The tender was valued at R85m and Sowetan has seen a receipt of a R24,5m payment in June 2018 from Rustenburg local municipality.
The Auditor-General SA (Agsa) flagged the company in May 2019 for irregularities in the awarding of the tender and for allegedly submitting invoices for work not done.
On May 3 2019, then municipal manager Nqobile Sithole issued a statement to the director of priority crime investigations (DPCI) reporting a suspicion activity of fraud/corruption with regards to the CMS tender of Bospoort expansion.
“The Agsa had found that there were potential irregularities in the procurement and contract management of the project and discrepancies with regards to the documents presented to it which in the view of Agsa may be indicative of fraud. This included the [municipality] making payments to CMS for the acquisition of materials, which material CMS in turn, had not purchased.”
The Agsa had also found that there was a “misalignment between the project milestones, the payments made to CMS, and the actual progress CMS made at the plant”.
Sithole’s statement further states that the scope of work was reduced without the necessary approval.
“The Agsa found that the CMS tender price had been reduced by roughly 25%, in contrast, CMS was no longer required to increase the plant’s capacity by 12-million litres per day, it was only required to increase the plant’s capacity by 3-million litres.”
The municipality opened a fraud case with the police in September 2019.
Weeks later, Sodi’s two companies, NJR Projects and Blackhead Consulting as well as CMS, were awarded as a joint venture a R292m tender to expand the Rooiwal wastewater treatment plant in Tshwane which would have possibly averted the cholera outbreak in Hammanskraal which has claimed 21 lives in the past few days.
This week, Tshwane city manager Johann Mettler said the first phase of the project was to be completed in May last year but it hit several delays until it was subsequently cancelled last year.
Sodi's partners CMS faced fraud before Tshwane deal
Firm flagged for sending invoices for work not done in Rustenburg
Just weeks before scoring a water treatment tender in Tshwane, a case of fraud was opened against Edwin Sodi’s partners, CMS Water and Engineering, for a fraudulent tender in Rustenburg.
CMS, a North West-based company owned by Rudolf Schoeman, was in 2019 accused of being appointed fraudulently without following the procurement rules for the upgrading and extension of Bospoort water treatment works in Rustenburg.
Schoeman has since died. A company director search by Sowetan revealed that he co-owned the firm with his father Dolf.
The tender was valued at R85m and Sowetan has seen a receipt of a R24,5m payment in June 2018 from Rustenburg local municipality.
The Auditor-General SA (Agsa) flagged the company in May 2019 for irregularities in the awarding of the tender and for allegedly submitting invoices for work not done.
On May 3 2019, then municipal manager Nqobile Sithole issued a statement to the director of priority crime investigations (DPCI) reporting a suspicion activity of fraud/corruption with regards to the CMS tender of Bospoort expansion.
“The Agsa had found that there were potential irregularities in the procurement and contract management of the project and discrepancies with regards to the documents presented to it which in the view of Agsa may be indicative of fraud. This included the [municipality] making payments to CMS for the acquisition of materials, which material CMS in turn, had not purchased.”
The Agsa had also found that there was a “misalignment between the project milestones, the payments made to CMS, and the actual progress CMS made at the plant”.
Sithole’s statement further states that the scope of work was reduced without the necessary approval.
“The Agsa found that the CMS tender price had been reduced by roughly 25%, in contrast, CMS was no longer required to increase the plant’s capacity by 12-million litres per day, it was only required to increase the plant’s capacity by 3-million litres.”
The municipality opened a fraud case with the police in September 2019.
Weeks later, Sodi’s two companies, NJR Projects and Blackhead Consulting as well as CMS, were awarded as a joint venture a R292m tender to expand the Rooiwal wastewater treatment plant in Tshwane which would have possibly averted the cholera outbreak in Hammanskraal which has claimed 21 lives in the past few days.
This week, Tshwane city manager Johann Mettler said the first phase of the project was to be completed in May last year but it hit several delays until it was subsequently cancelled last year.
A forensic report by Ligwa advisory services found that Tshwane’s bid evaluation committee (BEC) did not include legal and finance practitioners as required by the supply chain policy.
The five municipal officials who awarded the tender are undergoing a disciplinary hearing for scoring Sodi’s venture high points despite not meeting industry grade.
The joint venture meant that CMS, responsible for the plant design components, would get 40% of the tender while Sodi’s companies responsible for project management would score 60% of the value of the tender.
Investigators from Ligwa found that the structure of the deal was suspicious and odd, especially because Blackhead Consulting was not registered with the construction industry development board.
Yesterday, a spokesperson for the NPA, Henry Mamothame, said: “This matter [Rusternburg] was brought to us for a decision, but investigations are still underway.
“This matter was never enrolled for court. We are still gathering more information and working with other institutions such as Treasury.”
But the upgrade and extension of the water works have not yet commenced, said the NPA in a statement in February 2022.
DA councillor in Rustenburg Luan Snyders said the party was concerned over the alleged squandering and the delay in the upgrade of the Bospoort plant.
“[The] continued questions to the Rustenburg local municipality have resulted in very little response to what actually happened,” he said.