Mayor Moya addresses R26 billion in assets under construction and company blacklisting

The City of Tshwane has embarked on a process to blacklist at least eight underperforming companies that led to irregular and wasteful spending, as part of efforts to address concerns raised by the Auditor-General (AG) regarding R26 billion worth of assets under construction. 

Mayor Nasiphi Moya said she was not in position to name and shame the implicated companies at this stage “because the (blacklisting) process is not concluded as yet”. 

She said: “What you will find in the process of blacklisting is a back-and forth process between the city and the companies. The company may respond and based on our policies we may find that they have good reasons. Sometimes it happens that we don’t pay companies on time and so we don’t want to assume that these eight companies will be successfully restricted until that process is done.” 

During her recent State of the Capital Address, Moya expressed the city's plan to bar companies with a history of poor performance from conducting business with the Metro.

She explained that prior to the blacklisting the city follows a thorough process, guiding companies through various steps before ultimately terminating their contracts.

“The termination process goes to our Bid Adjudication Committee (BAC) and once it gets to the BAC to say we are terminating this contract because of poor performance, then for us that is one thing in terms of our policies we are using in the city to restrict companies,” she said.

She said the companies in question will likely be categorised under either irregular expenditure or wasteful expenditure due to poor project management practices.

“So, in the main, these are the companies that said to us when they were bidding we are capable of completing the project only to find out that they were incapable of doing it, hence we have assets under construction that is over R26 billion. What has been raised by the AG is that we must start dealing with assets under construction,” Moya said.

She cited a recent case involving a company appointed in 2011 to install a sewer system in Marokolong in Hammanskraal township at a cost of R125 million, but it failed to deliver the project successfully.

“We were writing off that project as wasteful expenditure and that community still doesn’t have a functioning sewer, and that company is also on the list,” she said.

In March, the mayoral committee approved a list of eight companies that could potentially be blacklisted.

“From the side of the City we are restricting and then we hand over to the National Treasury for the blacklisting process,” Moya said.

Last year, the city announced that it had initiated a process to blacklist companies linked to businessman Edwin Sodi due to their poor performance on the Rooiwal wastewater treatment plant refurbishment project.

Moya explained that the city's initial submission to the National Treasury regarding Sodi's companies was delayed due to procedural issues.

“The process that we followed didn’t meet the requirements and they told us what to do. We then resubmitted to the National Treasury responding to those requirements. We are now waiting for the National Treasury.

"One of the issues that they mentioned is that we didn’t issue a notice to the director because the company was no longer at the address where it used to be; that was the issue. We then went to another address to issue the notice. We are still waiting for them,” she said.

In February, the Treasury clarified its role in restricting suppliers, saying it does not  make the decisions itself, but instead, it reviews the process followed by entities like the City of Tshwane to restrict suppliers.

“The National Treasury does not make decisions but rather assesses the process that was followed to restrict suppliers, which has been conducted by the City of Tshwane. If all the steps in the restriction process have been done correctly, then National Treasury adds the suppliers to the restricted/blacklisted supplier’s database,” it said.