This afternoon, I was informed of two City Power officials, Maete Thoka and Godfrey Mulaudzi who were arrested by members of the Hawks and appeared in the Johannesburg Commercial Crimes Court today on charges of fraud and corruption.
The pair was granted bail of R15 000 each and will appear again in court on Monday, 16 October 2017.
Thoka and Mulaudzi are accused of involvement in alleged corruption relating to a contract awarded in 2015 for the construction of a new substation in Eldorado Park, worth R144 million. The contract was awarded in 2015 to Setheo Engineering.
An investigation conducted by the City’s Forensic and Investigation Service department uncovered that, in February, almost R66 million was paid to the service provider without any physical work done.
It is alleged that Thoka and Mulaudzi who were both project managers, colluded with officials from Setheo Engineering and ensured that invoices that were submitted were paid without any physical work done on the substation.
The officials were suspended in June 2017 and a criminal case was opened with the South African Police Service (SAPS).
These serious allegations of corruption were initially brought to my attention after employees of sub-contractors connected to the construction project protested against Setheo and threatened to burn the substation down.
Community leaders of Eldorado Park and surrounds prevented the attempted destruction of the substation, which is used to supply electricity to Eldorado Park and surrounding areas.
Making matters worse, Setheo was awarded a similar tender worth R44 million to conduct work at Hopefield Power Station.
The contractor has been paid R22 million by the City to date. Despite this payment having already been made, only an estimated R1.5 million worth of work has been done.
The failure to deliver on the work has severely compromised the delivery of stable electricity to the affected communities.
Last week, I was informed that a full report based on the investigation conducted by the City’s Group Internal Forensic Investigation Department on this matter will be presented to me soon.
In the interim, I have instructed that the following action be taken:
- The City will host public meetings following my receipt of Forensic Investigation Department’s report in order to engage with the effected communities of its content;
- Criminal action is to be instituted against all individuals and/or companies found to be involved with malpractice per the report. This includes members of the previous administration’s leadership who may be found to be implicated;
- Civil claims are to be instituted against these individuals and/or companies named, including the previous administration’s leadership who may be found to be implicated;
- Internal disciplinary action is to be taken against all implicated officials;
- The city is to acquire legal advice on terminating our existing relationship with the service provider; and
- Legal advice is to be obtained on the appointment of a new contractor to immediately continue with work at both substations.
Corruption has no place in this administration and we will work tirelessly, and in collaboration with institutions such as the Hawks, to ensure that the residents of Johannesburg receive the quality services they deserve.
— Cllr Herman Mashaba, Executive Mayor City of Johannesburg