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Disgruntled service providers and employees are claiming R127 425 955 arising from various issues of breach of contracts and labour disputes. – financial statements

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Sizwe sama Yende

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Limpopo’s Sekhukhune district municipality is, by the look of things, not done losing money through negligence as it faces more than 20 lawsuits valued at an astronomical R127.4 million.

The municipality in Groblersdal is responsible mainly for bulk water supply and sanitation, amongst other services, in four largely bucolic local municipalities – namely – Elias Motsoaledi (Groblersdal), Fetakgomo Tubatse (Burgersfort), Makhuduthamaga (Jane Furse) and Ephraim Mogale (Marble Hall).

Sekhukhune’s annual 2024/25 budget is R1.9 billion – 90% is grants from national government – and it is still very far from providing water to all its villages.

According to the municipality’s financial statement until June 2023, disgruntled service providers and employees were claiming a total amount of R127 425 955 arising from various issues of breach of contracts and labour disputes.

Municipal spokesperson, Lamson Moropyane, and municipal manager, Meshack Kgwale, did not respond to written questions sent on January 14.

“As soon as we get green light from our seniors, we will give a response,” Moropyane said.

Over and above these claims, the municipality has already been harmorrhaging cash in recent years without any punitive measures being taken where officials are implicated.

THE R18M CLAIM

 A week ago, The People’s Eye  reported how council failed to stop an R18 million claim by bulk water construction company and paid the money to avoid having its bank accounts attached.

Payment of this amount brought the total amount lost to silly mistakes and daylight theft by unscrupulous officials to R64.4 million.

The R18 million lawsuit emanated from a dispute  two years ago when Lebaka Construction (Pty) Ltd’s contract to build a reservoir and bulk water pipes was terminated.

The owner had allegedly refused to give in to venal officials’ demand for kickbacks.

Sekhukhune owed Lebaka R10 million for work done, but officials let the matter drag on until interest had accrued to R8 million when the company was eventually paid in December.

A source told The People’s Eye that the council was called to a special meeting late in December to take a resolution ratifying the payment when the sheriff was threatening to attach the municipality’s bank account.

MORE PAYMENTS FOR RECKLESSNESS

Last July, the municipality paid Hexagon Technologies and Projects R11.6 million when it dilly-dallied on paying a claim that was initially R6 million.

The municipality did not fight the matter as its attorney attorney allegedly settled the dispute out of court without any instruction from the council.

The law firm in question then lied that the district had lost the matter at a trial but there was no trial that took place.

Sekhukhune district got entangled in a contractual dispute with Hexagon in 2015 after it was awarded a tender for the supply and delivery of precast VIP toilets in the 2012/13 financial year.

Hexagon ceded 100% of its work to another company and a dispute arose when the new contractor demanded more money due to a price escalation in the delivery of the toilets. The municipality refused to pay more than the agreed price.

Hexagon sued the municipality and won.

R30M SPENT TO CLAIM R600K

IN 2024, the municipality’s officials splurged R30 million on lawyers to recover a paltry R600 000.

The lawyers were hired to recover R5.4 million that the municipality lost when a  corrupt officials, working in cahoots with their partners in crime within the bank, channelled the amount to bogus accounts in 2018.

The amount stolen in tranches of R4.5 million and R900 000.  Police could only recover R4.7 million after freezing the bogus accounts.. The council then decided to hire lawyers to recover the remaining R600 000 and the municipality incurred R30 million in legal fees.

COMPENSATION FUND

In the 2018/19 financial year officials fleeced about R19.6 million in separate tranches. They pilfered R5.4 million, then R12 million (over a year) and then R2.2 million.

The R12 million was transferred in R1 million instalments over 12 months, into an account supposedly belonging to the labour department’s compensation fund.