Council remains mum on controversial sale of erven

The Makhado Municipality has remained tight-lipped over the controversial sale of a park in Louis Trichardt. The past week, however, it transpired that the council also refused to supply reasons to the bidders as to why the two erven had not been sold to the highest bidders. The matter may now be heading to court.

Last week, the Zoutpansberger reported on the controversial sale of a public park in one of Louis Trichardt’s residential neighbourhoods. The park is surrounded by Baobab Street (opposite the Soutpansberg Spar shopping centre) and is adjacent to the N1.

Council decided in July 2018 to sell ERF 1952 and ERF 3456 by means of a public tender. Normally, such a prominent property would be advertised in a number of media, as well as the Provincial Gazette, to attract the maximum number of buyers. This would be in line with Section 217 of the Constitution, as well as various laws that place the onus on the different spheres of government to maximise value for municipalities. In this case, however, the two erven were only advertised along with numerous other tenders in one regional newspaper, in very small print, in January this year.

When rumours started doing the rounds that the park had been sold off, the Zoutpansberger enquired from the municipality’s spokesperson as to who the buyers were and what prices had been paid for the erven. After almost a month of follow-up requests, what became clear was that the spokespersons were being frustrated by the officials involved and were also unable to get answers. The municipal manager was then approached with the intention to file a Public Access to Information (PAIA) request. Only after that, limited information became available.

Who are the buyers?

The information made available by the municipality’s spokesperson, Mr Louis Bobodi, as well as the documents subsequently published on the municipality’s website, indicate that the bids were awarded to two companies, Banyana Enterprise and Trendy Tiles & Sanitary Ware. Trying to find more details on these companies proved to be difficult, as no Trendy Tiles & Sanitary Ware is listed on the CIPC database and two entities called Banyana Enterprises exist.

The past week it transpired that the municipality had misspelt the name of the company that received the bid to buy Erf 1953. This is the bigger part of the park but furthest away from the N1. The name should be Trrendy Tiles & Sanitary Ware, with the only director being listed as Louis Trichardt businessman Abu Bakr Akoo. Akoo has other business interests in the region, such as the Louis Trichardt Build-it franchise.

According to the list provided by the municipality, eight bids were received for ERF 1953. The lowest bidder was C Matodzi, coming in at R1,2 million, with Iceburg Trading 751 submitting the highest bid of R2,3 million. Trrendy Tiles & Sanitary Ware offered R1,85 million for the erf. The municipality was asked why the highest bid had not been accepted but did not supply any answers.

What was more difficult to establish was exactly who had bought the other portion of the park. According to the CIPC records, two companies are listed under that name. A Banyana Enterprise, based in Mbombela, was registered in March 2018, with Ester Mhlongo being listed as sole director. A month later, another company going by that name was registered, with the only active director being listed as Nelson Lobelo, who hails from North West.

To further complicate matters, rumours in town had it that the erf was subsequently bought by (or the tender was awarded to) Southern Ambition 1478. This company has another local businessman, Asim Patel, listed as sole director.

Southern Ambition originally offered the municipality R1,6 million for ERF 3456, which was the highest bid. No certainty exists as to why the bid was awarded to Banyana Enterprise, which had only offered R1,2 million. When the municipality was asked to supply reasons, the spokesperson was unable to respond satisfactorily. “The winning bidder ticked all the boxes relating to the prescribed requirements. All the other ones could not tick all the boxes,” Bobodi said.

No reasons given

After the newspaper report on the transactions appeared last week, the Zoutpansberger received a phone call from Mr Cedric Marageni, the sole director of Iceburg Trading. Although the company has its registered address listed as Kimberley in the Northern Cape, it also has a local presence. The company is involved in construction and development with a well-established track record.

“To my shock they gave (the tender) to a company that’s way below that (we offered),” said Marageni. He said that, when hearing that the tender had been awarded to another company, he had phoned the municipality to try and establish the reasons. “I spoke to an official who was seemingly just as surprised and shocked, because it was not that complicated,” said Marageni.

After being unable to get reasons from the officials, Marageni asked his lawyers to follow up with letters to the municipality, which they subsequently did. The lawyers were also unable to elicit a response from the municipality. “The lawyers advised that we should go to court,” he said. Marageni added that his company had been very busy over the past few months, not leaving him much time to follow up on this matter. “They cannot bother to answer us. Now we just have to take it to court,” he said.

Not a clean record

The Makhado Municipality has been criticised in the past for the manner in which procurement processes are being handled. In the latest available report of the auditor-general (AG), the Makhado Municipality is slammed for not following proper tender processes, which is one of the reasons the municipality did not get a clean audit report. The AG pointed out that this resulted, among others, in irregular expenditure of R31 158 043 during the 2017/18 financial year.

Municipalities must adhere to legislation that prescribes how procurement processes are being handled. Any tender where the bid is above R200 000 needs to be evaluated by committees. Three types of committees handle the procurement, namely a:
- Bid Specifications Committee
- Bid Evaluation Committee
- Bid Adjudication Committee

The municipality was sent a detailed list of questions last week, requesting more information on how these committees function and who the officials involved in the adjudication process are. (Elected councillors are not allowed to serve on these committees). In spite of several requests to respond, the municipality has not done so.

News - Date: 28 September 2019

Anton van Zyl

Anton van Zyl has been with the Zoutpansberger and Limpopo Mirror since 1990. He graduated from the Rand Afrikaans University (now University of Johannesburg) and obtained a BA Communications degree. He is a founder member of the Association of Independent Publishers.

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