The controversial multibillion-rand contract between the City of Tshwane and GladAfrica has been cancelled following an agreement between the two parties.

Tshwane mayor Stevens Mokgalapa yesterday confirmed the cancellation of the R12bn contract.

The three-year contract, which was flagged by the auditor-general (AG), would have seen the company score about R1.2bn. It would come to an end on June 30.

To date, over R495m has been spent on the GladAfrica contract since its inception in 2017 to February 20.

"I am pleased to announce my intention to terminate the consultancy agreement between the City of Tshwane and GladAfrica Project Managers by mutual consent on 30 June 2019," said Mokgalapa.

Mokgalapa said it was anticipated that at the end of the 2018/2019 financial year-end, an additional R250m will be incurred.

He said he would ask council on Thursday that the recommendations of the auditor-general's report on the city's financial statements, relating to GladAfrica and all other irregular expenditure, be implemented.

GladAfrica and the city have been at the centre of allegations of tender irregularities since last year.

The firm was given a mandate to provide the city with project management support.

In a statement released yesterday, GladAfrica confirmed the agreement.

"We acknowledge the decision by the municipality to entrust us with the responsibility of concluding outstanding projects until the end of June 2019.

"Our teams stand ready to execute the assigned tasks as they've impeccably done since our appointment in 2017," the statement said.

Meanwhile, the EFF, which had not supported the move to oust Tshwane City manager Moeketsi Mosola over the contract, supported Mokgalapa's decision to cut ties.

"We have no problem with the termination of the contract, as long as it was done in the best interest of the city and the benefit for the people of Tshwane.

"Ultimately, it's the mayor's decision to review [contracts] if certain things are working or not," said EFF Tshwane leader MoAfrika Mabogwane.

Regarding Mosola's future, Mabogwane said the EFF were yet to make a decision.

However, the ANC sang a different tune.

ANC Tshwane regional chairperson Dr Kgosi Maepa said the adverse findings by the AG on GladAfrica essentially meant that there was no legal contract with the city.

"So there is no contract to terminate with GladAfrica in this regard.

"So the sub-average new executive mayor told the media a blue lie similar to his predecessor Mr Solly Msimanga when he said that he has cancelled the GladAfrica contract," said Maepa yesterday.