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Hawks probe municipal tenders


A case of alleged fraud, corruption and money laundering at Magareng Municipality, surrounding the awarding of multimillion-rand tenders in the Warrenton district, has been reported to the Hawks for investigation.

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A CASE of alleged fraud, corruption and money laundering at Magareng Municipality, surrounding the awarding of multimillion-rand tenders in the Warrenton district, has been reported to the Hawks for investigation.

This includes the R45 million Ikhutseng bulk water supply and reticulation project, where the municipality only had an available budget of R10.6 million while the overall estimate of the initial scope was R18 million.

The municipality had secured funding of R45 million through the Municipal Infrastructure Grant (MIG), but then informed national Treasury in February that it would not be feasible to start the project due to a shortfall in funding.

It indicated that while construction was scheduled to begin in October last year, it would be impractical to start the project as the municipality would have to wait until the next financial year for a new allocation of funds.

“The project is big in magnitude and construction is expected to overlap over a period of three to four years.”

The Magareng Municipality highlighted the water backlog of 1 298 sites on its new development households.

“This area has been using urine diversion system toilets and depends on communal pipes for the past eight years to date. The existing network is very old and can no longer overcome the current demand.

“People are travelling more than 200 metres to their nearest stand pipes and also have to wait in long queues to get water.”

Service providers contracted to work on water projects in Magareng were advised by the municipality last year that it had insufficient funds and were requested to adjust their rates for the reduced scope of work.

The municipality requested Treasury to transfer all its funds without any deductions to “ensure the smooth progress of the project”.

National Treasury, however, informed the municipality in March that it may halt the 2016/17 MIG allocation, amounting to R2.1 million, as well as an allocation of R10.6 million due to underspending, while the municipality had also failed to account for why the funds were not used as intended.

Sources at the municipality indicated that funds were diverted from the water allocation to roads and all water projects have ground to a halt.

A competitive service provider requested the municipality to disclose how the tender for the the upgrading of new roads in Ikhutseng was awarded, as it stated that the appointed company did not have the required Construction Industry Development Board (CIDB) grading as specified in the bid.


The company was apparently appointed despite recommendations from council, emanating from the CIDB downgrading of the company, and has subsequently been paid out substantial amounts from the municipality.

Provincial Treasury had also advised the municipality that several discrepancies were detected with the evaluation and adjudication process of this tender.

The complaint registered at the Hawks also includes an apparent fraudulent counter offer that was presented by a municipal official from Tswaing Local Municipality, which was used to motivate for a notch promotion increase to level 15.

The municipality had indicated that it was not able to match the salary offer, where the former mayor had refused to accept the official’s resignation letter. The official was then moved to another post, which was apparently not advertised.

Hawks spokesperson, Captain Philani Nkwalase, stated that the matter was under preliminary investigation to verify if there were substantial allegations to pursue the case.

Corporate administrative manager at Magareng Municipality, Thapelo Jacobs, stated that the municipality was offering its full co-operation regarding the Hawks investigation.

“The municipality has submitted the required information to the Hawks and will not comment on the matter since it is now sub judice.”

Jacobs indicated that all MIG funded projects were paid through the MIG grant and funds.

He added that all appointments were done in line with the regulations and recruitment processes.

Spokesperson for the Department of Co-operative Governance, Human Settlements and Traditional Affairs, Lerato Khunou, said that the department would allow the Hawks investigation to unfold, unhindered.