DA heads to court to reverse ‘suspicious’ multi-billion ANC broadband tender

08 March 2018 - 07:00 By Siphe Macanda
Those close to the developments told TimesLIVE that the DA administration was suspicious of how the tender was awarded.
Those close to the developments told TimesLIVE that the DA administration was suspicious of how the tender was awarded.
Image: 123RF/maroti

A multi-billion rand City of Tshwane broadband tender is at the centre of a legal spat between the DA administration and businesses vying for the rolling out of the 18-year-long lucrative contract.

The tender‚ which was awarded by the previous administration in 2015 to Altech Radio Holdings‚ is now subject of a high court battle set for May 22. 

Those close to the developments told TimesLIVE that the DA administration was suspicious of how the tender was awarded. 

“The ANC caucus also thinks the DA wants to elbow the initial bid winners with their own people. It’s a political hot potato‚” one source said.

The contract is now in limbo following a decision by the Solly Msimang-led council to put it on ice after establishing alleged gross irregularities.

In 2017 the city lodged two court applications – one an urgent application to suspend the contract‚ and a main application to review and set aside decision taken by the erstwhile city leadership to award the tender. The urgent application was struck off the roll for lack of urgency in September 2017‚ paving way May’s court battle.

The broadband project was part of Tshwane’s plans to extent its 500km fibre network and turn the metro into an “Integrated Smart City”.

A decision was then taken that an additional 1‚500km will be added to the grid. This would help enable faster internet connections‚ a better CCTV security camera network and boost tourism. The smart city network included combining fibre optic and wireless technology‚ which will target business nodes and poor areas.

At the time‚ the city committed to paying R320-million per year as an “off take amount” to the winning bidder. However‚ because the city’s budget did not provide for the project‚ the winning bidder would have to raise funding for complete implementation of the project.

TimesLIVE understands that the Development Bank of Southern Africa then committed R4.4-billion rand to assist in funding the project.

But the city now wants that decision to be reviewed and sent aside because of irregularities and maladministration. In its founding affidavit‚ the city alleges that the processes followed for the awarding of the tender were flawed‚ there was interference from officials and there were irregularities during the bid committee evaluation process.

“There was failure by the [City of Tshwane] to comply with law and discharge obligations which is violation of its constitutional duties‚” part of the affidavit reads.

Asked about halting of the project‚ mayoral spokesman Samkelo Mgobozi said that continuation of the project would be irregular.

“In December 2016 the Auditor-General declared the Tshwane Broadband agreement to be irregular. The AG finding meant‚ and still means‚ that every rand which we would spend on the Tshwane Broadband deal would be declared irregular. Moreover‚ no money had in any event been budgeted by our predecessors for this obligation‚” Mgobozi said.

He said that subsequent to an internal investigation‚ a number of breaches of the Municipal Finance Management Act were found beyond the AG’s findings.

“We believe that if the deal had been subjected to lawful scrutiny‚ including proper public participation as contemplated by section 33 of the [Municipal Finance Management Act]‚ it would never have been approved by the City council‚” Mgobozi said.

Contacted for comment Altech Radio Holdings Managing Director Brett Nash referred all questions to the company’s responding affidavits filed in the North Gauteng High Court.

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