‘Legal is not always right’ says expert about telephone contract
‘What is legal is not necessarily what is right, especially if you cannot justify the price and scale differences from what the market has indicated.’ This was the opinion of Dr Len Mortimer from the School of Public Leadership at Stellenbosch University regarding the infamous municipal telephone contract.
‘What is legal is not necessarily what is right, especially if you cannot justify the price and scale differences from what the market has indicated.’ This was the opinion of Dr Len Mortimer from the School of Public Leadership at Stellenbosch University regarding the infamous municipal telephone contract.
The Herald has repeatedly reported on the telephone contract to the tune of R10 million that the municipality has awarded. Initially, Dr Blaai-Mokgethi, the municipal manager, rubbished the claims that there was anything wrong with the awarding of the contract. Hans-Jurie Moolman, the DA caucus chairperson, complained about the contract stating that it had not been budgeted for, tender procedures had not been followed and it was done without consulting the council. Mokgethi argued that it was on legal advice that the normal tender procedure was not followed. ‘We realised that a contract for similar work had already been awarded to a contractor in Ventersdorp; the legal opinion was that we should extend the work of that contractor to include Tlokwe and, thereby, avoid duplication of work,’ she said previously. The Herald launched its own investigation into the amount that was paid for the contract.
According to various sources within the industry, R10 million was an absurd amount to pay for this system. Quotes obtained from four other businesses came to between R2 and 3 million.
According to Blaai-Mokgethi, NW405 Municipality asked the Rustenburg municipality for their opinion as they were also upgrading their telephone system. They noted that the amount was reasonable. One company that gave the Herald a quote of R3,2 million noted ‘It’s really excessive from our side, we would be making very good money on this.’
Another quotation recently obtained by the Herald through Du Pont Telecommunications, a leading provider of telecommunication systems based in Johannesburg, came to about R2 million including industry related profit margins.
The Herald asked Dr Len Mortimer for his opinion on the handling of this contract. According to him, a municipal manager may use regulation 32, the so-called ‘piggy-back’ clause, to procure goods or services for the municipality or municipal entity under a contract secured by another organ of state. ‘When going this route, there should be demonstrable discounts or benefits for the municipality,’ he said. According to him, it does not make sense that a municipality would use a small award tender, such as the one in Ventersdorp, to award a larger tender as it is a given that larger tenders attract more competition.
‘The piggy-back clause is to be used
only when it has a real financial benefit.
My view is that the market should
have been tested afresh as it is not in
the ratepayers’ interest to extend contracts
or piggy-back when greater
competition would have benefited Tlokwe’s
ratepayers.
‘The original contract was between Ventersdorp and the service provider and my view is that this in no way obligates the amalgamated authority to use the same service provider as the scope of the original tender has changed substantially. Extending a contract to this extent would actually be against the better judgement of most accounting officers. When asked for a technical report regarding the contract, Victor Boqo, the mayoral spokesperson stated that, in light of the Rustenburg municipality’s opinion, no further investigation will be done. Answering previous questions about where the money for the upgrade would come from, Blaai- Mokgethi said that Cogta (Ministry of Cooperative Governance and Traditional Affairs) had made a R13 million amalgamation grant available for any expenses relating to the merger. At the time of going to print, Cogta had not yet confirmed whether or not this upgrade constitutes an amalgamation expense.
https://www.citizen.co.za/potchefstroom-herald/33620/r10-m-telefoon-kontrak-waarde-vir-geld/
https://www.citizen.co.za/potchefstroom-herald/34615/telefoonkontrak-billik-se-munisipale-bestuurder/
https://www.citizen.co.za/potchefstroom-herald/29807/niks-fout-met-telefoonkontrak-nie-se-munisipale-bestuurder/
https://www.citizen.co.za/potchefstroom-herald/29731/r10-miljoen-telefoonstelsel-vir-munisipaliteit/
