Full eThekwini Council Decisions – October 2015

RESOLUTION TAKEN TO RESCIND DECISION ON PAYMENT TO DKS HOLDINGS

EThekwini Municipality believes in and practices good governance. The decision taken at the Full Council seating today, 28 October 2015 regarding payment to a company whose contract had been terminated, supports this ethos.

Full council upheld an Executive Committee decision to rescind two earlier decisions regarding payment to DKS Holdings.

DKS Holdings was awarded a contract in 2005 for R18.2 million for housing accommodation for the Umlazi Glebelands Community Residential Unit. They incurred penalties when work was not completed on time.

The contractor then approached the Executive Committee in 2007 regarding the penalties. The fees were waived so work could be completed. The contractor had been paid R15.3 million for the work.

The matter was this year brought to the attention of the Municipal Public Accounts Committee and was referred to the City Integrity and Investigations Unit (CIIU) to be investigated.

Based on a report from the CIIU the Executive Committee in September this year approved recommendations to return money (R2.4 million) paid by the contractor. This decision was upheld in the Full Council meeting that month.

However, new information emerged after this decision was taken and eThekwini Mayor Cllr James Nxumalo tasked the Legal Unit to determine the way forward in the matter.

In a report before the Executive Committee yesterday, 27 October 2015, the Legal Unit said that the Executive Committee waived penalties in 2007 on a once-off basis for work to be completed. However, the relevant department did not implement this decision. Instead the department put a condition that the company was to release to them a work programme in seven days.

When this was not done, DKS Holdings contract was terminated. On termination of the contract, the Municipality wrote to Constantia Insurance Company, which had issued a surety bond in favour of DKS Holdings, requesting compensation for the company’s failure to perform on the contract. The insurance company subsequently paid the Municipality R1.8 million. The insurance company then had recourse against DJS Holdings and took judgment against them in 2008.

There is therefore no legal basis for the Municipality to make any payment to DKS Holdings.

EThekwini Mayor James Nxumalo said it was procedure to interrogate and investigate new information that could impact decision making.

“The matter is now considered closed,” Nxumalo said.

Deputy Mayor Nomvuzo Shabalala said the correct decision has been made.

“We have made the correct decision today. However, I must reiterate that earlier decisions made (that have been rescinded) were not a mistake. They were made based on evidence before us at the time. When new information emerged the Mayor told Legal to investigate the matter further before any payment was made. We have now taken the correct decision,” she said.

POINT DEVELOPMENT RATES DEFERMENT

Attracting foreign investment to the City is vital which is why Full Council today, 28 October 2015, supported a deferment for rates repayment for the Point Development Company for five years.

The full rates are payable but are being deferred to allow the company to focus on developing the area while also addressing its cash flow problem. There is a provision for rates deferment in the City’s Rates Policy.

This decision was taken in view of the strategic importance of the Point Waterfront Development to the City. A condition of the deferment was that when transfer of any land parcel takes place to any other party, rates will become payable. Any rates accrued up to the point of sale on the remaining properties will remain deferred until the expiration of the deferment period at which date the entire accumulated amount will become due and payable.

The City has a 50 percent stake in the development.

The intention of the development, which includes the expansion of the beachfront promenade, is to transform the rundown precinct into a world-class environment.

Deputy Mayor Nomvuzo Shabalala said the agreement was not that rates would not be paid at all, instead that it would be paid in full at a later stage.

She said the company had a previous rates deferment for 10 years which expired in June. The outstanding rates have been paid in full.

Shabalala said special preference was not being shown to the company as the City had an effective rates relief programme in place for residents.

“The Rates Policy takes care of people who cannot keep up with their rates. In those cases rates rebates are given. The pensioners and indigent are taken care of. Our vision is to be the most caring City in Africa by 2030, we treat all residents equally,” she said.

Shabalala said this deferment was necessary to attract investors to the City.

ETHEKWINI TV IN THE PIPELINE

Full Council today, 28 October 2015, approved a proposal to introduce eThekwini Municipality Television (EMTV) to residents. The Municipality supports the initiative which would serve as a critical tool to showcase the City’s achievements to the public.

Existing televisions placed at Sizakala Customers Centres across the Municipality would be used to broadcast the information. EMTV would provide a comprehensive synchronised digital solution that is prompt, responsive and expedient for the provision of highly effective customer service.

There are presently no cost implications as the City would use existing infrastructure.

The Head of Sizakala Customer Service Centres will now engage with external service providers in line with the City’s Municipal Supply Chain Management processes, to investigate and recommend a suitable comprehensive solution in preparation of rolling out the project in eThekwini.

Chairman of the Human Settlement and Infrastructure Committee Nigel Gumede said it was a wonderful idea.

“We already have the television screens and nothing will have to be spent in this regard. For us, it is a way of communicating with the public without being censored by media about the work the City is doing. We can keep people informed about City policies and many other things. What should prevent us from having a station that will be sponsored?” Gumede said.

Deputy Mayor Nomvuzo Shabalala said this was an opportunity that the City could not afford to pass up.

“We were approached by the company who has already acquired a licence to have a TV station. We don’t have to go out and get a licence. We can enter into a partnership with them. This will be another medium we use to communicate with residents,” she said.

City Manager Sibusiso Sithole said currently there were no cost implications.

“At this stage the equipment is there. Once the Head of the Sizakala Centres concludes her investigation she will come back to us about management and possible costs. Only then will we know the way forward,” he said.