Allegations of financial mismanagement in the Mbombela Local Municipality have been under scrutiny for several years.
Concerns over corruption, fraud, irregular tender processes, maladministration and violations of the Municipal Finance Management Act have prompted further investigation.
This week, the Special Investigating Unit (SIU) announced that President Cyril Ramaphosa has tasked them with conducting an in-depth inquiry into the municipality’s financial affairs. Reports indicate that, dating back to 2017/18, significant funds were allegedly misappropriated.
ALSO READ: City of Mbombela Local Municipality needs R214m to upgrade the current electrical infrastructure
The investigation will examine the potential involvement of municipal management, staff and political figures in irregular activities. Ramaphosa’s proclamation grants the SIU the authority to investigate serious maladministration linked to seven tenders, covering multiple municipal projects.
Among the focal points of the investigation is the establishment of the Strategic Programmes and Projects Support Unit (SPPSU). This unit was formed under the office of a former municipal manager and reportedly oversaw various development projects, including plans for an international convention centre (ICC), a fresh produce market and a cultural hub. However, most of these projects never materialised, except for the fresh produce initiative, which was outside the scope of local government.
Documents reviewed by Lowvelder suggest that the SPPSU directed the appointment of a subcontractor under unclear circumstances, expanding an original bid to include additional feasibility studies. These studies reportedly covered stadium management, smart metres, waste management, civil works and municipal office accommodation.
ALSO READ: Power outage update: Faulty cable disrupting Mbombela’s power still not located
Further records indicate that feasibility studies were also conducted for projects related to the Mpumalanga Fresh Produce Market, the ICC, the Mpumalanga Cultural Hub, the Mbombela Special Economic Zone, the Mpumalanga Division of the High Court and various industrial parks. Additional studies explored a public transport infrastructure programme, informal settlement upgrades, water concessions and city improvement initiatives.
Despite allocations for these studies, only two completed reports – on stadium management and smart metres – were found in municipal documentation.
According to reports, R13m was spent on the stadium management study and R8m on the smart meter project.
According to the reports, the appointed contractor received over R50m for their work, while the subcontractor was paid R42m. Internal audits indicate no significant economic benefit or deliverables were produced for the amounts spent. The SIU aims to determine how the second contractor was selected and why a direct payment agreement was authorised without council approval.
DA councillor Sanley van der Merwe, who has actively pursued investigations into tender irregularities, highlighted concerns about the stadium management report presented to the council. She stated that the document closely resembled previous reports compiled during the initial planning phases of the Mbombela Stadium.
“It took nearly three years for the municipality to acknowledge that this extended contract existed,” Van der Merwe said. “The lack of transparency and avoidance of oversight strongly suggests irregularities.”
She also confirmed that a case had been filed with the Hawks, but after a year of updates, the investigation ceased without explanation.
Kaizer Kganyago, the spokesperson for the SIU, stated that findings from the probe would be submitted to law enforcement agencies if serious irregularities were discovered. The SIU has the authority to initiate civil action through the high court or a special tribunal to address financial mismanagement and recover any lost municipal funds.
Municipal spokesperson Joseph Ngala said the council was unaware of any investigations handed over to the SIU and noted that only two of the seven tenders appeared to involve the Mbombela municipality.
Van der Merwe expressed disappointment that, despite years of council enquiries and recommendations for further scrutiny, Ngala continues to deny knowledge of the contracts, despite having commented on them publicly in the past.
