Johannesburg: The Special Investigating Unit (SIU) has welcomed a Special Tribunal ruling declaring low-cost housing contracts-worth some R30 million-awarded to three service providers in the eThekwini Metropolitan Municipality as unlawful and unconstitutional. The companies involved, Woodglaze Trading (Pty) Ltd, Madupha Business Enterprise CC, and Ready Homes CC, were tasked with developing housing units under the municipality's Human Settlements Infill Housing Programme (MHSIHP).
According to South African Government News Agency, the SIU investigation revealed that these companies unlawfully benefited approximately R29 million due to procurement irregularities. The contracts arose from a 2000 resolution by the municipality to use vacant sites for affordable housing for first-time homebuyers in lower- and middle-income groups. The municipality planned to sell serviced land and bulk sites to service providers, who would develop them into residential dwellings.
The investigation found that Madupha Business Enterprise and Ready Homes were appointed without a public advertisement or the necessary evaluation and adjudication by relevant municipal committees. Similarly, Woodglaze Trading's continued involvement was not subjected to the required statutory review or public procurement process.
Further findings indicated that Madupha Business Enterprise and Ready Homes initially participated as subcontractors to Sahamba Construction, the successfully appointed service provider. The companies sold properties to unapproved buyers and misused sites for unauthorized commercial developments, profiting from these sales contrary to the program's objectives.
The Tribunal's ruling included several stipulations: no immediate repayment order was made, but the service providers may complete and sell dwellings already commenced. However, they are prohibited from starting new constructions under the invalid contracts. Future developments under the program must comply with lawful procurement processes.
The SIU, empowered by Proclamation R.9 of 2021, emphasized its commitment to investigating maladministration and improper conduct within eThekwini Metropolitan Municipality, reinforcing constitutional values in state contract management.