Engineering company sees SIU in court related to R73m project

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Special Investigating Unit (SIU) head, advocate Andy Mothibi. Photo: Tebogo Letsi/Gallo Images.
Special Investigating Unit (SIU) head, advocate Andy Mothibi. Photo: Tebogo Letsi/Gallo Images.

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An electrical engineering company is squaring off against the Special Investigating Unit (SIU), demanding that the unit’s report accusing it of overcharging R73 million on a project in Limpopo be reviewed and set aside.

Lufuno Mphaphuli, the owner of Mphaphuli Consulting, claims in papers filed in the Polokwane High Court on July 27 that his company was not included in the terms of reference in the presidential proclamation that called for an investigation into fraud, corruption and maladministration in the Fetakgomo Tubatse Local Municipality in Burgersfort in 2014.

READ: SIU Tubatse report is a damning indictment of waste and greed

The municipality awarded Mphaphuli Consulting a R326 million tender to electrify about 20 000 rural households in 2013 following its success in the Vhembe District Municipality in Thohoyandou. The project was funded by the department of mineral resources and energy through the Integrated National Electrification project, and it aimed to accelerate the pace of electrifying households as only 1 000 houses were connected in three years.

However, the municipality decided in 2016 not to pay the company for work done.

In 2018, Mphaphuli attached the municipality’s assets and bank accounts when the council defied a Polokwane High Court ruling to pay R41 million for work done. The Fetakgomo Tubatse council lost the case on appeal in the Bloemfontein Supreme Court of Appeal and was forced to pay the amount.

As things stand, the council owes Mphaphuli R9.7 million for work done and approved by Eskom in 2019. The company has instituted a civil claim in the Polokwane High Court to get its money.

READ: Engineer dares SIU in R73m lawsuit over stalled Tubatse electrification project

The SIU found in its investigation, which was completed in September 2019, that Mphaphuli overcharged for the electrification of each household when it put down the amount at R16 000, hence the amount of R73 million and the accusation that the contact was irregularly awarded.

Mphaphuli charged about R10 499 per household in Vhembe in 2011, and argues in the papers that the price at Fetakgomo Tubatse was benchmarked against Eskom’s charges in the area and other factors such as geographical layout, and that this price was approved by all concerned departments and National Treasury.

The SIU has since lodged a civil claim in the Polokwane High Court to recover the R73 million.

In his affidavit, Mphaphuli says:

  • The presidential proclamation authorised the investigation of Fetakgomo Tubatse officials for corruption, fraud and maladministration that happened between March 11 2004 and the publication of the proclamation in 2014, and his company was never mentioned;
  • The SIU was biased because it did not interview officials from National Treasury, the department of mineral resources and energy and municipal officials when conducting its investigation;
  • The project went smoothly until after the local government elections in August 2016, when the municipality started reneging on payments;
  • The SIU acted on a request from municipal officials and politicians to investigate his company and not according to the proclamation; and
  • The SIU was unduly influenced by the municipality and lacked independence.

“All the invoices submitted before then were paid with no question on the contract amount based on R16 000 per household,” Mphaphuli said. He added that there was a steering committee made up of all departments that oversaw the project and approved payments.

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Mphaphuli said that the courts had found nothing wrong about its contract and charges.

“There were no allegations of improprieties against Mphaphuli. In fact, there were rulings in favour of the applicant [Mphaphuli], which were made by the Polokwane High Court and Supreme Court of Appeal,” he said.

SIU spokesperson Kaizer Kganyago said that they had not received Mphaphuli’s papers yet.

“The SIU confirms to have consulted with the relevant state officials of the state institutions. It must be noted that we interview people as per our investigations that we are performing. The investigation of this matter by the SIU is as a consequence of the SIU, among other aspects, having interviewed certain officials of the municipality,” Kganyago said.


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Sizwe sama Yende 

Journalist

+27 11 713 9001
sizwe.yende@citypress.co.za
www.citypress.co.za
69 Kingsway Rd, Auckland Park
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