Consultants working for an engineering firm hired by the City of Tshwane at R400m a year are using a prime city-owned building and all its resources for free.
GladAfrica is managing Tshwane's infrastructure projects in a three-year contract and with a budget of about R12bn. It has 30 consultants based in the city's Infotech building in the suburb of Hatfield.
The consultants work in marketing and communications, systems planning, operations, legal, and finance. One of the projects is the city's A Re Yeng bus rapid transit system.
Some consultants charge up to R4,000 an hour yet all use the resources in the municipal building, including telephones and internet, without paying.
An invoice submitted by the company in June shows that GladAfrica charged the city R14.8m for the month.
The Sunday Times reported last week that since November GladAfrica had billed R250m for work in the city's roads and transport division.City manager Moeketsi Mosola ignored warnings from the city's CFO and other officials as well as legal advice not to hire the consultants, it is alleged.
Mosola this week defended his decision, but city insiders said it was difficult to verify the consultants' billing hours.
The sources said that in the past consultants would produce time sheets that would be approved by senior officials before payments were made.
This had not been the case with GladAfrica, they said.
"There are no time sheets, they just bill directly. They can claim for hours they have not worked," said an official.The city said the arrangement was necessary for integration and skills transfer.
"The nature of the contract and project management discipline in general requires integration of client and project management teams to foster integration and for ease of work, which could otherwise be hindered by teams being located in different offices. This is normal practice," Mosola said.
GladAfrica referred questions to the city.
Umar Banda, the city's CFO, had advised against contracting GladAfrica through a deal that guaranteed the company 10% in project management fees. He said it was against regulations to take money meant for building roads, clinics and maintaining other infrastructure to pay commissions to consultants.
In a report prepared for Tshwane's executive adjudication committee, which would decide whether to award the contract, Banda said that because GladAfrica was charging 10% in project management fees, it would be guaranteed R377m of the R3.7bn budgeted for capital expenditure in the 2018/2019 financial year, and R422m of the R4.2bn set aside for capital projects in the 2019/2020 financial year.
The fees due to GladAfrica would have to be ring-fenced by the departments that needed building or maintenance work done.
Banda pointed out that project management services provided by GladAfrica were operational in nature and so the fees charged by the consultancy could not be taken out of Tshwane's capital budget, which was to be used strictly for infrastructure projects."Taking the above into consideration, the group financial services department cannot support the ring-fencing of capital expenditure budget to fund the services of a professional service provider for project management services," he said in the report.
Mosola, however, ignored this. He also dissolved the same executive adjudication committee after it had advised against the move and replaced it with a new committee.
Mosola denied that he dissolved the committee, saying he only changed its name from executive adjudication committee to bid adjudication committee, in line with legislation. New officials were added to the committee, he said.
Tshwane mayor Solly Msimang said he has instituted an investigation of the contract and this would determine what steps he would take.
ANC Tshwane chairman Kgosi Maepa has called on the city to suspend Mosola pending the outcome of an investigation of the awarding of the contract. Such an investigation should be conducted by the public protector, the party said...