Bankrupt municipality appoints Eskom to electrify villages without following bidding processes

A bankrupt Limpopo municipality has made a bizarre decision to fire a company that would spend only R500 000 to electrify homes in a village and has replaced it with Eskom, which will cost the municipality R9.8 million.

Suspended Fetakgomo Tubatse municipal manager, Patience Busane, appointed Eskom without following any bidding processes and without any court order to terminate electrical engineering company Mphaphuli Consulting (Pty) Ltd’s existing contract in November 2018.

Eskom was appointed to complete the electrification of seven villages that Mphaphuli had been working on as part of its R326 million Operation Mabone Project – the contract to electrify 13 500 homes in 24 villages.

Eskom will now take over the job on the seven villages for an astronomical R51.9 million.

What is bizarre about the decision is that Mphaphuli Consulting had done 95% of the job to electrify Praktiseer Extension 3 for R26.7 million and was only left with work worth R500 000 to be finished over two weeks when Eskom was appointed.

Eskom was appointed to finish the project at R9.3 million more for a period of six months.

The Fetakgomo Tubatse Local Municipality is in dire financial straits for having taken reckless financial decisions over the past few years, one of which was investing and then losing R245 million in the controversial VBS Mutual Bank.

Limpopo Premier Stanley Mathabatha and his Cabinet placed the municipality in the platinum-mining town of Burgersfort under administration in November because it was under huge financial pressure.

For about a year, it is alleged that the council and its senior managers have been searching for any loophole to terminate Mphaphuli Consulting’s contract.

Fetakgomo Tubatse’s spokesperson, Thabiso Mokoena, did not respond to written questions by City Press.

Mphaphuli Consulting was awarded the Operation Mabone tender in 2013, but as part of the sustained pressure to leave the contract, it has had to go the legal route many times following the municipality’s reluctance to pay it for work done.

In December 2017, the company obtained a court order to attach the municipality’s properties in order to recover R41 million that it was owed.

The company is now opposing the Special Investigation Unit’s (SIU) attempt to terminate its contract in court.

Mphaphuli Consulting’s director, Lufuno Mphaphuli, ascribed the SIU’s action to the ongoing attempts to see his company out of the contract.

The SIU served Mphaphuli with a notice of investigation on April 5 2017, but that notice was based on a Presidential Proclamation to investigate maladministration in the municipality, which did not involve the company.

Papers filed at the High Court in Polokwane show Mphaphuli is challenging Eskom’s appointment arguing that the state-owned enterprise’s appointment was irrational.

He says that Busane took advantage of the SIU’s investigation on his company to negotiate with Eskom and conclude the appointment.

“The appointment of [Eskom] was concealed to the applicant (Mphaphuli) and the overall public. It was carried out in a manner that is not authorised in terms of the procurement policies of [the municipality]. The appointment is also manifestly irrational to the extent that it purports to appoint a service provider for services already allocated to another service provider,” Mphaphuli said in his founding affidavit.

Eskom’s spokesperson, Khulu Phasiwe, said: “The matter is now before the court of law, and Eskom is not in a position to make any comments on this matter outside of the court process.”

Not the first double appointment

In December 2015, former municipal manager Johannes Mohlala awarded a R14 million tender for the design, installation and management of 40 high-mast lights to Volt Consulting Engineers, even though the same tender had been awarded to another company, Bawelile Consulting Engineers, in January 2014 by his predecessor, Adelaide Monyepao, who was acting in the position.

Bawelile Consulting Engineers applied for and was granted an interdict by the Polokwane High Court in April 2016, prohibiting the municipality from entering into a new service-level agreement with Volt Consulting Engineers.

The order also interdicted the municipality from paying Volt, but despite this interdict, the municipality and Volt continued working on the project and Volt was paid R8.5 million before any work was done.

In December 2016, Bawelile Consulting Engineers obtained a final interdict that reviewed and set aside the service level agreement.