Knysna Municipality to be investigated for fraud, corruption

Following a request by Cooperative Governance and Traditional Affairs (Cogta) Minister Nkosazana Dlamini-Zuma to investigate allegations of fraud and corruption within Knysna Municipality, local government MEC Anton Bredell had given the municipality until Wednesday, 8 July to provide answers to the 16 allegations mentioned therein.

The letter was prompted by correspondence from Dlamini-Zuma, dated 20 May, requesting Bredell to investigate allegations brought by community organisation Knysna United.

Copies of both letters are in possession of Knysna-Plett Herald and have been confirmed by Bredell’s office.

Bredell requested the municipality to provide information and documentation in order for his office to assess whether there might be a reason to believe that the municipality is not fulfilling its statutory obligations or that maladministration, fraud, corruption or any other serious malpractice has occurred or is occurring.

The letter, addressed to Knysna speaker Mertle Gombo, highlights an alleged irregular business deal with one supplier CC, by virtue of which the municipality allegedly spent R113 million on prepaid water meters at inflated prices without any prospects of recovering such expense.

“It is alleged the meters purchased exceeded the demand required and many water meters are currently in storerooms and not installed. It is alleged that this expenditure amounts to irregular or fruitless and wasteful expenditure.”

According to Bredell, the auditor-general (AG) made an adverse finding against the procurement but the municipality proceeded with the procurement stating they forced the meters onto poor and vulnerable communities, while not doing the same in the affluent areas.

Other allegations in the letter include:

• Irregular procurement process followed in Tender No. T03/2019/20, regarding the construction of concrete slabs and top structures in Hornlee, and the role of the CFO Mbulelo Memani as chairperson of the bid adjudication committee (BAC).
• Irregular procurement process followed in Tender No. T06/2019/2020, regarding the Hornlee sewer upgrade. It is alleged that this tender was advertised shortly after the cancellation of Tender No. T41/2018/19, which was allegedly awarded, but the CFO allegedly recommended the reversal of the award, which was allegedly sanctioned by the municipal manager.
• Maladministration relating to the mismanagement of the fire emergency donations.
• Maladministration requiring the municipality to apply for a loan of R71-million from the Development Bank of Southern Africa (DBSA) to cover up shortfalls in other projects.
• Irregularity sprouting from the municipality’s alleged failure to refund electricity customers, who were charged more than the regulated Nersa rate.

Bredell’s spokesperson James-Brent Styan said the correspondence to the speaker was to inform the municipality of the allegations and to afford it an opportunity to comment on such allegations.

“That is where the process is at the moment, we await feedback from the municipality,” he said. Municipal spokesperson Christopher Bezuidenhout confirmed that the municipality “is in the process of collating factual and accurate information to respond”.

Knysna United chairperson Ralph Stander was adamant that “all those who are implicated must be held accountable”.

The Knysna Ratepayers’ Association said they were “heartened” by these latest developments.

“Having been the target of verbal abuse and a total freeze-out by former acting MM Gratz to avoid dealing with our complaints against CFO Memani and others, we are heartened to see that … Bredell is finally taking our complaints about corruption seriously.”

This article first appeared on Knysna-Plett Herald and was republished with permission.

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