Port Elizabeth – Nelson Mandela Bay Executive Mayor Athol Trollip has instructed city manager Johann Mettler to pursue six issues highlighted in the controversial Kabuso report to recover wasted ratepayers’ money.
The 150-page report details years of maladministration and financial mismanagement, amounting to millions of rands between 2003 and 2009, while the municipality was under the leadership of the ANC and then mayor Nceba Faku.
It was released in 2010 but kept under wraps by local and provincial role players until a court order in October 2011 instructed that the report be made public as it was in the public’s interest.
In 2013, Faku, who was mentioned numerous times in the report, was cleared of all criminal charges relating to it after the matter was handed over to the Hawks.
Only one person was ever criminally prosecuted.
Yvonne Zuma was charged with fraud for falsifying names in her tender application to run a curio shop at the Red Location Museum.
She received a suspended three-year sentence. The Hawks concluded that no one else could be held criminally liable and finalised their investigations in 2013.
Trollip, however, said while he accepted that a significant amount of time had passed since the acts of corruption and maladministration had taken place and that in many instances the individuals or businesses could no longer be traced, there were still aspects the municipality could follow up on.
“The severity of acts of corruption do not diminish with time, and while this government will not spend its time looking backwards, we consider the items listed in the Kabuso report worthy of discernment,” he said.
The automatic meter reading contract
In December 2005, a contract between Unique Mbane of the Jeeva Group of Companies, and the municipality entered into a contract for 27 300 automatic meter readers.
They only ever installed 300, which failed to meet the technical requirements.
Despite this, the company was paid for an additional 2 000 meters on the instructions of then municipal city manager, Elias Ntoba.
Trollip recommended that the amount paid for the additional meters be recovered from Ntoba as fruitless and wasteful expenditure.
In September 2004, the municipality entered a lease agreement with Isimilo Investments for the development of the Beachview Resort.
Trollip pointed out that the resort was still being operated by the company, despite being in arrears of approximately R3m in rates and taxes and was operating at a loss.
He recommended that the arrears be recovered and a new rescue strategy be put together for the resort as well as issuing the company with a new notice of compliance.
In 2001, the municipality attempted to purchase the Norwich building, now known as Kwantu Towers, but all bids up to R7m were declined.
Africorp, a division of the Jeeva Group of Companies, purchased the building in 2003 for R2.5m.
Following the purchase, an exorbitant lease agreement was entered into with the municipality, despite alternative less costly office accommodation being available.
Trollip instructed Mettler to finalise negotiations with Africorp by September and to seek alternative offices.
Swartkops Power Station
The Swartkops Power Station, which was decommissioned in 1998, was sold off by the municipality to Ruco Properties, who proceeded to strip and sell off the parts.
Trollip instructed Mettler to institute legal proceedings against Ruco Properties to recoup the costs of the sold-off equipment and to ensure that the power station be transferred back into the name of the municipality.
Van Stadens Resort
In August 2004, the Van Stadens resort was leased to Buhlebendalo to develop the resort, despite no evidence of the lease fees of just under R500k being paid.
Trollip said the resort had been poorly managed and was running at a loss. Trollip instructed Mettler to issue an eviction notice to Buhlebendalo and institute legal proceedings against them to retrieve a value of movables.
Trollip said a similar lease agreement entered into by the municipality with Madiba Bay Resorts to manage the Willows Resort, which was also behind in rates and taxes as well as the rental amounts owing to the municipality.
Trollip instructed Mettler to evict Madiba Bay Resorts and to institute legal proceedings against them for outstanding fees.