The Nelson Mandela Bay metro and the operators of the Nelson Mandela Bay Stadium have asked for more time to file opposing papers in an application seeking to declare a contract between the two invalid.
The metro and Access Management, who are cited as respondents, in an application by the Nelson Mandela Bay Ratepayers Association, AfriForum and one other, made their request in the Port Elizabeth high court on Tuesday.
The application to have the contract between the two respondents declared unlawful and invalid was lodged with the court in November last year. In the papers, the applicants claim the metro irregularly and for “ulterior purposes” extended Access Management’s contract to run the stadium for the period July 1, 2015 to June 30, 2016.
AfriForum allege that the relationship between the metro and Access Management had led to the abuse of public funds.
The stadium was built and completed in 2009 to accommodate soccer matches for the 2010 Fifa World Cup. A request for a proposal process was undertaken to procure and appoint a stadium operator for a period of two years and nine months.
The court documents indicate that Access Management had been appointed in September 2009, an agreement that was properly renewed for a further three years until 30 June 2015.
However, the applicants claim the metro then deviated from the supply chain management policy during January 2014 when Nelson Mandela Bay Development Agency CEO Pierre Voges sought to commence a new RFP process 17 months before a new agreement was to commence.
According to AfriForum, Voges was unceremoniously ejected from the process by Nadia Gerwel, a former senior finance official, who took control of the renewal of the agreement with Access Management.
Gerwel then forwarded an email she sent to Voges, who had conducted the previous RFP for the stadium, to senior officials at Access Management.
In court documents AfriForum alleged: “It [was] illegal to favour the [Access Management] to this extent, considering that the [Nelson Mandela Bay municipality] was obligated to follow an RFP process.”
It further indicates that the Nelson Mandela Bay municipality at the time had received legal advice which outlined that a management agreement for the stadium could not simply be renewed and that there had to be an RFP process.
AfriForum allege that the metro’s former city manager, Mpilo Mbambisa, the city’s current chief financial officer, Trevor Harper, and other former top officials acted illegally in renewing the contract .
AfriForum claim that Nelson Mandela Bay Municipality colluded with Access Management to abuse municipal funds.
Further allegations stem from the relocation of soccer club Chippa United to Port Elizabeth.
Court documents cite that officials from the metro represented to the City Council that moving Chippa United to Port Elizabeth would only cost the city R15 million. However, there was an agreement between Access Management and Chippa United in terms of which they were entitled to a further R7 million per annum, which Access Management was liable for, if the money could not be secured from provincial government.
Despite the council only approving relocation costs of R15 million for Chippa United, Nelson Mandela Bay municipality accepted liability for a further R21 million, for which Access Management was responsible, without approval from the agreement of the council to authorise this expenditure, the court papers said.
According to the document, the metro approved a loan of R750 000 to Chippa United and also advanced an amount of R5.7 million to Chippa United even though the Municipal Finances Management Act forbids the metro from granting loans.
Papers also cited “unauthorised and irregular payments” made to the Eastern Province Kings (EP Kings) rugby union team.
“EP Kings ceded their match day rights to the second respondent [Access Management], for 1 January 2014 to 31 December 2014, in lieu of R11 684 252, which the second respondent had already paid over to the EP Kings.”
During July 2014 Access Management issued an invoice to the metro in the amount of R14 820 000 that was subsequently paid to them by the metro, the papers state.
Access Management then made a further loan to EP Rugby and received cession of the match day rights for 1 July 2015 to 30 June 2016. This agreement was for R18 931 766.
Furthermore, during July 2015, the metro received an invoice from Access Management, in the amount of R9 631 766, which was subsequently paid.
“There was no lawful cause for this payment. This was a liability that the second respondent had accepted and had the cession of match day rights to cover it. The council of the first respondent did not authorise this payment; alternatively, if this payment was authorised, it constituted a loan to EP Rugby,” court papers cited.
On Tuesday, lawyers for the metro and Access Management during their application for a postponement said circumstances around the matter were premature and investigations into the allegations still needed to be done.
The matter was postponed to Wednesday for the court to decide if the postponement would be granted.
– African News Agency (ANA)