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The City of Ekurhuleni is building what might well be the country’s most expensive 12 guardhouses in public libraries and parks – costing taxpayers R320 800 each – to boost the bottom line of emerging entrepreneurs.
A senior official at the metro, who asked not to be named, queried the amount being spent on these guardhouses and said that some of his colleagues warned the metro that the young entrepreneurs were being set up for failure. “Who would want to hire such an expensive builder?” he asked.
Guardhouses are used by security guards for shelter.
Metro spokesperson Themba Gadebe said the tender was advertised for the construction of guardhouses at 12 different libraries, at a total cost of R3 849 633.
In February, the Bid Adjudication Committee rejected recommendations to appoint service providers, on the basis that the prices were “unreasonably high and not market related”.
Consequently, the contract was not awarded.
Gadebe said the metro then decided to use its own Expanded Public Works Programme, known as Vuk’uphile (Arise and live), to construct the guardhouses.
A quantity surveyor, appointed to assist with the bill of quantities, confirmed that the job was allocated to 12 emerging contractors from the metro’s public works programme “as part of the exit programme of completing their three-year learnership training”.
Gadebe said that each guardhouse building cost the metro R320 800, excluding VAT. He added that the costs complied with the requirements of the department of public works for Vuk’uphile contractors.
“The building covers a total of 38.25 square metres, including the canopy or roof. This amounts to R8 387 a square metre,” said Gadebe.
“This cost was tested in the open market through a publicly advertised tender as well as the cost estimate of an independent quantity surveyor.”
Asked why the metro agreed to pay so much for the structure, which is almost equal in size to a house built to reconstruction and development programme standards – about 40 square metres, and considerably cheaper at R53 000 (including a builder’s profit) – Gadebe said this was to ensure that the emerging contractors “did not work at a loss but had to make a minimum profit of 15%”.
According to Absa’s residential building statistics for 2016, compiled by Absa Home Loans property analyst Jacques du Toit, the average building cost of new housing units amounted to R6 185 a square metre in 2015 – which was 6.2% higher than the cost of R5 825 a square metre in 2014.
Although the increase in building costs was down on the double-digit annual growth in 2013 and 2014, it remained above the average headline consumer price inflation rate of 4.6% in 2015, wrote Du Toit.
The municipality’s senior official told City Press: “Most of them [contractors] would then expect the municipality to always provide contracts that exploit municipal resources to sustain the unrealistic expectations.”
Councillor Izak Berg, chairperson of the Independent Ratepayers’ Association of SA, said the metro was giving jobs to amateurs who did not follow contract specifications and that the work was not up to standard.
He said it was unfortunate that a development programme with good intentions was being misused to bleed taxpayers.
Berg added that the guardhouse saga was similar to the R69 000 security-related renovations conducted on the house of Ekurhuleni’s executive mayor, Mondli Gungubele, where prices were exaggerated and unrelated security features charged to the metro.
Documentary evidence forwarded to City Press shows that the metro solicited three quotations from businesses that belonged to, or were partially owned by, the same contractor who fixed the mayor’s house.
Gadebe acknowledged to City Press that they “have discovered that there were irregularities in relation to the selection process of the contractor” by the metro.
“These matters are being dealt with internally, including through investigations,” he said.
Gadebe said that following a security risk assessment in the mayor’s residence, features requiring an upgrade were noted. This led to minor repairs being done to the guardhouse, along with improvements to the exterior lighting, the automation of garage doors and improving access to the residence.
This work took place in August, said Gadebe.
Berg countered that upgrades such as the automation of garage doors had nothing to do with security and should be paid for by the mayor.
“There is proof that fraud and corruption took place by contravening the supply chain management policy. The same contractor has been doing this for years with other quotations. Why was it not checked?” said Berg.
He said it was ratepayers’ money that was being stolen, adding that he hoped the public would make sure that the mayor paid it back.
“If not, he should suffer in the upcoming local elections,” said Berg.
