Officials, firm sued after ‘illegal’ payments
The Nelson Mandela Bay Municipality is suing a Port Elizabeth security firm and seven of the city’s current and former senior staff in the hope of recouping R92.4-million spent on CCTV cameras for the beleaguered bus system.
The municipality believes the payments, ultimately approved by suspended corporate services boss Mod Ndoyana between November 2013 and September 2014, were irregular and unlawful as there was no legal contract in place.
It wants the Port Elizabeth High Court to hold Afrisec Strategic Solutions and the other seven people liable for the nine payments over the 10-month period.
The seven metro staff who are listed as defendants are Ndoyana, chief financial officer Trevor Harper, former IPTS boss Mhleli Tshamase, fired supply chain contracts controller Sox Nkanjeni, legal services official Nobuntu Mgogoshe and former municipal facilities directors Patrick Keble and Armien Madatt.
This comes as the metro is involved in another legal matter involving some of its staff and businessman Fareed Fakir, in which it is also trying to recoup some of the
money squandered on the Integrated Public Transport System (IPTS).
The city believes that Afrisec was “commensurately unjustifiably enriched” by the municipality and is liable to pay back the R92.4-million.
It claims the only binding document between the city and Afrisec was a letter from the municipality in July 2012, accepting Afrisec’s tender for the supply and installation of CCTV cameras and other security for municipal buildings.
The tender was for three years, capped at R5-million.
The municipality said no formal contract had ever been signed between the two.
It claims that as the city needed CCTV camera surveillance installed on buses, along bus routes and at bus stops, Keble and Nkanjeni had insisted that the metro could piggyback off the existing tender.
This, despite warnings from Tshamase’s predecessor, Tony Arthur, and safety and security assistant director Lee-Anne Meiring that the scope of the tender was different.
Instead, Meiring was allegedly told by Keble and Nkanjeni to use the existing tender and not interfere in supply chain management matters.
“Just a word of advice, please leave supply chain management matters to SCM practitioners to avoid any legal implications,” Nkanjeni wrote to Meiring.
“Therefore, all of us must respect each other’s field which we are assigned to in order to take full responsibility when the need arises.”
Afrisec then allegedly supplied the cameras and other hardware and was paid in tranches.
The court papers detail how Tshamase tried to rush the spending, saying the city could lose its grant funding from the Department of Transport if the money was not spent by June 30 2014.
The city claims he even asked Afrisec to sell it the equipment for IPTS routes although it was “not yet needed for this purpose”, saying the cameras should not be delivered to the metro but retained in Afrisec’s control.
The municipality said there was no evidence that some of the equipment – for which the city had paid R45.5-million – even existed.
“The said goods have … not been delivered to the [municipality] and the [municipality] has no knowledge of the whereabouts thereof or indeed whether they exist,” it said.
The director of expenditure management and financial control, Barbara de Scande, raised the alarm in August 2014, saying the work reflected did not fall within the scope of the tender.
“It is clear that advice given by supply chain is incorrect in this instance and that there was no authority to use the existing tender,” she wrote.
“The memo that is being referred to was signed by S Nkanjeni and not the director of [supply chain].”
Harper then asked for legal advice and referred the matter to internal audit, wanting to know if the municipality should pay the R35-million that was still owed to Afrisec at the time.
He instructed De Scande later to pay Afrisec after Mgogoshe advised that they should be paid because services had been rendered and failure to pay could lead to litigation.
In its legal summons, the metro claims all payments were unlawful and the actions of all eight defendants were negligent, causing the metro to suffer damages.