The City of Tshwane has launched a review application in the high court in Pretoria to have a multibillion-rand contract for the construction of a broadband network set aside, saying the deal was awarded irregularly.
At a press conference in Pretoria on Thursday, Tshwane MMC for corporate and shared services Cilliers Brink said the city wants its contract with Thobela Telecoms, awarded by the previous ANC administration, cancelled.
“In November last year, the auditor-general found the deal to be irregular, and determined its value at R2.7bn (before VAT). The AG finding prompted the Solly Msimanga administration to investigate the procurement of the deal,” Brink said in a statement read out to journalists.
The contract is not related to the agreement between the city and the non-profit Project Isizwe for the roll-out of free Wi-Fi services. The city said it remains committed to that deal, wanting to put it on a “solid financial footing to that we may continue to provide free Wi-Fi to the people of Tshwane”, he said.
The city believes the broadband contract and its procurement are “riddled with irregularities and non-compliance”.
Among other things, the city alleges that changes were made to bid specifications after bids had closed and there had been violations of the Preferential Procurement Act and its associated regulations. It said that two vendors from the same holding company submitted bids that were not eliminated during the selection process.
In addition, crucial adverse information about the proposed deal was withheld from councillors when they voted to approve it and there was non-compliance with section 112 of the Municipal Financial Management Act relating to cost effectiveness, the city alleged.
‘Seeks to set aside’
“Tshwane Broadband is the third in a list of major, multi-year contracts concluded by the previous city government, which the Msimanga administration seeks to set aside because we contend they are manifestly unlawful — and prevent the city from discharging its mandate to provide better services to residents,” Brink said.
“The Tshwane broadband deal binds the city in an 18-year relationship with an ICT service provider to build a broadband network, which would later become a commercial outfit… An assessment of the deal’s terms and conditions confirm that it exposes the city to severe, one-sided liability and does not offer value for ratepayers’ money,” he added.
The Tshwane metro council voted in favour of the project in April 2016. “Council approval is required for all obligations binding a municipality beyond three financial years. Based on copies of correspondence obtained, the council was not properly informed or did not properly consider the objections or concerns raised by the national treasury, the Gauteng provincial treasury and the department of telecoms & postal services.”
The city said proper studies weren’t conducted into the affordability of and risk associated with the project. The project also appears to fall outside the scope of powers and functions of local government, it said.
“What we have discovered, and will now present to court, are serious irregularities which we believe taint the legality of the broadband deal,” Brink said. “When a majority of councillors voted to approve the deal in April 2016, they did not have the necessary information to make this determination. We also believe that crucial information was withheld from them.
“Subjecting the broadband deal to judicial review is crucial, not only to the city’s financial recovery but its duty as a constitutional agent not to submit to an unlawful contract,” Brink said.
He said that, on the advice of the city’s attorneys, it will not comment in further detail on the case until the matter has been set down in court. — © 2017 NewsCentral Media
