23-04-2025
Questions raised over R8.2m job awarded by municipality to business consultants
The Nelson Mandela Bay municipality wants to recover R8.2m paid to SK Business Consultants between 2020 and 2021, as the metro cannot verify whether it received value for money.
SK Business Consultants (SKBC) was appointed as a middleman between the city and small, medium and micro enterprises.
The normal tender process was cancelled and a deviation was signed the next day, resulting in the company being hand-picked for the job.
The job was initially meant to be for six months, but after the deviation, it was extended to 12 months.
A report presented to the municipal public accounts committee (Mpac) on Thursday stated that SKBC's appointment was recorded as an invalid deviation.
'With the contentious nature of any contracts involving SMMEs, as well as a value of more than R4m attached to this project, it is expected that management would want to promote a fair, transparent procurement process,' the report says.
'The proposals were specifically requested from three relevant service providers and a recommendation based on the requirements to fulfil SMME demands could be interpreted as the institution being held at ransom to enter into this contract.
'The real or perceived threat to officials' lives is unfortunate, but these criminal acts should not be grounds for dispensing with competitive bidding processes and the municipality not obtaining value from the contract.'
According to the report, R8.2m was paid to SKBC in six different transactions from September 2020 to July 2021.
The city wants the funds recovered because: It is uncertain if the municipality received the goods or services;
It is uncertain if the goods and services were aligned with the specifications; and
It is uncertain if the council received any value against the R8.2m expenditure incurred.
Issues were attributed to systemic gaps and administrative challenges in the tendering process, with the report showing no officials had committed financial misconduct.
In its recommendations, the report notes that the metro remains uncertain about who is liable for the irregular expenditure, citing a lack of further information, compounded by the fact that the project manager is no longer employed by the municipality.
SKBC director Sicelo Kubashe could not be reached for comment.
At the meeting, councillors called on the metro to recover the money.
When contacted, Mpac chair Tumi Ranyele said she could not talk as she was in a meeting and referred questions to ANC councillor Xolani Notshe, who said he was also in a meeting.
ACDP councillor Lance Grootboom said the city had to recover the funds because the report did not contain enough details of why it must be written off.
'They wanted us to write it off because some people no longer work for the city, but we felt we needed to get the money back instead, and we required additional information,' Grootboom said.
'We felt the explanation for the write-off was not good enough because, as the report states, we did not get value for money, and the city is uncertain if it got the expected goods or services.
'The Municipal Finance Management Act does not allow us to write off willy-nilly.'
He said the report was deferred for acting city manager Ted Pillay to provide the committee with a PwC and disciplinary board report to help get to the bottom of the issue.
The Herald
