R1-billion transport contract awarded to official’s family members

The City of Johannesburg (CoJ) has awarded six transport tenders to politically-connected families despite concerns from the Auditor-General (AG).

The AG recently reported that the CoJ had awarded R972 million in family-linked tenders; however, the city has defended its actions, stating that it sees no issue with the appointment.

COJ spokesperson Nthatisi Modingoane confirmed that the metro government will not investigate the tenders.

“There is no regulatory provision that prohibits the Municipality to award contracts to the category of people in question (spouse, child or parent of a person in service of state either actively or in the past twelve months). Therefore, the question whether the City failed in oversight and due diligence is misplaced,” said Modingoane.

The six tenders were all allocated to the family of either a city official or a city councillor for the extension of the BRT/Rea Vaya bus system in 2023, according to a report from Daily Maverick.

The extension of the bus service is eight years behind schedule, and the city failed to meet a final deadline at the end of 2024.

However, while the COJ claims there is no wrongdoing on its appointment of the contracts, the AG has taken a different view.

“Although there is no legislation that prohibits municipalities from making awards to suppliers in which close family members or business associates of employees or councillors have an interest, such awards create conflicts of interest for these employees or councillors and/or their close family members or business associates,” said Auditor-General Tsakani Maluleke.

“The possibility of undue influence cannot be discounted, especially if the person could have influenced the procurement processes for these awards, potentially creating opportunities for irregularities.”

Modingoane confirmed that the tenders were made for the BRT/Rea Vaya extension, but provided no further explanation other than to say that the connected council official had not sat on the award decision.

When asked whether the contracts would be rescinded or investigated, the COJ stated that such a move would not be possible.

“To rescind such an award will be unlawful and the Municipality will be exposed to litigation risks as a result,” said Modingoane.

He further argued that the city had followed all necessary protocols by disclosing the transactions in its annual financial statements, and that no further investigation would be needed.

A failing transport service

The BRT/Rea Vaya was launched in 2009 and co-owns two companies that run the bus service – PioTrans and Litsamaiso.

In exchange, the city pays the service for trips made, but it has encountered several issues since launch.

Maluleke highlighted that the project’s “Phase 1C” expansion has been poorly executed, with bus terminals that lie empty as a result of corruption, ineffective governance and planning, procurement, and contract management, and a lack of accountability.

The company was meant to grow in tandem with the city as it expands north, creating transport solutions for individuals trying to take advantage of new job opportunities – something that should have doubled the size of the BRT/Rea Vaya bus service.

Instead, this project is eight years behind schedule and the Johannesburg Development Agency failed to uphold its pledge to get the service running by the end of 2024.

Daily Maverick reported that it regularly checks on the new routes to assess their progress, which is still far from complete.

Gauteng MMC for Transport Kenny Kunene stated that he had not heard anything about the controversial R972 million tenders.

He said that he would investigate the matter, revealing that when he took office in 2021, another R23 million had been stolen from the BRT and that officials had been suspended, only to be reinstated after the ANC intervened.

He then added that they later exited as part of an anti-corruption plan.