December 13, 2018


Tshwane suspends dodgy R35m contract

City manager, Jason Ngobeni

City manager, Jason Ngobeni

The City of Tshwane was forced to halt a dodgy contract worth nearly R35 million after irregularity allegations were brought up by Organisation Undoing Tax Abuse (Outa).

The multi-million rand contract was awarded to a company called Tahal SA to undertake a feasibility study on “projects required to fast-track the development of East Capital to realise the required economic growth”.

The tender was awarded under in 2015.

Outa alleged that Tahal SA worked with a bid specification committee appointed by the then city manager, Jason Ngobeni, to develop the terms of reference for the tender in late 2014 or early 2015.

The fact that Tahal SA apparently worked with the committee amounted to irregularity, according to Outa.

After the bid documents were ready, there was a request from the team to reduce the standard period for advertising the tender, granted by Ngobeni.

Mayoral spokesperson Samkelo Mgobozi said the city had decided to suspend the contract pending further investigation.

“Further investigation revealed damning insights and a subsequent invitation to the City of Tshwane to initiate its own investigation which resulted in the City suspending the contract,” Mgobozi said.

The tender was awarded to Tahal SA for three years at a price of R30 664 348 excluding VAT. The VAT would add another R4 293 008. This was despite that the tender specification indicated the contract was for only 10 months.

The tender was for “the identification and packaging of catalytic interventions and projects required to fast-track the development of East Capital to realise the required economic growth”.

This, according to Outa, simply meant that the tender was for the successful bidder to undertake a feasibility study on behalf of the city

An initial tender advert request was drafted with a budget estimate of R8m, according to Outa.

“It’s not clear how the projected cost jumped from R8m to R30m,” the company said in a statement.

Outa’s chief operating officer Ben Theron said: “The involvement of Tahal SA in setting the terms of reference is inexcusable. This led to a corrupt relationship which led to the plundering of state funds.”

Theron questioned how the contract price jump from R8 to R30m “for a job that appears not to be valued at more than R1.5 to R2m”.

He welcomed the city’s response to Outa’s alert.

“Outa is pleased that the City of Tshwane has started investigating and has suspended this contract, and we expect to see further action to hold those responsible for the unnecessary costs to the city,” Theron said.

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