SIU welcomes ConCourt dismissal of Mphaphuli Consulting appeal

The Special Investigating Unit (SIU) has welcomed a Constitutional Court judgment dismissing an application to appeal a High Court order bid by engineering company Mphaphuli Consulting to have the unit’s report on Operation Mabone reviewed and set aside.

In 2013, the Greater Tubatse Local Municipality (now Fetakgomo Tubatse Municipality) gave the company a contract to connect at least 13,000 houses to the grid. The contract was  worth some R168.8-million.

Overcharged municipality by at least R73m

An investigation by the SIU found that the company – owned by Lufuno Mphaphuli – allegedly overcharged the municipality by at least R73-million. This after costs skyrocketed as the municipality twice amended the contract. This brought the total number of houses to be electrified to 19,000, at a cost of at least R326 million.

“In the judgment dated 3 June 2024, the Constitutional Court states that it ‘considered the application for condonation and application for leave to appeal. [It] has concluded that the application for leave does not engage its jurisdiction. Consequently, leave to appeal must be refused with costs. And the Court need not decide the application for condonation’.

SIU to recover the R73m

“The SIU welcomes the decision of the Constitutional Court.  [The decision] now settles the question of whether the SIU was empowered to investigate the electrification of villages under Greater Tubatse Municipality. And it paves the way for the civil claim against the engineering company. This to recover approximately R76-million to commence in the Limpopo High Court,” the SIU said.

The corruption-busting unit explained that in its investigation, it was found that the municipality had “piggybacked on an existing contract”. The said contract was between Mphaphuli Consulting and Vhembe District Municipality to electrify villages.

Terms of the contract changed

“However, the terms of the contract were changed to increase the pricing of the services than what was charged in Vhembe. This resulted in an overpayment of approximately R76-million. The SIU instituted a civil claim in 2017 in the Limpopo High Court to recover financial losses. These are losses suffered by the Municipality following the conclusion of its investigation.

High Court had earlier dismissed the application

“In response, Mphaphuli Consulting brought an application to review and set aside the SIU report. To also seek an order compelling the SIU to stop all steps taken against the engineering company. [The steps] emanated from the SIU’s investigation.

“In March 2022, the Limpopo High Court dismissed the application with costs.  The Supreme Court of Appeal dismissed the application with costs in August 2023. And now the apex court has also dismissed it with costs. The SIU will start the process of pursuing the legal fees it is owed by Mphaphuli Consulting. These fees are for these court proceedings and other related legal processes,” the unit said.


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