National Treasury has deemed a controversial City of Johannesburg fleet contract ‘irregular’, instructing it should be cancelled and subjected to a forensic investigation.
A letter dated 20 February 2020 and signed by Treasury director-general Dondo Mogajane contains a catalogue of irregularities in the City of Johannesburg’s vehicle fleet tender, which was awarded to politically connected service provider Afrirent in late 2018.about the controversial contract – and Afrirent payments to a Julius Malema-linked account – after sources raised allegations of political meddling by the EFF.
The Municipal Finance Management Act and procurement regulations allow for an organ of state to adopt a contract secured by another organ of state on condition that the other organ of state awarded the contract through a competitive bid. Now, Treasury’s letter casts further doubt on the process it followed to arrive at the decision to sign on Afrirent.Afrirent said it had not seen the letter and defended its appointment, saying, “The contract with the City of Johannesburg was properly awarded, and we are properly performing in terms thereof.”
Another anomaly raised by the Treasury letter is that no contract between Mogale City and Afrirent existed at the time the City of Johannesburg asked to piggyback on the contract. Mogale City used a finance lease, meaning it would take ownership of the vehicles at the end of the contract. Joburg, on the other hand, is renting the vehicles, meaning it retains no assets at the end of the lease.
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