SIU flags inflated generator prices in R25m Ditsobotla contract probe

The Special Investigating Unit (SIU) has referred an investigation into a R25 million irregular procurement of generators for the Boikhutsong pump stations in Ditsobotla Local Municipality to the Special Tribunal, after inflated pricing and procurement breaches involving Rensch Trading CC were detected. In a report tabled before the standing committee on public accounts in parliament last week, the SIU found that the company was appointed without the proper procurement processes being followed. The investigation revealed that the service provider was appointed under Regulation 36 of the National Water Act as an emergency measure, despite the process appearing to be aimed at ratifying a prior telephonic appointment. “No contract or appointment letter exists for a contract valued at R25 million,” the report said. “The delivery and installation of generators took place at inflated prices ranging from R250 000 to R550 000, based on a variation order relating to specifications and pricing, without any supporting evidence to justify the increase.” The SIU also identified fruitless and wasteful expenditure amounting to R5 704 503.40 for work that was not completed but was paid for. In addition, irregular expenditure of R25m was linked to the procurement of generators. The matter has been referred to the Special Tribunal, while three cases have been sent to the embattled municipality for disciplinary action. Advocate Victoria Mdlalose, the acting North West provincial head of the SIU, told parliament that the procurement had been done by Ngaka Molema District Municipality on behalf of Ditsobotla Local Municipality. Mdlalose said the service provider was paid R5.7m for work not yet done. “Part of this was emanating from payments that were done [by the municipality] to the service provider for days … in actual fact that work was not actually carried out. It is also in relation to an over payment of R2 million that was done to the service provider.” The SIU said the matter was