Msunduzi ignored tender, paid more

The Msunduzi municipality allegedly ignored a tender it had awarded for the supply of outdoor substations and transformers, and bought some of these items from a Durban dealer at a higher price.

Sources in the municipality said this was an example of why the municipality faced bankruptcy.

"Not only does it ignore its own tender-awarding process, resulting in ratepayers' money being used to fight lawsuits, but it is paying much more than the legitimate contractor would have charged," a source said.

The equipment was delivered to the electricity department's store, but The Mercury understands there was a frantic attempt to have the Durban company remove the equipment, to cover up the matter.

The material delivered had allegedly not met the specifications of the tender.

It was also suspected it was second-hand equipment, whereas the tender called for new equipment.

The tender for the substations and transformers was put out in May 2008, and it was awarded to a Pietermaritzburg company.

It had quoted R290 400 for the supply and delivery of a single ratio transformer substation and R46 310 for a pole-mounted transformer.

However, in February, a senior municipal official issued an order form for the same products from a Durban company that charged them R300 000 each for the transformer substation.

Two were purchased, while eight of the other type of transformer, costing R75 000 each, were bought.

The municipality paid R1.2 million for the items, which would have cost R951 280 had it bought them from the company that initially won the tender.

A source said that with the tender in place, the municipality was not permitted to purchase any of the items in the tender from another company, as that would amount to a breach in the tender contract.

It was understood that the original tenderer had written to Msunduzi's new administrator, Johann Mettler, and the procurement department inquiring why the municipality bought the equipment at a high price when it already had a contract in place.

The municipality had been informed that it was in breach of the contract.

The contractor, whose name is known to The Mercury, refused to be publicly named or to comment.

Mettler first declined to comment but after being pressed, said: "I am aware of the matter. It is something I am looking into. I really can't say more."

He said the matter was in the hands of the municipality's legal department and that "a comprehensive statement" would be issued today.

The Mercury

Posted at 08:04AM Apr 08, 2010 by Editor in Commercial  |