Buffalo City Municipality Moves to Recover R16-Million in Irregular Housing Tender Spending
Officials and Contractors Face Disciplinary Action Over Covid-Era Corruption Scandal
The Buffalo City Metropolitan Municipality has resolved to take action against officials and contractors involved in irregular expenditure of R16-million meant for emergency housing during the Covid-19 pandemic.
Key Findings of the Investigation
- R16-million was irregularly spent on 300 temporary houses
- Contractors received unfair advantage in bidding process
- Payments made before work completion
- Covid emergency budget deviation declared invalid
The Buffalo City Metropolitan Municipality council recently resolved to refer implicated officials for disciplinary processes following a Special Investigations Unit (SIU) probe into a R16-million housing tender corruption scandal dating back to 2020.
Details of the Irregular Expenditure
A confidential report seen by GroundUp reveals how four senior housing officials unlawfully authorized payments to two contractors for emergency housing during lockdown. The SIU found that:
The municipality’s general manager of supply chain management, Andile Xoseka, improperly emailed tender details to nine companies hours before official publication, giving them unfair advantage. Three companies – SQT Construction and Civils CC, Vitsha PM Consultants CC and Coalition Trading 1203 CC – ultimately won contracts, with SQT and Vitsha receiving R6.5-million and R9.7-million respectively.
Payments were authorized and completion certificates issued before work was finished, with one R1.2-million invoice to SQT being a duplicate payment. Housing directorate head Luyanda Mbula and inspector Siphokazi Dlongwana were held responsible for these irregularities.
Project Failures and Legal Violations
While some prefab houses were built for people evicted from Buffalo Flats in 2019, the SIU found not all planned structures were delivered. Many were only completed in 2021-2022, after lockdown ended.
The budget deviation used to justify the emergency procurement was declared invalid as Covid emergency provisions had expired when payments were made. The SIU concluded the work “did not fall within the scope” of the tenders, resulting in contractors being “unjustifiably enriched.”
Legal Action and Next Steps
The municipality has:
- Referred officials for disciplinary processes
- Requested SIU to forward case to National Prosecuting Authority
- Issued court summons to recover funds (January 2024)
- Referred matter to Municipal Public Accounts Committee
Municipal lawyers found officials guilty of financial misconduct under the Municipal Finance Management Act. While Xoseka has filed a plea denying wrongdoing, other defendants haven’t responded.
Contractor Responses
SQT founder Siviwe Mpengesi refused to comment, calling the report “top secret” and threatening to block inquiries. Vitsha didn’t respond to questions. Implicated officials also remained silent.
The municipality continues investigating, including surveying completed houses, before proceeding with further legal action to recover the misused funds.
Source: AllAfrica