Mgoqi may face R8m bill
Cape Town - Former Cape Town city manager Wallace Mgoqi could face a bill of almost R9m for allegedly authorising irregular spending on a jewellery-city project.
He could also face criminal charges, said mayoral committee member for finance Ian Nielson on Tuesday.
Nielson said that after a forensic audit and advice from a senior counsel, disciplinary hearings were initiated on Monday.
These were against the head of the city's executive management unit, Mthuthulezi Swartz, who approved payments, which were then authorised by Mgoqi.
He said the audit and the advocate found that Mqoqi's appointment of TOM Consulting as project managers for an African jewellery-city project planned for Cape Town's Waterfront was "fundamentally flawed".
They found that the payment of R8.5m to TOM, which is headed by former SA local government association chairperson Thabo Mokwena, plus additional advertising costs of at least R127 000, were unauthorised, irregular, and fruitless or wasteful spending.
Wait for the outcome
They also found that the city was obliged under the Municipal Finance Management Act to recover the money concerned from Mgoqi.
Nielson said the council would, however, wait for the outcome of Swartz's hearing before deciding on any further action.
Swartz has been suspended on full pay. His hearing is scheduled to start on September 13.
Nielson's announcement is the latest round in a series of spats between the city's new Democratic Alliance-led administration and its African National Congress predecessor, many of them about shaky contracts.
Mgoqi was appointed by the ANC, and when the DA and its allies came to power last year in March this year, he sought to cling to power through an irregular last-minute extension of his lucrative contract.
Nielson said that according to the minutes of a March 2005 mayoral committee meeting, the committee "approved and endorsed" the concept of establishing a jewellery city, and resolved that the viability of a Waterfront site be investigated.
It did not appoint Mokwena "or anything else". It would seem that Mgoqi then appointed TOM without any tender procedure.
This was totally contrary to the city's procurement policy at the time, under which Mgoqi was authorised to approve contracts of up to R350 000.
According to the auditors, the work done by TOM was worth at most R1.5m, and he, himself, would be very surprised if it was worth more than a million.
Appeals by tenderers
He said the city's audit team had been in close contact with the Scorpions for several months about the issue, and that the city's own investigations soon would be handed to "the appropriate authorities".
It was too early to make any decision on the future of the jewellery project itself.
This would be decided only after a number of appeals by other tenderers had been heard.
News source: www.news24.co.za
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