The financially distressed Enoch Mgijima Local Municipality (EMLM) has been paying more than R1.2m a month to a local business for the hire of road maintenance plant since October last year, and will continue do so for the next 31 months.
Last month, the EMLM barely had enough revenue to pay salaries and has now missed the deadline to pay its Eskom debt for January.
They were also supposed to provide proof of payment to Eskom by February 8 to the Phakamisa Business Forum which assisted in having the power utility rescind its decision to switch off power in the EMLM area last year.
EMLM has asked to be given an extension until February 14 to provide proof of payment.
Apolitical organisation, Let’s Talk Komani (LTK) brought this matter of concern to The Rep indicating it was inconceivable that at a time the municipality could not pay its Eskom current account or salaries, it was to spend more than R1.2m a month for three years.
In an appointment letter in possession of The Rep the company, Tshiya Infrastructure Development (Pty) Ltd, was contracted on September 13 2019, for the lease of plant and machinery for 36 months at a total bid price of R1 249 912 per month.
The Rep understands that the hiring company was established in the Free State, but the owner lived in East London and had offices in Prince Alfred Street in Komani.
LTK chairman Ken Clark raised concerns about the municipality spending public funds with a non-local company, “In a deal that is, at best, highly suspicious.”
“We need a forensic audit as we suspect wrongdoing. While we fully support the need for our municipality to have plant equipment, it must be at a reasonable cost and we would all hope that local suppliers would benefit. No one has been able to get details on what equipment is involved so sourcing comparative quotes is not yet possible.”
EMLM spokesman Lonwabo Kowa said the plant was for road maintenance and cleaning in Mlungisi, Ezibeleni and Ilinge townships.
“The plant is also used for refuse collection, mainly to help eliminate illegal dumping sites. We hired two TLBs, four tipper trucks, two water carts, two rollers, one excavator and one LDV bakkie. More plant may be hired or less, depending on the demand.
Asked where the money to pay the company would come from and whether there were any local businesses that had the required plant for hire, Kowa said the municipality had made sufficient provision in its budget for the delivery of basic services.
“The financial situation of the municipality does not exonerate it from honouring its responsibilities.
Government’s supply chain policy was used to select the bidder and this company was selected as the best.”