Tiff over Mashaba’s tweets…and the R140-million contract behind it all

The Johannesburg High Court on Thursday dismissed an urgent application by a construction company to interdict executive mayor Herman Mashaba from tweeting about its contract with City Power.

The company‚ Setheo Engineering‚ also sought to interdict Mashaba and the City of Johannesburg and any of its employees from tweeting or issuing media statements about the allegedly corrupt contract until such time as the investigation by the Hawks into the matter has been finalised.

But an affidavit that forms part of the documentation handed to the Hawks and written by City Power director of finance Quentin Green has revealed that just over R65-million has been paid to Setheo so far for the building of a new electrical substation in Eldorado Park‚ south of Johannesburg.

The contract is worth R143-million in total and was awarded to Setheo in 2015.

The payments‚ the affidavit says‚ were in contravention of City Power regulations governing payments to service providers which state that work done must first pass muster and be assessed by officials before payment can be effected.

City spokeman Luyanda Mfeka confirmed that two City Power officials‚ both project managers‚ have been suspended as a result of alleged irregularities regarding the contract.

Mfeka also stated that further payments requested by Setheo were being withheld. Mashaba tweeted twice about the alleged corruption surrounding the contract - the first during a visit to the site saying “very little” of the work paid for had been done. Four days later‚ on Monday‚ he tweeted again‚ attaching a picture of the signboard on which Setheo’s name appears.

Setheo argued the tweets‚ when read together‚ were defamatory and had led to business partners questioning whether Mashaba’s statements were about them. They also argued that Mashaba had not consulted them before simply declaring the contract corrupt.

But Judge AJ van der Westhuizen did not agree‚ saying the argument did not have merit.

“It has not been shown by the applicant that any reasonable reader would have read them together‚” he said.

He also ordered that Setheo pay costs.

“A founding affidavit has been submitted to the Hawks on the matter. The investigation is ongoing. Last week‚ the Mayor requested the Hawks to provide feedback on the investigation which we are awaiting‚” Mfeka said in response to questions sent to Mashaba.

“With respect to suspected corruption in relation to the Eldorado Substation‚ two City Power senior officials who were project managers‚ have been suspended to date. Further to this‚ payments requested by the contractor are currently being withheld by the power utility. The contractor in question has a number of other maintenance contracts with City Power‚ the most significant of which is the restoration contract for the Hopefield substation‚” Mfeka said‚ adding that Mashaba considered corruption “public enemy number one”.

Setheo meanwhile told The Times that “someone was taking a very naïve and simplistic view of a complex project” with many moving pieces.

“Engineering projects differ in terms of proportions of work onsite and offsite. On the Eldorado case‚ 80% of the work is off site with a huge component being imported equipment‚” Setheo said‚ adding that the consultant appointed by City Power to oversee the project had drafted a letter confirming that the work done so far‚ on and off site‚ “in fact exceeds the R65-million paid by City Power”.

“All payments made to Setheo Engineering by City Power were in line with the NEC contract governing the engagement between the two. Whilst we will deal with specific payments in detail‚ take note that transformers that are on site in Eldorado are worth over R40 million‚” Setheo said.

“We have equipment that we have ordered and not yet delivered on site but proof from the suppliers that it has either been fully paid for or partially paid.

“All payments made to contractors by City Power are verified by an independent consultant appointed by City Power to ensure that all claims being made by the contractors are in line with their policy. It is therefore quite surprising to us to be learning through social media that we are corrupt‚ inept and untrustworthy‚” Setheo continued.

Setheo also denied that some sub contractors had not yet been paid‚ saying work had stalled at the site because City Power stopped paying them in October 2016.

“The last payments were made by City Power directly to the sub contractors with our consent. It is correct that work on the project has stalled due to non-payment of our invoices by City Power since October 2016. We have thus this far carried the project using our own resources.”

Setheo further contended they were in “utter shock” after finding out via social media they were under investigation by the Hawks and sent The Times numerous photographs of equipment in storage it says has been paid for already.

“Our main challenge is the non- payment of our invoices by City Power and the domino effect it has had in our value chain of suppliers‚ employees and clients‚” Setheo said‚ saying it remained committed to finalising the project.

- TimesLIVE