a report on how they plan to resolve the matter.
Unlawfully cancelled 2013 tender
The Pholobas Projects case started in 2013 when the company won a tender with the electricity department. A few months later, the tender was unlawfully cancelled by some officials at the time, sparking a fierce legal battle.
The municipality first made an offer to compensate the company with R30-million, but later reneged on the deal. The company took the matter to the Durban High Court and won. Later, the badly managed metro took the matter to the Supreme Court of Appeal (SCA), where it also lost.
In a last-ditch attempt, it took it to the Constitutional Court. The ConCourt also dismissed it, saying it has no prospects of success.
The appeal was dismissed without even having an open hearing.
Now Buthelezi wants answers. He says the law obliges the accounting officer to ensure that disciplinary actions or, when appropriate, criminal proceedings, are instituted against any official of the municipality who has allegedly committed an act of financial misconduct or an offence in terms of Chapter 15 of the Municipal Finance Management Act (MFMA).
MFMA clauses violated
He added that Section 171(4) of the MFMA provides that the municipality must investigate allegations of financial misconduct against the accounting officer and other senior officials of the municipality and, where appropriate, to institute disciplinary proceedings against such officials.
“Accordingly, a report is requested within a period of seven (7) days, providing the total contractual losses suffered and the total legal costs incurred by the city in defending this matter, which proceeded to the Constitutional Court and was dismissed with costs.
“Such report should further clearly indicate what disciplinary actions are to be taken by the City. The Report must provide detail on what oversight the council exercised in deciding to embark on reckless and costly litigation.
“My request is based on the requirements for notification in terms of Section 32 of the MFMA. Constitutional monitoring and oversight responsibilities and the need to ensure accountability. And also consequence management given the prejudicial position that the City has faced. Kindly respond within seven (7) days of receipt of this letter,” reads part of Buthelezi’s letter to Xaba.
Mayor’s office responds
Xaba’s spokesperson, Mluleki Mntungwa, said the mayor has already publicly addressed the matter. He was referring to a statement dated June 6, where he said he respects the decision of the apex court.
In that statement, Xaba added that where consequence management or recovery of state resources is recommended, such will be applied without fear or favour.
“This is an effective way of rooting out collusive corruption and other malfeasances,” he said.
