Rustenburg municipality faces R150 million lawsuit over unauthorised contract

Rustenburg municipality in North West could be facing at least a R150 million lawsuit from an aggrieved contractor after a junior official signed land allocation documents and a service level agreement with a company without authorisation from his boss, the municipal manager.

In a municipality, every contract must be approved and signed by the municipality, after approval by the council.

Municipal manager impersonated

A unit manager allegedly decided to impersonate the municipal manager and appended all documents relating to the project, including land allocation and service level agreement for the provision of water and sanitation and electricity on behalf of the municipality.

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The unnamed company is well advanced with the project, which is now at 70%. However, it has emerged the contract was illegal because the official was not authorised to approve the project or service level agreement.

The firm is now threatening to sue the municipality for breach of contract. A whistle-blower has come forward to question the agreement and accused municipal manager Ashmar Khuduge of colluding with a junior manager, who signed the agreement in perpetrating corruption.

The whistle-blower also claimed the individual was still not suspended by Khuduge, despite having no authority to sign the agreement.

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The official who signed the agreement later confessed and Rustenburg faces possible R150m civil contractor lawsuit took full responsibility for the problem and exonerated the municipal manager from any wrongdoing.

Action against municipality

In a response to the allegations, Khuduge said he received the complaint from the whistle-blower about an illegal land allocation. He denied the allegations and dismissed the whistleblower’s complaints.

However, Khuduge said on 6August he tasked a law firm to conduct an investigation into the allegations made by the whistleblower against the employee and the probe was ongoing.

“Upon receipt of the complaint and after having applied my mind I thought it prudent that an investigation should be conducted into the said allegations,” Khuduge said.

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A member of the South African Municipal Workers Union (Samwu), a union organised at the municipality, Mpho Sebego, demanded that action should be taken against the official, whose name is known to The Citizen, but is being withheld.

“As Samwu members we condemn any act of corruption at the municipality. “We need consequence management against the official implicated,” Sebego said.

“We are happy that the municipal manager advocate Ashmar Khuduge has been absolved from all this corruption.

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“He is a man of integrity who is a friend of the working class. We hope he can now focus on service delivery issues affecting our communities.”