IT Services6.10.2024

R38-million for most expensive shack in South Africa

An official for the Dr Ruth Segomotsi Mompati District Municipality has reportedly asked forensic investigators appointed to scrutinise a dodgy R38-million call centre contract to change the findings of their reports.

City Press reports that two findings documents prepared by two different law firms pointed to organised crime, corruption, and cover-ups at the municipality.

One report, prepared by Motshabi Attorneys, specifically looked into the joint venture appointed to erect a prefabricated call centre in what has been called “the most expensive mkhukhu” (shack) in South Africa.

Details of the overpriced call centre shack erected in Vryburg first emerged in November 2023 when several sources at the municipality complained about tender irregularities.

They alleged that an exorbitant amount had been spent on a small prefabricated building despite having a working call centre on the same premises.

There were also allegations that a high-ranking official at the municipality was related to the owner of one of the companies in the joint venture working on the project.

The attorneys’ reports appear to have confirmed this, stating that a family who was well known and well connected in the area was implicated in the tender irregularities.

In addition to the R38.753 million cost of erecting the prefabricated structure, the joint venture also reportedly billed R1.4 million in monthly fees for the equipment needed to run the call centre.

The monthly invoiced amounts for the call centre equipment included the following:

  • R258,974 for eight Lenovo desktops;
  • R524,435 for car radios in the emergency vehicles;
  • R324,566 for handheld walkie-talkies;
  • R3,758 for eight mice;
  • R6,800 for eight keyboards;
  • R36,952 for eight “Logic Pro” headphones;
  • R16,253 for one Huawei Router; and
  • R24,910 for fibre and Internet

Municipal manager Itumeleng Jonas hit back at the report last year, stating that the prefabricated building was only a temporary structure.

He said the contract’s total value to build, operate, and maintain the call centre over three years was R38 million.

The construction cost of the final structure and the salaries of the call centre staff are included in that price.

However, it did not include the price of the temporary building, which Jonas said had to be built quickly because there was not enough space for the contracted workers in the old call centre.

Jonas said the municipality got the building for “free” from the service provider, but was itemised on the municipality’s books as worth R700,000 for accounting and insurance purposes.

Jonas also tried to justify the seemingly excessive equipment cost by saying it included the price of the insurance of the assets.

“If the asset is broken down, they replace that asset for ‘free’ for the municipality,” Jonas said.

City Press’s images showing the inside of the “call centre” provided more details on some of the equipment acquired.

At least one of the Lenovo desktops appeared to be a decade-old all-in-one computer called the ThinkCentre M71z.

This model is no longer on sale, and MyBroadband could not find secondhand models online at the time of publication.

However, we did find a slightly newer M73z available from Computer Emporium for R5,995.

The municipality is paying about R32,372 for its machine, 1,827% more than the price for a newer model we found online.

An additional R26,377 for maintenance and insurance should immediately arouse suspicion.

Jones alleged that when the municipality checked the market price of the machine, it was R15,000 to R25,000.

Even a premium of R7,372 for maintenance and insurance, based on the upper end of that estimation, is high.

Nearly a year later, the forensic investigators have completed their work and complained that they have not been paid.

One of the law firms alleged that Jonas had concealed its final forensic report and told the council they had not submitted it, yet wanted to be paid for its work.

They also said Jonas had asked them to change the findings and recommendations of their final report so those implicated in corruption were instead exonerated.

After they refused to alter the report, they say Jonas refused to pay its invoice.

Municipal spokesperson Joseph Motlhasedi told City Press that all the forensic reports had been submitted to the council on 10 September 2024.

He denied that Jonas had tried to influence the investigation or mislead the council, saying the forensic reports contained inconsistencies.

Motlhasedi confirmed that one service provider had sued the municipality and said they would defend against the allegations.

MyBroadband contacted Motlhasedi for comment, but he did not respond by publication.

Jonas could not be reached for comment.

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