Construction of VIP toilets and Siyenza Manje update: briefings by Amathole and O.R. Tambo District Municipalities; Input by MISA; with Deputy Minister

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Cooperative Governance and Traditional Affairs

20 May 2021
Chairperson: Ms F Muthambi (ANC)
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Meeting Summary

The Portfolio Committee on Cooperative Governance and Traditional Affairs met with the delegations from Amathole District Municipality and the O.R. Tambo District Municipality, as well as the Chief Executive of the Municipal Infrastructure Support Agency and representatives from the Department of Cooperative Governance and Traditional Affairs (COGTA) to receive a briefing on the progress on the construction of ventilated and improved Pit Latrines in the districts. The Deputy Minister was in attendance.

The main concern of the Committee with regards to Amathole District was with the awarding of the tender, which is a matter that has been subject to investigations by the East London Court and forensic investigations by the Public Protector. This is due to irregularities in the awarding of the tender, as the municipality failed to procure the services in accordance with a system that is fair, reputable, transparent, competitive and cost effective as envisaged in section 217 of the Constitution.

The Municipal Manager of Amathole District told the Committee that after the Public Protector’s report was tabled to Council, the district developed an action plan on how to implement the recommendations by the Public Protector. The action plan was then submitted to the office of the Public Protector, and they accepted it. The district reports to the office of the Public Protector from time to time on the implementation of that action plan. All the recommendations have been implemented, except the two recommendations that will be taken to court for review in terms of paying the service providers, as there is no contractual obligation between the district and the service providers.

The Municipal Infrastructure Support Agency recounted that it had embarked on an open tender process for the appointment of contractors for the supply of all materials, as well as the assembling and installation of prefabricated toilet structures for utilisation in dry and waterborne systems in various areas within the Northern Cape province. Two contractors were successful in that open tendering process, namely the Siyenza Group as well as Chikombe Business Enterprise. The Agency indicated that they cannot be an implementing agent in this matter because the district has appointed the Siyenza Group as the main contractor, but the Agency will support the district with the technical support in line with its mandate through the deployment of its engineers and its teams in the Eastern Cape province. When the revelation of the fraudulent tax clearance came forward, the Agency immediately opened a criminal case of fraud against the Siyenza Group.

With regards to the O.R. Tambo District, the Committee had anticipated that the presentation would also provide all the relevant details around the alleged irregular payments made from the accounts of the District to the Amathole Water Board, which has been the subject matter to the section 106 investigation by the Member of Executive Council of COGTA.

The Executive Mayor of O.R. Tambo district told the Committee that there is a case that has been opened with the HAWKS, whereby the HAWKS are still investigating, but COGTA, through section 106, was investigating the same project with the alleged prepayment.

After the district municipalities presented and answered all the Committee’s questions on these matters, the Chairperson said that the Committee will follow up on the investigations into both matters and will have ongoing discussions in this regard with both district municipalities.

Meeting report

Opening Remarks by the Chairperson
The Chairperson opened the virtual meeting, welcomed the Members and the delegations from Amathole District Municipality and the O.R. Tambo District Municipality, as well as the CEO of the Municipal Infrastructure Support Agency (MISA). She also acknowledged the presence of the Deputy Minister of Cooperative Governance and Traditional Affairs in the meeting.

She said that the first item in the agenda of the meeting relates to the awarding of the tender for supply, delivery and installation of ventilated improved pit latrines by the Amathole District Municipality. This matter has sat before the East London Court and has been subject to forensic investigations, including investigations by the Public Protector. The main problem and the common causes for this is that there were irregularities in the awarding of the tender, as the municipality failed to procure the services in accordance with a system that is fair, reputable, transparent, competitive and cost effective, as envisaged in section 217 of the Constitution. The Committee’s point of departure on this matter is the consequence management instituted in relation to the municipality’s improper conduct and the maladministration in respect of the VIP toilets. The Public Protector’s proposal on this issue was that by September 2019, the District Municipality should have taken appropriate disciplinary actions against all members of the Bid Adjudication Committee, who were involved in the awarding of this tender and exposed the District Municipality to acts of maladministration and financial risks. The Public Protector also ordered that by October 2019, the municipality should have ensured that it had recovered. The Public Protector’s remedial action plan is binding and compliance to this was not optional. The remedial action against those under investigation cannot be cleared without any legal consequences. She said that the Committee understands from the presentation of the District Municipality that the district will be challenging some of the remedial actions from the Public Protector in the High Court, saying that it restricts some of the work that the municipality has done and that they made a report as early as 2019.

She said that the second item on the agenda relates to the O.R. Tambo Districts. She said that the Committee had anticipated that the presentation would also provide all the relevant details around the alleged irregular payments made from the accounts of the District to the Amathole Water Board. This has been a subject matter to the section 106 investigation by the MEC. In the meeting that was held by the Committee with the district on the 21st of August, the Executive Mayor’s presentation indicated that this matter was also under investigation. She said that she hopes that by the end of the meeting, the Committee will have understood the outcomes of that investigation.

She then handed over to the Amathole District Municipality to proceed with their presentation.

Briefing by Amathole District Municipality
Mr Khanyile Maneli, Executive Mayor, Amathole District Municipality (ADM), said that on 21 May 2020 he lost his wife due to COVID-19 complications. He said that he might have some difficulties in terms of the network, as he is connected from his village and is in preparation for the unveiling of the tombstone of his wife on Saturday, 22 May 2020. He said that the district has made a presentation in order to try and respond to the issues that were raised. He then handed over to the Municipal Manager to lead the presentation.

The Chairperson expressed heartfelt condolences on behalf of the Committee to the Executive Mayor for the loss of his wife. She then allowed the Municipal Manager to proceed with the presentation.

Dr Thandekile Mnyimba, Municipal Manager, Amathole District Municipality, said that the Director for Strategic Planning and Management would present on the construction of the ventilated improved pit latrines at Amathole District Municipality.  

Ms Akhona Tinta, Director: Strategic Planning and Management, Amathole District Municipality, firstly provided the background of the project of the pit latrines. She then presented a timeline of the Siyenza Manje Project. Lastly, she provided progress on the implementation of the Public Protector’s recommendations. She said that the District Municipality performs the water and sanitation powers and functions amongst the other powers and functions allocated to it, and as part of the sanitation functions, it is constructing the ventilated improved pit latrines through the Accelerated Sanitation Programme funded through the Municipal Infrastructure Grant (MIG).

Ms Tinta provided the timeline of the Siyenza Manje Contract, which started in 2014 until 2019 in detail, explaining the procurement process, allegations, court cases and the forensic investigations that the district municipality went through during the course of the contract.

In terms of the Public Protector’s report, she said that the report recommended that the district municipality must quantify and pay the service providers the outstanding amounts due where necessary. Regarding the progress to date, she mentioned the consequence management that was undertaken by the district municipality against those who were involved in maladministration, including a Senior Manager of Legal Services and a General Manager of Supply Chain that were suspended and subsequently resigned.

Input by MISA
Mr Ntandazo Vimba, CEO, MISA, made a disclaimer that the matter of the pit latrines is sub-judice and added that he is constrained in terms of the extent that he can go in briefing the Committee. He said that MISA was called by the Committee in 2019 to brief Members on the same issue and MISA did that extensively. He said that in November 2013, MISA embarked on an open tender process for the appointment of contractors for the supply of all materials, as well as the assembling and installation of prefabricated toilet structures for utilisation in dry and waterborne systems in various areas within the Northern Cape province. Two contractors were successful in that open tendering process, namely the Siyenza Group as well as Chikombe Business Enterprise. In and around April 2014, the Amathole District Municipality wrote to MISA and requested to utilise MISA’s contract for the bucketed education programme, as they were intending to implement a similar project in the district. They did this in terms of regulation 32 of the Municipal Finance Management Act (MFMA) regulations, regulation 16 (A) 6.6 of the Treasury Regulations. In response, MISA considered the provisions of regulation 32, as well as regulation 16(A) 6.6; the Agency responded to ADM and indicated that they do not object the request by the district to utilise MISA’s contract. The response indicated the process that regulation 32 requires to be followed and also forwarded them the procurement file of MISA. This was the entire tender file containing the advert, the Bill adjudication and evaluation reports, the contracts between MISA and the two contractors, as well as the appointment letters. Since then, nothing happened until August 2014, when MISA received a letter from the district, advising MISA that they have appointed the Siyenza Group as the main contractor for the sanitation programme in the district.

He said that in their response, MISA indicated that they cannot be an implementing agent in this matter because the district has appointed the Siyenza Group as the main contractor, but MISA will support the district with the technical support in line with its mandate through the deployment of its engineers and its teams in the Eastern Cape province. In May 2015, while the Siyenza Group contract was still in place at MISA, they submitted an invoice to MISA for payment, and the tax clearance in MISA’s position at the time had expired. In terms of its processes, MISA is required to verify that the tax affairs of a service provider are still in order and that its tax clearance is still valid before they can make a payment. MISA then withheld the payment to the Siyenza Group and requested them to submit a new tax clearance certificate. The Siyenza Group submitted a new tax clearance certificate, which MISA subjected to a verification process through its due diligence service provider. The report from the due diligence service provider indicated that the tax clearance certificate that was submitted by the Siyenza Group was not valid.

MISA wrote to the South African Revenue Services (SARS) in order to confirm this in writing; SARS also confirmed in writing that the tax clearance certificate was not issued by them. In light of this revelation, MISA then also looked at the first tax clearance certificate that was submitted by the Siyenza Group when they applied for the tender. The report also came back saying that it was also not valid, as it was not issued by SARS. Immediately after that, MISA notified the district of the outcome of the due diligence report and sought legal advice on what they could do in the situation. The immediate reaction was to cancel the contract and they sought a legal opinion on the issue, of which the advice from Senior Counsel was that they cannot unilaterally terminate the contract and that they needed to terminate the contract through a court process. Senior Counsel also advised that because the contract was going to end in June 2015, MISA and the district would need to engage the service provider in a roundtable discussion for a mutual termination of the contract. If the service provider did not agree, then they would have to take them to court. The roundtable discussion was held, and the contract was mutually terminated.

Mr Vimba said that when the revelation of the fraudulent tax clearance came forward, MISA immediately opened a criminal case of fraud against the Siyenza group.

Briefing by O.R. Tambo District Municipality
Ms Thokozile Sokanyile, Executive Mayor, O.R. Tambo District, said that they have submitted a report that talks to the ventilated improved pit latrines as requested, and another report was submitted to the Portfolio Committee in the last year. She then requested the Director in the Office of the Municipal Manager to proceed with the presentation on behalf of the O.R. Tambo District Municipality.

Mr Sinalo Mpayipheli, Director in the Office of the Municipal Manager, O.R. Tambo District Municipality, presented on the water services planning and implementation, sanitation services planning and implementation, as well as the challenges faced by the district municipality. He said that the district municipality is a water service authority and the main water provider for its area of jurisdiction and added that it is the district’s priority to accelerate the ventilated improved pit latrines in the district in order to restore dignity in the communities.

In terms of water services and implementation, he said that the district municipality has a planning and project management unit that solely deals with the planning and execution of various projects in the district. He also explained the District municipality’s sanitation services planning and implementation processes by detailing the districts’ approach for dry sanitation implementation where they have broken down their projects by dividing them according to the wards. He said that out of the total households of 335 000 in the district, there are 256 000 households that have the accepted standard of sanitation in terms of RDP standards.

With regards to the challenges faced by the district municipality, he mentioned the declining budgets for operation and maintenance of sanitation infrastructure, as well as the inability to employ competent and experienced staff to operate complex waste water treatment works, among other challenges. 

Discussion
Ms H Mkhaliphi (EFF) said that at Amathole District in early 2020, there was an arrest made in relation to the Siyenza Group matter, including the arrest of the MISA CEO. The Committee previously requested detailed update on this matter, but nothing has come forward so far. She wanted to know from the Deputy Minister why the MISA CEO has not been suspended because the issue had been raised by the Committee before. She added that she had written to the Minister and the Minister did not see it fit to suspend the CEO. She said that the Committee is not saying that the CEO of MISA is guilty, but for the sake of ethical reasons, the Department should seek to portray a picture that shows that it is dealing with corruption decisively. She said that as per Public Protector’s remedial action, the actual amount recoverable from the former Municipal Manager, Mr Magwaqane, in relation to the irregular expenditure arising from his financial misconduct in respect of the VIP toilets, should have been determined in October 2019. She wanted to know if the Council has determined the amount. She said that the Public Protector also referred the matter to the HAWKS for the investigation of all implicated parties and wanted to know when last the district did a follow up with the HAWKS on the matter as well as the progress that has been made.

Ms P Xaba-Ntshaba (ANC) wanted to know how there could have been value for money in the Siyenza Group contract when the East London Court and the Public Protector found that the ADM failed to procure the services in accordance with a system that is fair, equitable, transparent, competitive and cost-effective, as envisaged in section 217 of the Constitution. She also asked if the Senior Manager of Legal Services and the General Manager of Supply Chain, who were suspended and then decided to resign, did so because they knew that they were guilty. She wanted to know what happened after they resigned and whether there was further action taken by the district municipality.

She said that the presentation by the O.R. Tambo District Municipality spoke nothing of the alleged payments made from the accounts of the district to the Amathole Waterboard. She said that the Auditor-General (AG) highlighted this in the management letter dated 11 October 2019, where there was a request for supporting documents in relation to two payments made to Amathole Waterboard to the cumulative value of R139 million.

Mr K Ceza (EFF) said that the system of tender contracts has proved to empower only private companies, private sector corporations and a few politically connected individuals, including senior government officials in procurement, while it disempowers communities and workers. This is because, on the ground, these contracts that the government is outsourcing due to the inability to build internal capacity to its own functions is blatant in its manifestation because those companies do not do justice in employment of local people, and the material that is procured is not sourced locally. Most importantly, the workers are often paid meagre salaries and a majority of these companies that get contracts from government do not actually employ workers on full time contracts. The Employment Act is clear on how this should happen and how workers should be cushioned in terms of the minimum wage of this country. “A sober government will have to build internal capacity to be able to perform its own functions”, he added. Mr Ceza said that it is not sustainable to be discussing tenders and their delivery because even in the projects that are already implemented there are no new technologies to sustain them.

He wanted to know the planning and budget of the VIP latrines and the basis of the prediction in terms of the rate of the accumulation of large and emptying methods that may be required for the latrines, without endangering the health of residents. He also asked the basis of Amathole District Municipality appointing MISA as an implementing agent and who was held liable for the fraudulent tax clearance certificates and the consequence management steps that were taken. He also asked about the number of local people that were employed in these projects and where the material was sourced.

Mr G Mpumza (ANC) noted that the presentation by Amathole District indicates that the National Treasury said that there was value for money in the implementation of the projects; he wanted to know whether that value for money includes the R250 million that had already been paid to the Siyenza Group. He asked what happened to the difference of the R631 million because the original target of installing the VIP toilets was 66 000. He wanted to know if the target of installing 66 000 VIP toilets was achieved.

He noted that the municipality had written letters of acknowledgement of the bids of other contactors and all of a sudden, they decided to enter into a contract with the Siyenza Group. He then wanted to know if the acknowledgement letters that the district sent to the other contractors did not have a legal binding on the district and whether the district anticipated that it could be liquidated by those contractors. The audit findings from 2018/19 indicate that the Auditor-General was unable to obtain sufficient evidence that the targets were achieved in terms of the number of households that were targeted to be supplied with the VIP toilets. He wanted to know how far the district is in trying to address these audit findings.

Mr Mpumza said that both presentations from Amathole and the O.R. Tambo give him the impression that their masterplans are aligned to their Spatial Development Framework. He said that the presentations say that the supply of the panels is ordered from Durban, meaning that there is no localisation of supply of the panels, as they are solicited outside the province. The concern is that with the supply and installation of the VIP toilets, job creation for the benefit of residents of the O.R. Tambo District is very minimal, which poses a challenge in building the economy of the district. He wanted to know why the panels are being outsourced from outside the province as well as the plan of ensuring that the small towns that are situated in environmentally sensitive areas are able to receive a bulk water connector.

The Chairperson said that in relation to the section 106 investigation at the O.R. Tambo District following the allegations of irregular payments and that in the meeting on 21 August 2021, the Executive Mayor said that the matter was also under investigation by the Municipal Disciplinary Board. She wanted to know from the MEC (Member of the Executive Council) of COGTA (Department of Cooperative Governance and Traditional Affairs) whether the district municipality has fully implemented the recommendations in terms of the 106 reports. She asked the Executive Mayor to provide an update on the outcomes of the Municipal Disciplinary Board investigations.

Responses: Deputy Minister
Mr Obed Bapela, Deputy Minister of Cooperative Governance and Traditional Affairs, said that corruption is indeed a serious matter that society needs to fight. Concerning the issue of the MISA CEO, he said that the Minister engaged on the matters previously raised by the Portfolio Committee and has engaged with the MISA CEO. He pleaded with the Committee that it should be the Minister that returns to the Committee as soon as possible to give the reasons why the CEO has not been suspended because that engagement was done directly by the Minister and the CEO of MISA.

Ms Mkhaliphi said that it is not the first time that the matter has been raised by the Committee; it has been a while. She said that the matter emanates from 2020 and now it is 2021, so it cannot be that the Portfolio Committee raised an issue that they think is very critical but there is no interest from the side of the Minister. She assured the Deputy Minister that if the Committee continues to not receive a response from the Minister on the matter, it still going to raise the matter, as it is part of its oversight mandate. She wanted to hear the reason why the MISA CEO did not offer to step aside until the court case is finalised.

Mr Vimba appealed to the Committee that the answer by the Deputy Minister also covers himself, as he did not want to offer an opinion with regard to the issues that were already discussed with the Minister. He said that he agrees that the matters raised by Ms Mkhaliphi are important and added that the Members should also read the Public Protector’s reports and the forensic reports and then they will be able to judge what should have been the role of the CEO of MISA. He said that they would see that there is really nothing linking him with criminality, as he was merely an official at the time, and added that the matter is sub-judice.

Responses: Amathole District Municipality
Mr Zolani Kabane, MMC: Community Services, Amathole District Municipality, said that it is important that the Committee understands that the district municipality knows and understands the process that led to the situation that they are currently in. He said that it is important to also understand that the intension of Council was to fast-track service delivery to the people, especially the toilets in the rural areas. But the district municipality understands that the issues of fraudulent tax clearance certificates were administrative errors. The Committee should note that the district municipality intends to fight corruption every time it raises its hand. The district municipality should not be viewed as people who are not fighting corruption.

He said that the municipality has a contract with the Siyenza Group and if the Siyenza Group has a subcontractor, the contract stays between the group and the subcontractor, not the district municipality. He said that it would be a waste of money for the district municipality to pay money to the subcontractor.

The Chairperson said that the accounting officer should be dealing with the issue of the subcontractors, as it is not within Mr Kabane’s purview.  When the AG comes to the municipality, an Oversight Committee of Council, which is the Municipal Public Accounts Committee, would deal with that.

The Chairperson asked Mr Kabane to deal with the substantive issues as raised, in order to save time.

Mr Kabane said that the issue is currently in court now and the intention behind taking the issue to court is to uproot corruption.

Mr Maneli said that they are all new in the roles that they hold in the municipality and reminded the Committee that the events transpired in August 2014. He said that according to the information that is at their disposal now, the district municipality initially went out and tendered for the supply and restoration of latrines. In August of 2014, the district notified three contactors that they had been successful in their bid to supply the toilets. He said that they do not know why the district municipality decided to opt for regulation 32 instead of appointing the three contractors; they also do not know why an attempt was made to take MISA as implementing agents. These issues are sub-judice. He added that maybe after the issue has been resolved by court, then substantial answers can be provided to the Committee.

Dr Mnyimba said that after the Public Protector’s report was tabled to council, the district developed an action plan on how to implement the recommendations by the Public Protector. The action plan was then submitted to the office of the Public Protector, where it was accepted. The district reports to the office of the Public Protector from time to time on the implementation of that action plan. All the recommendations have been implemented, except the two recommendations that will be taken to court for review in terms of paying the service providers, as there is no contractual obligation between the district and the service providers. He added that the district is waiting for a court date in that regard and the reason for the delay on the court cases, among other issues, is the hard lockdown of the country in 2020 because of COVID-19. The court has a huge backlog over these cases. He said that the district worked hand-in-glove with the HAWKS, supporting them with the information until they finalised their investigations. That enabled the HAWKS to make the arrests and now the matter is before the courts and out of the hands of the district.

On the issue of value for money, he indicated that the initial contract value was R631 million, and after the appointment of the Siyenza Group, the municipality paid about R215 million to the Siyenza Group to implement the project. When the forensic report talked about value for money, it meant that for the R215 million paid to the Siyenza Group, on the grounds, the district has toilet units that are tantamount to the value of R215 million, meaning that there is value for money. The contract was then nullified by the court of law and the district did not proceed with that project; it ended there.

Regarding the employees who resigned, Dr Mnyimba said that, as part of implementing capacity recommendations by the forensic investigation report and the recommendations by the Public Protector, the district instituted disciplinary processes, especially to those officials that were directly implicated. The Senior Manager for Supply Chain Management, the General Manager for Supply Chain and the Senior Manager for Legal Services were directly implicated, and after the disciplinary processes, they resigned. The matter is still sub-judice and the law enforcement agencies have a list of those individuals that they consider as the accused, as well as those that they consider as witnesses. One of the employees is considered as a witness but it is difficult to provide full transparency to the Committee in a public platform, as the matter is sub-judice.

He said that the district did not appoint MISA but it appointed the Siyenza Group as an implementing agent. He said that it is unfortunate that they can only rely on the documents that they have, on forensic investigations report and on the Public Protector’s report, as they were not part of that process. He said that relying on the documentation that they currently have access to, the district cannot find any logical reason for the appointment of the Siyenza Group, but the court will adjudicate on the matter in due time.

In terms of the beneficiation issue as raised by the Committee, he said that one of the factories that manufactures the material is in Queenstown in the Eastern Cape; the other was based in East London, and the other was based in Butterworth within the district municipality.

Ms Mkhaliphi asked for the timeframe of the action plan that the district is implementing in collaboration and communication with the Office of the Public Protector. She wanted to know whether the district is going to be able to recover the money that was lost in the district, as they are awaiting the conclusion of the court cases. She also asked for clarity on who exactly appointed the Siyenza Group as the contractor.

Dr Mnyimba said that there are two reports with the first one being the forensic investigations report and the second one being the Public Protector’s report. On the forensic investigation reports, the matter is before the court and is being handled by the court. The Public Protector’s report came after the forensic investigation, and when the Public Protector outlined her recommendations, the district responded through the action plan. The district then said that the recommendation has already been implemented and the Public Protector is comfortable with that, as she acknowledged the action plan and supported it. In terms of disciplining employees who were directly involved and implicated in the process, the district has done that.

Responses: O.R. Tambo District Municipality
Mayor Sokanyile said that, in terms of the irregular expenditure, the district municipality agreed with the Mayoral Committee and MPAC that the Municipal Disciplinary Board should deal with the irregular expenditure on a quarterly basis. On the issue of the prepayments that were allegedly made to the Amathole Waterboard, she said that there is a case that has been opened with the HAWKS, whereby the HAWKS are still investigating. But the MEC for COGTA, through section 106, was investigating the same project with the alleged prepayment. The council took an independent investigator to investigate that prepayment to Amathole. So, the independent investigator said that the law agencies are investigating the same issue and suggested that the district should wait for the reports from the law agencies so that the reports can be consolidated into one report.

Mr Mpayipheli said that the issue of the alignment of the masterplan of water and the SDF is one of the critical areas that the district is trying to drive. The master plan provides the plan to provide sustainable sanitation to the small towns in terms of the Broader Regional Water Supply Scheme, as well as the water bond system in all the towns. One of the key fundamental issues of the water master plan was to ensure that the towns, with the exception of Mthatha, have a water bond system so they are able to ensure that they lobby the investors and ensure that they consider economic development. One of the key issues that have faced Port St John’s was the question of the land because this is an environmental area, but the district is engaging with the Department of Forestry and Fishery as well as other sectors in that site. He said that they acknowledge that their strategy as the district for acceleration of sanitation, especially VIP latrines does not accommodate their local economies. As a result, the district has a proposed strategy that it is starting to implement, which will ensure that they have local suppliers and use local people and ensure that they transfer the skills.

Responses: COGTA MEC
Mr Xolile Nqatha, Eastern Cape MEC for COGTA, said that, in terms of the 106 investigation, the municipality had requested COGTA to conduct the investigation. COGTA constituted a multidisciplinary team involving Treasury, COGTA engineers and some technical directors from the municipality itself. This was a team of 12 people that visited projects and conducted the investigation and completed it. The report is ready, but it has not been tabled yet because the municipality, due to its internal conflict, preferred to incur more costs by engaging an independent service provider. The report has not been tabled because municipality remains unstable, as they refuse even to renew the extension of section 154 support. The matter is being handled by the ruling party, which is leading that municipality in terms of dealing with the politics because COGTA cannot resolve political issues administratively. He said that COGTA will share the report once it is tabled to council.

In terms of Amathole District, he said that they have invoked section 139 (5)(a) of the Financial Recovery Plans (FRPs) and set up workstreams that are doing well at the technical level. He said that they are working together with the municipality and the Treasury, but what is quite disappointing is the delay from the National Treasury in finalising the FRP. He asked the Committee to assist in adding the pressure to National Treasury to finalise the plan. The status assessment report was done, which must inform the terms of reference. He said that COGTA was hoping that the terms of reference would have been completed two weeks ago already, but it has not been forthcoming and this is something that is not in their control.

On the VIP toilets, he said that municipalities should acknowledge that the project was handled badly, and it resulted into activities that compromise the rule of law and due process. Irrespective of whether the leadership was there or not, something went terribly wrong; the steps that they have taken already, including taking other officials to disciplinary committee, are appreciated. However, those steps and measures that they have taken are not enough, as they do not translate to the municipalities recovering the money that they have lost. The municipalities need to be more upfront about these issues.

The Chairperson asked for an update from the CEO of MISA regarding the case of the fraudulent tax clearance certificates of the Siyenza Group.

Mr Vimba asked to follow up with the Head of Legal Services of MISA and then provide a report to the Committee at a later stage, as the Head of Legal Services was not present in the meeting.

The Chairperson asked Mr Vimba to provide written feedback to the Committee on the following Monday.

Mr Vimba agreed to do so.

Concluding Remarks by the Chairperson
The Chairperson said that the Committee will follow-up on all the matters that were raised during the meeting. She thanked the MEC of COGTA for providing an update on the status of the district municipalities and asked that COGTA provides feedback to the Committee on the progress of the section 139 (5)(a) intervention at the Amathole District Municipality, in the near future.

She thanked the Members, the delegations from both district municipalities, as well as the CEO of MISA and the representatives from SALGA (South African Local Government Association), for availing themselves for the meeting.

The meeting was adjourned.
 

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