North West municipality loses control of own bank account after assets are attached

2018-05-04 18:00
An overflowing sewerage plant. (File photo: City Press)

An overflowing sewerage plant. (File photo: City Press)

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A North West municipality has lost control of its own bank account after a private company took it to court to recoup R7.8m owed to it. 

JVR Enterprises turned to the courts after Mamusa Municipality unlawfully terminated its sewerage system cleaning contract in Ipelegeng. 

The sheriff of the court ordered that the municipality's movable assets and its account be attached on April 20. The municipality had to beg for the bank account to be detached to allow it to pay its employees on April 24, the day before pay day. 

In the legal letter, stamped by the sheriff of Schweizer Reneke, the company is given the right to attach the bank account and if it has an insufficient amount, it is directed to attach the municipality's movable assets. 

Governance in the North West has come under the spotlight due to widespread protests amid allegations of maladministration following calls for embattled Premier Supra Mahumapelo to step down.

A councillor, speaking to News24 on condition of anonymity, said he was against the termination of the contract when the decision was taken to do so in 2016. He added that he was not surprised the move backfired on the ANC-led municipality.

Warnings 'fell on deaf ears'

"I remember that November sitting. It was a special sitting and the only issue on the agenda was the JVR issue, but it was also used to get rid of then municipal manager Rantsho Gincane," said the councillor.

He said the ANC argued that the JVR contract was unlawful but that his and others' warnings that the decision would be challenged legally fell on deaf ears.

JVR owner Fabian Katz said he "obviously" felt the decision was unfair and that the contract's legitimacy was also affirmed by the courts, six months after it was terminated.

"They appointed me, next thing they terminate my contract and before I knew it, there was someone else on site doing the exact same thing," Katz told News24.

He said the municipality had claimed that he was not appointed procedurally. The courts disputed this. 

He also confirmed that his lawyers were now in talks with the municipality.

Mamusa a 'disaster'

"I am now waiting on them to agree on a settlement," said Katz.

The council member said he believed the current administration had brought the municipality into disrepute. Another councillor claimed that all sewerage lines were now blocked in Ipelegeng. 

"Individuals behind this decision need to account. Those who terminated this contract unlawfully must just take responsibility," said the councillor.

A municipal employee told News24 that Mamusa was a "disaster", explaining that politics were prioritised ahead of residents' needs.

The employee said people "who serve a certain view" were forced on residents while "those the community wants in leadership positions" were overlooked.

Mayor defends decision

The councillor agreed with this, adding that even employees who didn't agree with Mahumapelo's allies were sidelined.

However, Mayor Aaron Motswana defended the decision to cancel the contract. 

Responding to News24's questions, he said council had debated the JVR contact and concluded that the municipality was within its rights to cancel the contract because "all was not well with the manner in which this contact was awarded". 

"Council has the responsibility to mitigate risk and once proven that the contract is above board we will be able to account for the expenditure. For now we are taking the matter on review," Motswana said to News24 when asked if this was not wasteful and fruitful expenditure. 

The mayor confirmed that the municipality had to beg for the account to be detached.

"Council pays salaries on the 25th of each month so in the event something would have gone wrong we would have obviously came up with other avenues," he said. 

Read more on:    supra mahumapelo  |  mahikeng

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