The community of Lejweleputswa District Municipality (LDM) is concerned about allegations of corruption and maladministration within the municipality.
The residents said the allegations have caused significant harm to the public trust and the district's financial health.
This comes after the Department of Trade, Industry and Competition (DTIC) approved the funding of more than R45 million for the application of the refurbishment of Matjhabeng Industrial Park.
The funding was approved on August 23, 2023.
The project falls under the Lejweleputswa Development Agency (LDA), a wholly owned entity of LDM.
The project that commenced on November 1, 2023, is expected to be completed on December 31, 2025.
However, in a statement, residents said the project has been riddled with corruption and maladministration, adding that the municipality allegedly wanted to pay Ntiyiso Consulting Group (NCG), transactional advisor, 10% despite a legal opinion being sought and disagreed with payment.
NCG confirmed it was appointed in September 2021 but denied the allegations. The group said it was appointed through a competitive process to provide and implement turnaround solutions on identified projects on a risk basis for 36 months.
The company’s spokesperson Regomoditswee Mavimbela said: “We refute the above allegations that Ntiyiso Consulting Group was paid 10% transaction advisory fees. We state for the record that, we were assigned the project of raising funds to revive and refurbish the Matjhabeng Industrial Park,” said Mavimbela, adding that NCG signed a service legal (SLA) agreement that stipulated that the fee should not be more than 10%.
“NCG undertook the necessary transaction advisory services and successfully raised funding for the industrial park development. After funding for the project was successfully raised, the success fee became due and payable to NCG.
An invoice has been submitted for the work completed fundraising assignment, however, to this date, the payment has not been received by Ntiyiso Consulting Group,” Mavimbela said.
Mavimbela said the company was not aware of any legal letter but instead, it has received communication from LDA acknowledging their invoice submission stating that “we should be paid as per the signed SLA.
Selele Attorneys, which provided the legal advice, said the law firm received various documents including a letter from Matjhabeng Local Municipality committing to pay 10% of the qualifying infrastructure development.
The law firm said it also received an initial invoice of R4 973 957 from Ntiyiso on October 2023 and the revised invoice of R4 227 865 on the same day. The attorneys said this revised invoice was not accompanied by annexures to show how much was charged and for what.
The attorneys said the LDA board members agreed that the service provider must be paid but the position of Matjhabeng for paying the 10% co-funding should be looked at. There was also a concern that the rate that Ntiyiso charged was not in line with the industry rates.
The attorneys concluded that Ntiyiso should not be paid any amount until it has submitted invoices for each item it claims. It said the invoices must indicate dates, time spent, and the hourly charges for work done.
Selele Attorneys said in terms of clauses 15.1 and 15.1.1 of the DTIC agreement, the department shall be entitled to terminate the funding agreement should the funds be used for any purpose other than the purpose provided for the DTIC agreement.
The residents said the legal advise report of how things were done.
“There would not be a legal advice if people were not asking questions,” residents said.
Matjhabeng and LDA did not respond.
Matjhabeng spokesperson Tshediso Tlali, who is also an LDA board member, said Matjhabeng was the beneficiary and questions should be directed to LDA.
LDA spokesperson Thabo Dlamini said the project was 70% complete, and Ntiyiso was not paid any 10% of the money, for services that were never provided.
DTIC spokesperson Bongani Lukhele said the department has not been informed of the stated allegations. Lukhele said the department would wait for any formal complaints addressed to it - and upon receipt, it will conduct the necessary inquiry to determine their veracity.
“The department is well informed on the construction phases and status of the project. There is a Project Steering Committee comprising of government, district agency and local community leadership that sits monthly to monitor and guide the implementation processes of the project,” he said.
The name Lejweleputswa means ‘gray rock’, describing the rich history of the area in gold prospecting and mining. The municipality is situated in north western part of the Free State and is made up of five local municipalities - Matjhabeng, Masilonyana, Nala, Tokologo and Tswelopele.
In 2022, the Special Investigating Unit’s report found that the procurement process followed by the municipality in procuring hand sanitiser and disinfectant was irregular, prompting referrals for disciplinary action against three municipal officials.
This resulted in irregular expenditure amounting to R198 792.74.