Senior officials in the eThekwini municipality are set to be arrested this week on corruption charges.

Hawks set to arrest top eThekwini officials
Warrants follow forensic audits of R3.5-billion in housing contracts with the city
Mar 5, 2011 11:42 PM | By BONGANI MTHETHWA and MANDLA ZULU

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Senior officials in the eThekwini municipality are set to be arrested this week on corruption charges.

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Photograph by: Halden Krog
Credit: The Times
City manager 'has failed to fulfil his responsibilities', says the report The Sunday Times has established that the Directorate for Priority Crime Investigation (the Hawks) has obtained several warrants, which will be executed within days.

The pending arrests - confirmed by a senior Hawks official in Durban - follow an explosive report into R3.5-billion in contracts dished out over the past 10 years.

The report, by audit firm Ngubane & Co, recommends that disciplinary and criminal charges be brought against city manager Mike Sutcliffe, his deputy in charge of procurement, Derek Naidoo, housing head Coughlan Pather and procurement head Themba Shezi.

The city was also rocked by the auditor-general's 2009/10 report, which cited irregular and noncompliant spending.

Both reports were tabled before the city's executive committee last month.

The Ngubane & Co report outlining financial mismanagement and tender irregularities in the contracts recommends that members of the city's tender adjudication committee be charged with misconduct and that multimillion-rand housing contracts awarded in Chatsworth be suspended.

Irregularities uncovered in the Chatsworth projects included bid rigging, the awarding of tenders to city employees and city councillors, and bypassing of the tender process in favour of certain suppliers, consultants and contractors.

The audit looked into revised amounts awarded for housing rehabilitation projects in the Bayview, Westcliff and Crossmoor areas.

One contract in Crossmoor, for example, was revised from R6.1-million to R15.4-million. The report found that tender procedures were not followed.

At projects in Bayview and Westcliff, the amount was revised from R16-million to R26-million.

Three other projects in Westcliff were revised from R12.6-million to R21.9-million while another in the same area was revised from R8.7-million to R17.4-million.

The contracts were awarded to just three contractors.

According to the report, Sutcliffe refused to be interviewed by the forensic auditors in a meeting about the Chatsworth project on May 14 last year "until some information regarding the investigation is proved to him".

"The city manager said that he viewed this forensic investigation ... as a political witch-hunt against him, and he had serious concern about the manner in which this forensic investigation is being conducted," says the report.

The report says that the "authorisation of the city manager to deviate from the normal tender process was irregular ... (and) he has failed to fulfil his responsibilities".

Following the release of the report, mayor Obed Mlaba announced an independent forensic investigation into the city's financial affairs. Thatwas approved by the council on February 22.

The auditor-general's report uncovered R532-million in irregular expenditure and a host of supply-chain management contraventions for the municipal year ending June 2010. It identified 53 contracts, valued at R16.8-million, awarded illegally to councillors or companies whose owners or shareholders work for the city.

The city officials are already facing the wrath of opposition parties and ratepayers' organisations over the reports.

Sources this week said Sutcliffe was feeling the pressure from "all sides" for the first time in his eight-year tenure.

His contract runs out in June.