Tshwane asks Treasury to blacklist Sodi’s companies

Businessman Edwin Sodi faces a 10-year ban from doing business with the government with the City of Tshwane relying on at least one of the provisions provided by law to blacklist him and his two companies.

Tshwane has written to National Treasury to restrict Sodi and his companies NJR Projects and Blackhead Consulting, which were part of a joint venture to upgrade the Rooiwal wastewater treatment plant, due to failure to perform.

The other company involved in the R292m project is CMS Water Engineering.

Tshwane wants the companies and their directors to be blacklisted for 10 years. This means they cannot do any business with the government for the duration of the restriction.

According to the National Treasury’s blacklisting of suppliers/persons fact sheet, an organ of state should inform companies and its directors of its intention to restrict them from doing business with the state if it discovers that the supplier has committed fraud or corruption or failed to perform on a contract, among other things.

The fact sheet states that a company and its directors must be given a reasonable time within which to respond, and once a response is received, the organ of state must consider the merits before taking any action to blacklist.

Treasury’s restricted supplier and tender defaulter report shows that 177 companies, including individuals, have been blacklisted.

Some have been blacklisted for periods between five and 10 years.

City manager Johann Mettler said: “At my discretion as an accounting officer and in line with the relevant legislation, I have requested Treasury to impose restrictions on the said companies as well as their directors to prohibit them, as suppliers, from doing business with the public sector.”

The city informed Sodi of its intentions to blacklist him last year and in his representation on why the municipality should not go ahead with the restriction, Sodi blamed his late partner and director of CMS Rudolf Schoeman, saying the completion of the project failed due to his fraudulent conduct.

Sodi’s lawyers wrote to the city requesting it to “urgently” clarify whether it had already decided to blacklist the company, adding that, if so, they were instructed to challenge such a decision.

Part of the letter that Sowetan has seen reads: “The consequence of the fraud perpetrated by Mr Schoeman resulted in NJR laying criminal charges with the SAPS and pursuant to an investigation, Mr Schoeman was arrested and charged with fraud.”

Sodi said NJR was severely prejudiced by the criminal conduct of a rogue joint venture partner.

He said it was “not fair or reasonable to hold the directors and shareholders of our clients’ responsible in any way for the CMS’s shortcomings, which rendered the joint venture unable to deliver on the project, bearing in mind that NJR tendered a rescue plan and Blackhead was not appointed to the project”.

The companies were in 2019 awarded the tender to upgrade the plant to improve the quality of water in the cholera-hit Hammanskraal.

More than 20 people died in May 2023 from the waterborne disease. The contract was terminated in May 2022 and criminal charges laid against the three companies.

Sodi’s lawyers also said the restriction would be “severe and has far-reaching consequences for our clients”. 

However, in a letter to Sodi’s lawyers, Geraldine Burger from Diale Mogashoa Attorneys, who is representing the city, said: “Please note that after further consideration of the reasons set out in your letter, the city has resolved to list your clients, NJR Projects (Pty) Ltd and Blackhead Consulting (Pty) Ltd, together with their respective directors as restricted suppliers on the National Treasury database.”

The city also wants CMS and its directors to be blacklisted. 

Burger said the joint venture showed no indication of completing the Rooiwal wastewater project, which had given rise to a humanitarian crisis in Pretoria north “due to some of the sludge from the plant spilling into the surrounding rivers and contaminating some of the potable water”.

“In light of the above issues, the city was faced with a real dilemma in that it wanted the project to be finalised but at the same time it was contracted with a supplier who was either not willing or unable to complete the project.”

Sodi’s lawyer Ian Levitt on Monday said: “My client has no comment at this time.”

Five municipal officials who awarded the joint venture tender are still undergoing a disciplinary hearing for scoring the companies high points despite not meeting industry grade.

City spokesperson Selby Bokaba said the disciplinary hearing would be concluded later this month.

“The reason why there was a delay is because the attorney [representing the officials] died in a car crash in December and as a result they had to get a new representative,” Bokaba said. 

chabalalaj@sowetan.co.za