OR Tambo Municipality Tender Scandal: R20m Project Swells to R70m Amid Corruption Claims

A shocking revelation has come to light regarding the OR Tambo District Municipality's financial mishandling, which ballooned a project budget from R20 million to a staggering R70 million due to alleged corruption and maladministration. The South African Special Investigating Unit (SIU) briefed Scopa, detailing the discrepancies in a tender fiasco that has seen friends and family benefit illegally.

Initially, a lofty goal was set by the municipality to establish a Strategic Program and Project Management Office (SPPMO) designed to ensure clean audits and improved service delivery. However, good intentions morphed into a harbinger of financial misconduct, with the tender being awarded to Ayavelisa Consortium at a cost more than triple the estimated sum.

The Special Investigating Unit (#SIU) has revealed how a project intended for the OR Tambo District Municipality, initially budgeted at R20 million, spiralled into a R70 million irregular tender. 💸 #TheCitizenNews

Click below to read more ⬇️https://t.co/UBG9lzkSKD

— The Citizen News (@TheCitizen_News) October 23, 2024

During the SIU briefing, it emerged that a lack of documentation, such as council resolutions and appointment letters for Bid Evaluation Committee members, marred the procurement process. Ayavelisa, although not the lowest bidder, secured the contract, subsequently leading to transactions totaling over R70 million to the consortium and its affiliated partners.

Investigations revealed that high payments flowed to companies owned by consortium employees, and municipal officials allegedly received kickbacks, including a motor vehicle purchased by a service provider for an official's personal use. Severe discrepancies were noted, such as payments for a boxing tournament unrelated to the SLA and witnessed reluctance in providing evidence to the SIU due to fear of victimization.

The remuneration paid to Ayavelisa Consortium and associated entities raises serious concerns:

- Ayavelisa Consortium: R70 136 762.85

- Laurie Shaw: R2 430 583.21

- V3 Consulting Engineers: R117 952.49

- Lazola Media: R13 069 255.52

The SIU is committed to recovering the R54.1 million lost to these irregularities and to presenting evidence to the civil litigation case assessment committee, which could lead to the Special Tribunal setting aside the contract. With 11 officials recommended for disciplinary action and six cases referred to the NPA, the investigative journey is far from over, with a completion target set for December 2024 and an additional probe into water supply structures expected to conclude by August 2025.

The unfolding narrative of this tender scandal is a grim reflection on the governance challenges faced within South African municipalities, highlighting the imperative for robust oversight and accountability mechanisms to protect public funds from corruption.