More than 10 Nelson Mandela Bay municipal officials are facing possible criminal charges after the Special Investigating Unit (SIU) found that the procurement of LED streetlights was irregular and should be set aside.
The anti-corruption unit is now preparing criminal referrals to the National Prosecuting Authority (NPA) as well as administrative referrals for the blacklisting of implicated service providers.
The latest details of the R24m tender investigation, initiated following a presidential proclamation, were disclosed by co-operative governance and traditional affairs minister Velenkosini Hlabisa in parliamentary responses to the DA.
The questions were sent by DA MP Marina van Zyl in November.
Hlabisa said the SIU was finalising recommendations for the contracts to be set aside.
The July 2025 probe by the SIU came after former DOP councillor Tukela Zumani opened a case in April 2024 at the Humewood police station.
An internal audit report on tender SCM/20-27/S found the municipality had incurred irregular expenditure of R24m due to incorrect specifications on the LED contract.
It stated that the supply chain management processes were also flawed.
In his response to Van Zyl, Hlabisa said the investigation had uncovered instances of fraud, as well as contraventions of the Prevention and Combating of Corrupt Activities Act and the Prevention of Organised Crime Act by both entities and individuals.
“The SIU has established that the procurement undertaken by the municipality was irregular and must be set aside.
“Several municipal officials failed to comply with supply chain management and financial policies, as well as the Municipal Finance Management Act.”
He said a memorandum had been compiled and submitted to the SIU’s litigation unit for consideration.
He did not disclose the names of the companies or officials implicated, stating that the investigating team was still processing rights of reply in relation to the referrals being prepared for the NPA.
Three companies, their directors and more than 10 officials have been implicated.
“The SIU is busy preparing disciplinary referrals to the municipality for misconduct, criminal referrals to the NPA and administrative referrals for the blacklisting of the implicated service providers,” Hlabisa said.
“The SIU is also preparing systemic recommendations to address weaknesses in municipal processes and has referred evidence to the civil litigation unit for civil proceedings to set aside the contracts at the Special Tribunal.”
The SIU is investigating whether the process and payments on the November 2020 contract were unfair, non-competitive, non-transparent or contrary to legislation and Treasury guidelines.
On Wednesday, Van Zyl said the minister’s reply fell short of responding to critical questions.
“Were any of the 10 officials suspended?” she asked.
“Are these officials still able to have their fingers on the supply chain management functions?
“Does this mean that the officials implicated are still able to approve tenders?”
Van Zyl said the lengthy nature of the investigation meant there were no consequences for those implicated in the interim.
“The main issue we have is that it is … years after the tender was approved back in 2020, and not one official has been dismissed, suspended or held accountable.
“These are serious crimes.
“The problem is that no interim consequences are ever introduced to ensure accountability or prevent repeat offences from happening.
“We believe that when serious contraventions, especially with procurement, happen those officials implicated should not be able to continue within the finance department where they can continue to influence supply chain processes and loot public money,” she said.
Mayor Babalwa Lobishe said that where wrongdoing was identified, the law must take its course.
“Preliminary feedback from the SIU indicates that certain procurement processes are under scrutiny and that disciplinary, criminal and civil processes may follow, including referrals to the National Prosecuting Authority and the Special Tribunal,” she said.
Preliminary feedback from the SIU indicates that certain procurement processes are under scrutiny and that disciplinary, criminal and civil processes may follow, including referrals to the National Prosecuting Authority and the Special Tribunal
— Mayor Babalwa Lobishe
“As these processes are ongoing, it would be inappropriate and irresponsible to comment on specific individuals or entities at this stage.
“Let me be clear, accountability is not a threat to this administration; it is a foundation of good governance.”
She said the municipality would act decisively to deal with weaknesses identified in its control systems.
“I want to state unequivocally that clean governance, transparency and accountability remain non-negotiable pillars of my leadership and of this municipality,” Lobishe said.
“From the outset, I have ensured that the municipality fully co-operates with the SIU.
“All requested documentation and information have been made available to support the investigation.
“We have nothing to hide, and we fully support the work of independent institutions tasked with safeguarding public resources.”
Responding to Hlabisa’s comments, Zumani, who has since left the municipality and is now the leader of the Mayibuye Civic Movement, said he was encouraged by the progress the investigation had made.
“Delays are part of the nature of investigations of this kind, but what is encouraging is that the matter is receiving attention at a parliamentary level,” he said.
“The hope is that the full truth will be uncovered, those implicated will face justice and losses incurred by the municipality will be recovered.”
Zumani said he had little confidence that the municipality had made any progress in implementing the recommendations of its internal audit report.
“When I blew the whistle on the report, it had already been sitting on the desk of the then mayor for months, and nothing had been done about its recommendations.
“There is also no reason to believe that anything changed after I approached the police.”
Zumani said the electricity and energy directorate had been without a permanent executive director for much of the period during which the investigation had been ongoing.
“While we do not yet know which three service providers form part of the SIU probe, there were 10 flagged in the municipality’s internal report, and I can tell you that some of them have since been appointed to do the same work again,” Zumani said.
In 2020, the city’s electricity and energy directorate initiated the procurement process for the supply, delivery and offloading of LED streetlighting and floodlighting luminaires.
During its investigation, the city’s internal audit division found there was not a sufficient supply of materials needed to fulfil the contract despite the department being aware of this.
“The electricity and energy directorate initiated and completed the procurement process for contract SCM/18-207/C, despite being aware that there was no existing contract in place for the supply of materials and that the stock levels of these materials [were] critically low,” the report said.
“At the inception of the procurement process for SCM/18-207/C, the electricity and energy directorate was aware that since 2015, material specifications had not been submitted to the store divisions to facilitate a competitive bidding process.
“The absence of LED streetlighting and luminaire items in the schedules of rates for contract SCM/20-27/S, despite their procurement under SCM/18-207/C, raises questions as to why the detailed specifications were not incorporated in the schedule of rates for contract SCM/20-2/S.”
The Herald