Joburg clears officials after making U-turn on investigating R1bn tenders

The City of Johannesburg has admitted launching an investigation into nearly R1-billion in tenders awarded to companies linked to the families or friends of councillors and city officials, despite initially insisting there was “nothing wrong” and refusing to investigate the matter.

This emerged during a rare and heated oversight session in Gauteng on Thursday, 4 September with members from Parliament’s Portfolio Committee on Cooperative Governance and Traditional Affairs, the Standing Committee on Public Accounts and the Standing Committee on the Auditor-General.

In response to MPs’ questions, the city’s Group Forensics and Investigation Services head, Sinaye Nxumalo, admitted the city had launched an investigation, which found at least one case where a company awarded a contract had a director whose spouse is an MP.

Nxumalo, however, maintained there was no wrongdoing in that tender or any of the others awarded to family members and friends of councillors or city employees in 2023/24.

“When we looked at whether or not there had been undue influence or conflict of interest, we found that there was none. However, the declaration was included in the financial statements of the city,” said Nxumalo.

The portfolio committees have since instructed the city to send them a written report on the matter.

In June, Daily Maverick’s Ferial Haffajee reported that six contracts worth R972-million were awarded in 2023 as part of the Rea Vaya Bus Rapid Transit system expansion. The companies involved were found to be linked to the family members of city insiders, sparking allegations of nepotism and improper conduct.

Read more: ‘No problem,’ says Joburg as R1bn tender goes to officials’ families or friends

At the time, city spokesperson Nthatisi Modingoane defended the contracts, saying the metro government saw no irregularities and would not investigate.

In her report, Auditor-General Tsakani Maluleke found that, although not illegal, awarding contracts to companies linked to officials’ relatives or associates created conflicts of interest and increased the risk of undue influence and irregularities.

“The possibility of undue influence cannot be discounted, especially if the person could have influenced the procurement processes for these awards, potentially creating opportunities for irregularities,” said Maluleke.

City officials slammed

During Thursday’s session, MPs slammed the city’s leadership for failing to address issues around basic services and public safety.

From uncollected garbage and pothole-ridden roads to broken streetlights and hijacked buildings, MPs painted a bleak picture of Johannesburg, once hailed as South Africa’s flagship metropolis.

“You can’t even walk with a cellphone in town,” remarked one MP, highlighting the growing sense of lawlessness and danger in South Africa’s economic capital.

“This is not Johannesburg any more. I do not know what it is,” said another MP.

The city’s delegation, which included several MMCs and top executives (however, Mayor Dada Morero wasn’t present), was repeatedly called out for failing to respond adequately to questions and for passing the blame on to the previous administration.

The chairperson of the Cooperative Governance and Traditional Affairs Committee, Dr Zweli Mkhize, was scathing in his assessment: “From where we sit, akuhlangani [it doesn’t make sense].”

He accused officials of evasiveness and attempting to mislead Parliament: “You are giving us a lecture on how the system should work. That’s not what we’re asking.”

MPs also raised alarm over the city’s financial decisions, particularly the R70-million spent on consultants that was flagged by the Auditor-General.

“Was that necessary?” asked one MP, questioning why internal capacity wasn’t being developed.

“There is an overreliance on consultants,” said MK party MP Sanele Mwali, calling the expenditure wasteful amid growing dysfunction.

The city’s delegation denied that it was reliant on external consultants, saying it had been adequately capacitated in this regard. When Mkhize probed whether the Auditor-General was lying, city officials did not provide a direct answer, saying they had made efforts to meet with the AG to rectify the issue.

Lesufi’s admission

Before the appearance of the city’s delegation, Gauteng Premier Panyaza Lesufi also faced tough questions and ultimately agreed with the MPs on the state of the city, saying Johannesburg urgently needed a complete overhaul.

“In its current state, it cannot compete with world-class cities like Dubai,” he said.

Lesufi’s admission comes more than five months after President Cyril Ramaphosa said he was not “pleased” with the state of the Johannesburg and wanted it fixed urgently.

Read more: ‘Not a pleasing environment’ — Ramaphosa says Joburg must fix its many problems, and fast

EFF MP Hlengiwe Mkhaliphi slammed City Speaker Margaret Arnolds for her lack of response to corruption allegations and demanded clarity on the Anti-Corruption Unit’s progress, including the number of criminal cases and outcomes of investigations.

In response, Nxumalo revealed that Johannesburg ended last year with 452 reported cases involving fraud, corruption or maladministration and 110 cases related to hijacked buildings.

Still, MPs were unconvinced.

“Someone is not telling us the truth,” Mkhize said firmly, as the meeting ended with strong calls for urgent reform and accountability to rescue the city from further decline.

Lilian Ngoyi Street

Another key issue during the oversight meeting was the refurbishment of Lilian Ngoyi Street, which “reopened” this week, more than two years after an explosion caused major damage. Nearly R215-million was spent on the refurbishment, but the street remains closed to motor vehicles.

Part of the street is expected to open on 12 September before the city closes another stretch for refurbishment.

MPs expressed strong dissatisfaction at the use of bricks rather than tar to resurface the street, the excessive delays, and doubts over whether the project delivered value for money.

Read more: Two years and R215m later, Lilian Ngoyi Street finally reopens — but not for motorised traffic

In response, Acting Executive Mayor Mlungisi Mabaso, the city’s MMC for human settlements, said the project had taken far longer than planned due to the poor performance of the original contractor.

Mabaso said the city was forced to expand the project scope to include additional elements like traffic lights. Mabaso defended the decision to use bricks to resurface the road, saying it was intentional and aimed at ensuring long-term sustainability, given the city’s weather conditions and traffic demands.  

Following the oversight session, the committees requested multiple reports, including a detailed account of criminal investigations related to fraud and corruption, with a comparison between internal control systems and Auditor-General referrals.

The committees directed the city to submit reports every three months, which will be forwarded to the provincial authorities and later to the National Assembly, covering the matters discussed. DM