Johannesburg – Mayor of Johannesburg, Herman Mashaba tweeted about the termination of the contract between the city and Setheo Engineering:
Setheo was awarded a R168 million contract to build a new substation in Eldorado Park, but has failed to deliver on the contract despite receiving R66 million from the City by July this year. pic.twitter.com/i3lajfggnV
— Herman Mashaba (@HermanMashaba) December 5, 2017
He also said he and the head of the city’s internal forensic investigations unit, Shadrack Sibiya, held an urgent meeting on Saturday afternoon with the national leadership of the Hawks, including acting head Lt-Gen Yolisa Matakata.
“This follows serious allegations of corruption being brought to my attention relating to a contract awarded to build a new electricity substation in Eldorado Park,” he said.
On Friday Mashaba met subcontractors who were owed R1.8 million by the contractor.
“I was shocked at the details of corruption, fraud and nonpayment detailed by them. This week tensions rose at the City Power substation in Eldorado Park when employees of subcontractors protested against the contractor and threatened to burn the substation down.”
This narrative of corruption needs to end as it attacks our most vulnerable residents. Accountability is what we need. No compromise. pic.twitter.com/LH3F1cnIAg
— Herman Mashaba (@HermanMashaba) July 3, 2017
“The case was brought to my attention earlier this year when employees of sub-contractors connected to the construction project protested against City Power’s main contractor, Setheo, and threatened to burn the sub station down.
The Setheo Engineering is a company that was awarded a contract by City Power in 2015 for the construction of a new substation in Eldorado Park, worth R126 million.
“It was the same company that colluded with the two City Power officials, who were in June suspended, for a forward payment of almost R66 million, without evidence of any physical work done at the substation,” he said.
Mashaba alluded that these arrests come after his visit to the substation in late June with all stakeholders, including representatives from Setheo Engineering.
“During this visit, I instructed City Power Officials to request Absa Bank to verify the authenticity of the bank guarantee Setheo Engineering had submitted to Council, which totaled just over R14 million,” said Mashaba.
He added that an investigation by Absa then revealed that the bank guarantee was indeed fraudulent.
It further revealed, amongst other things, that Setheo Engineering holds no accounts with Absa; that the account number mentioned in the guarantee does not exist and that the Absa logo was copied and pasted from an unknown source.
I hope Setheo Engineering takes advantage of your free advice and sue me personally for defamation. Our courts are fortunately not yet captured. Take advantage now https://t.co/Pw5OU2BOom
— Herman Mashaba (@HermanMashaba) December 5, 2017
Community leaders of Eldorado Park and surrounds prevented the attempted destruction of the substation which was used to supply electricity to Eldorado Park and surrounding areas, he said.
“The contract to build a new substation in Eldorado Park is worth R126 million. Despite receiving a significant remittance from the city, thus far totalling R66 million, the contractor has failed to deliver on a number of specific tasks which have already been paid for.
“I am extremely grateful that the leadership of the Hawks agreed to a meeting at such short notice and have also agreed to prioritise an investigation into this matter,” Mashaba said.
Working together with institutions such as the Hawks was vital in ensuring that corrupt individuals faced the full might of the law and that justice was served.
“I am committed to ensuring that legal action is taken against the contractor for the recovery of monies owed to the residents of this city. Furthermore, we will pursue criminal charges against the contractor and any city officials found wanting.
“Corruption has no place in this administration and we will work tirelessly and in collaboration with institutions such as the Hawks to ensure that the residents of Johannesburg receive the quality services they deserve,” Mashaba said.
Setheo Engineering response was also not what was expected and further complicated the issue :
If this is an official response of Setheo Engineering, I am truly sad for the company https://t.co/ZDU4TnKhNg
— Herman Mashaba (@HermanMashaba) December 5, 2017
This letter is nothing but pure nonsense. Why should you bring the DA in your argument,including the fact that they run to the courts? Do you have a problem with people who uses the courts of law to resolve legal issues? You sound very dodgy
— Mr Groove (@Sejabanatota) December 5, 2017
Response letter is familiar n sound like crook hands caught in a cookingjaa😜😜 "butternut reply"
— Dolly Seshoka (@dolly_seshoka) December 5, 2017
