Govan Mbeki Municipality sacked Ideal Prepaid Solution, a company contracted as an electricity vendor.
The executive mayor, Mnr Mr Nhlakanipho Zuma, said the council decided to terminate the contract of the company that was selling prepaid electricity on behalf of the municipality.
The council took this decision during their extraordinary virtual council meeting on Friday, July 16. The mayor said the contract was terminated because the correct processes were not followed when the company was appointed.
“The contract that was signed is illegal and we cannot continue to service this illegal contract. We advertised for a revenue enhancement strategy service but we got something that is called a rental agreement.
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“We don’t want to rent anything, we want to buy a service that will assist the municipality in bringing in revenue, which didn’t happen and we ended up a with serious loss of revenue,” said Mr Zuma.
He said the municipality lost about R9-million income and they, therefore, decided to terminate the contract. The mayor said they even took the matter to court to set aside the contract, but the process was taking too long and the municipality continued to lose money.
Mr Zuma said this same reasoning applied when the suspended municipal manager’s contract was terminated.
“We decided to part ways with our municipal manager, Mr Felani Mndebele, because we were unable to continue spending more money on his court case. We decided to part ways with him so that we assist the municipality in cutting costs.
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“The important thing to know is that there is a lot that was incorrect and not correctly done. He disputed the processes of the disciplinary hearing which are part of his employment contract. That is why we ended up terminating his contract,” said Mr Zuma.
During the most recent virtual council sitting it was acknowledged that civil litigation was initiated in the Mpumalanga High Court in Middelburg to review and set aside the appointment of Ideal Prepaid Solutions.
The company is defending the matter which will thus prolong finalising the matter. The council acknowledged that the municipality is suffering declining revenue on prepaid electricity vending and the installation of prepaid electricity meters are delayed while the matter is unresolved.
The council also decided to issue the company with a notice to terminate their services and it was agreed that all supply chain processes and regulations will be followed when appointing a new service provider to deliver revenue enhancement strategies for the municipality.
The mayor said they are going to follow the law and all due processes in appointing such a company, as well as a new municipal manager.
Mr Mndebele said he received his employment termination letter from the municipality and his lawyers also wrote to the municipality seeking reasons for his dismissal. His legal team also wants the municipality to agree that they are in contempt of a high court order.
