A forensic investigation has uncovered serious irregularities, poor oversight and questionable spending in the R166-million Rocky Park Housing Project in KwaDukuza.

Presented in-committee in council by the KZN Office of the Premier on September 25, the report follows years of stalled construction and allegations of fraud in the development, which was initially approved for planning in 2008, with implementation beginning in 2010.

The project aimed to deliver 350 community residential units, 73 low-income houses and 350 finance-linked subsidy homes to address KwaDukuza’s low-cost rental housing needs.

In 2010, the municipality appointed Simsi Construction and Project Management as the implementing agent. However, the forensic report found the appointment to be irregular and unlawful.

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Simsi was hand-picked through a deviation from standard supply chain processes, justified by urgency and previous contracts.

Auditors discovered Simsi lacked the required Construction Industry Development Board (CIDB) grading, qualifying only for contracts worth up to R650 000, far below the project’s R166-million value. Despite these red flags, Simsi was appointed without a proper budget estimate or reference checks.

Between 2012 and 2017, Simsi received R141.5-million, yet payment vouchers could only account for R99.8-million. Millions were spent on items not in the approved model, including R13.6-million for built-in cupboards and stoves, R572 670 for DStv installations and R35.7-million paid after the contract expired in 2013 without extension.

By the time the KZN Department of Human Settlements terminated the contract in 2017, only 18 units had been completed, 204 partially built, and 128 not started. A 2023 site inspection found many structures incomplete or unsafe, lacking roofs, plumbing and electrical connections.

The report criticised both the municipality and the provincial department for failing to monitor the project. Despite a tripartite agreement requiring regular inspections, payments continued without proper oversight.

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Recommendations include declaring all payments as irregular expenditure and pursuing disciplinary action against implicated officials. Former municipal manager Mduduzi Zungu was involved in the project’s early planning phase.

Zungu denied any wrongdoing, saying he left KwaDukuza municipality in 2011 to join Human Settlements (his contract at the department has since ended).

“The last time I interacted with the project was more than 13 years ago. We packaged and applied for funding for the planning phase,” he said.

“Communities had fought hard for this project to be prioritised by the municipality. Hence, council supported management decisions that prioritised Rocky Park.”

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He added that this was not the first investigation into the project and hoped council would resolve the ongoing deadlock and complete it.

KwaDukuza municipality spokesperson Sifiso Zulu said he could not comment until the matter had been discussed in council.

Legal action is under way to evict illegal occupants from partially completed units.

Numerous attempts to contact Simsi Construction and Project Management were unsuccessful at the time of publication.

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