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·      City of Polokwane mayor, John Mpe, says the money to refund Linked Thoughts Consulting (Pty) Ltd was sourced from an operational and a capital budget ·      The Integrated Urban Development Grant (IUDG) used to pay the developer is intended to provide services to poor households not middle class settlements such as Ivy Royal Manor ·      The service level agreement between the municipality and Linked Thoughts clearly states that the developer would pay for bulk services

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Sizwe sama Yende

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The City of Polokwane’s attempt to justify a R41.2 million refund to a township developer has left more questions than answers.

Firstly, the municipality’s officials breached a clause in the service level agreement signed with Linked Thoughts Consulting (Pty) Ltd, which clearly said the developer would pay for bulk services that would be installed at the Ivy Royal Manor or Ivy Park Ext 36 in Polokwane.

The service level agreement reads: “In accordance with Council Resolution CR/19/10/11 dated 19 October 2011, bulk service contributions are payable by the developer to the municipality and said contributions are payable before the municipality will give authority for construction of the development to commence, unless alternative arrangement is concluded.”

Now, the municipality has obfuscated the matter by revealing through written questions asked by the DA that the money used to pay Linked Thoughts was appropriated from the operational budget rather than the capital budget.

The budget, according to Mayor John Mpe’s response to the DA, was sourced from the Integrated Urban Development Grant (IUDG). IUDG was created to enable select urban local municipalities to provide water, sanitation services and electricity to poor households. Ivy Manor is a middle-class development, which is out of reach for the poor.

By revealing that an operational budget was used, Mpe confirms that the development was not only part of the city’s Integrated Development Plan but also not budgeted for.

The municipality has surprised many developers and set a precedent by reimbursing Linked Thoughts while, previously, developers carried the costs of installing of bulk services and recouped their money from the selling price of houses they would have built.

City of Polokwane spokesperson, Thipa Selala, did not respond to questions sent to him on December 3.

In responding to the DA’s questions, Mpe said, the payment was supported by the Spatial Planning and Land Use Management Act (SPLUMA) and the Polokwane Municipal Planning By-Law.

DA councillor Jacques Joubert said that a forensic audit needed to be conducted.

“They have found a nice way to make this look fine. It’s strange that they paid from the operational budget. Officials have told us that the reimbursement to Linked Thoughts was for connecting or link services, not bulk services,” Joubert said.

A trail of documents indicate that municipal officials violated supply chain management processes.

The violation began with a hand-written note of the approval of the payment on an expenditure form dated 20 June 2023. The note states that supply chain management processes should be surpassed.

It reads: “As per discussion with ACFO (acting chief finance officer), this is a direct payment. No need to sign under compliance because service agreement is attached.”

This is the same agreement that says the developer must pay for the bulk services.

Municipal manager, Thuso Nemugumoni, approved the expenditure on 21 June 2023.

Insiders have indicated that there were no technical drawings approved by the municipality and it was not clear what design standards were used.

The bulk services infrastructure was also not recorded in the municipality’s assets register.