Latest news with #R136m
TimesLIVE
10-07-2025
- Business
- TimesLIVE
Ekurhuleni municipal building's R46m budget skyrockets beyond R300m
After eight years, five contractors and more than R300m paid to the City of Ekurhuleni to renovate a municipal building, the structure in Germiston remains unfinished. The project launched in 2017 with a completion date set for 2021 still needs an additional R39m to complete. The plan was to ease severe office space shortages for the municipality but the project has turned into a drawn-out financial nightmare. When Sowetan visited the SAAME building this week, there was no contractor on site. Rubble surrounded the 10-storey structure, unused building materials including cement lay scattered around and there was no sign of any ongoing work. The building remains barricaded with only security guards stationed at the premises. A 71-page forensic report tabled in council in March 2025 outlined a damning paper trail of irregularities, inflated prices for material which cost the city more than R136m and defective workmanship for which the municipality had to fork out R4.8m. The council also lost R70m to unauthorised payments to some of the contractors. The total financial value of these irregularities amounted to R272m. The investigation into the refurbishment of the building was requested by the city manager after noticing 'potential red flags and substandard service from contractors'. According to the report, the Development Bank of Southern Africa (DBSA) was hired to manage the project and was paid more than R8.1m. Themane Management Consultants (TMC) was paid more than R163m, while Anita Building Construction, which later renamed itself FM Infrastructure, was paid R94.1m.
IOL News
12-06-2025
- Business
- IOL News
Scrutiny mounts over R86 million spent on South African Post Office business rescue
According to the AG report, Sapo is not meeting their payment commitments to their creditors, including statutory creditors, resulting in interest and penalties being charged on late or non-payment. Image: Independent Newspapers Archives Parliament's Standing Committee on Public Accounts (Scopa) has expressed serious concerns regarding more than R86 million paid to the South African Post Office (Sapo) business rescue practitioners (BRPs), Anoosh Rooplal and Juanito Damons, since their appointment in 2023. Members of Parliament on Wednesday questioned the revelation of zero consequence management at Sapo as wasteful and fruitless expenditure was sitting above R200 million since 2021. This comes as R152m remains unaccounted for in the current year, with further reports of R136m being written off by the BRPs. "I would like to understand that it is two people, that is already R86m spent on them, please Auditor-General, take us nicely. Did you have sight of what the R86m was paying for? What are the other consultants? What is the period of these people being there," asked MP Veronica Mente-Nkuna. "History has treated us badly with business rescue We saw with SAA that has turned itself around but the busines rescue process did hot have much contribution in turning it around." Executives for the Office of the Auditor-General (AG) clarified that the R86m paid to the two practitioners was regulated with caps and rates on what they could charge for, further explaining that they needed to contract independent expertise. Some of the key things were the actual turnaround plan and implementing the plan as well, They also needed someone on the ground to support management, closing the Section 189 legal involvement, and the involement of other practitioners such as tax, legal, evaluators and others. According to the AG report, Sapo is not meeting their payment commitments to their creditors, including statutory creditors, resulting in interest and penalties being charged on late or non-payment. The fruitless and wasteful incurred for the current year was R152m, however R136m was written off as result of the business rescue process for the current year. Similarly, the opening balance was decreased by R484m as a result of the business rescue process. Sapo's consequence management for fruitless and wasteful expenditure is inadequate, with delayed investigations, poor record-keeping, and weak disciplinary actions, undermining accountability and allowing financial inefficiencies to persist, the AG reported. "What is the Sapo's culture around fruitless and wasteful expenditure is marked by weak accountability, poor financial management—such as entering contracts without cash flow confirmation—and a tolerance for inefficiency, resulting in repeated financial losses," noted the AG report.. "Its consequence management is reactive and permissive, with delayed actions often justified by financial difficulties, undermining effective financial control." The AG said weak internal control environment around cashflow management, ineffective contract management, and lack of accountability were the main contributing root cause to the culture Sapo's fruitless and wasteful expenditure. Cash flow constraints further delay payments, leading to avoidable costs such as interest and penalties. The AG said weak consequence management stemmed from lack of leadership and oversight, delayed investigations, inadequate disciplinary action, and poor record-keeping of evidence supporting fruitless and wasteful expenditure cases, often excused by financial difficulties. The AG said executive management must enforce accountability on all responsible officials accountable for financial decisions and contract management through capacitating the Financial Misconduct Committee (FMC) in order to change the culture of fruitless and wasteful expenditure. It also recommended that the board to be appointed should strengthen oversight over the FMC, and the Department of Communications and Digital Technologies, together with the board, should ensure strict monitoring and consequence management. BUSINESS REPORT
