Dramatic revelations of the costly bungling in the controversial N2 Gateway project show that contractors started work without signed contracts, approved funding or even clear guidelines on what they were supposed to build.
The insights provided to the mayoral committee (Mayco) reveal the fullest picture yet of a politically driven development in which millions of rands were squandered because basic contractual procedures were abandoned in the haste to get housing on the ground.
The city is now set to call for a forensic audit of all contracts in relation to the N2 Gateway project.
The extent of the bungles came to light in a tense grilling of senior city officials by Mayco on Friday.
The public servants of Cape Town were all but powerless.
At issue was a R28-million tab the city was being asked to pick up for overruns and for multi-million rand claims by disgruntled contractors.
Mayco decided that in the absence of a thorough forensic audit, it would not accept liability.
City, provincial and national officials were fingered for their role in the saga.
In an uncharacteristic move, Mayco initially decided to close the meeting to the public because of the sensitivity of the matters under discussion. The press had to leave.
However, mayor Helen Zille, who was resting in her office because of an illness, was alerted and insisted the debate be opened. By then, most of the journalists had gone.
The N2 Gateway project was the ‘right’ kind for Cape Town.
What ensued was akin at times to a grand jury as Mayco pressed officials to provide clear answers.
What is apparent is that the public servants of Cape Town were all but powerless as they were caught up in a politically driven development agenda that took on a mad-cap quality because of the haste with which it was being implemented.
It emerged that contractors were on site, building structures at vast cost, in the absence of duly signed contracts or clear instructions on what was to be built, and before there was even a project budget.
Letters of appointment issued to contractors in the first phase of the rushed exercise, to which were attached a host of specifications, restrictions and objectives, were withdrawn halfway through the process, and new letters issued without any conditions at all.
The politicians are former mayor Nomaindia Mfeketo, provincial housing MEC Richard Dyantyi and national Housing Minister Lindiwe Sisulu. The officials are acting director-general of the national Housing Department Ahmedi Vawda, provincial housing department head Shanaaz Majiet and city executive director Rushj Lehutso.
It is apparent the three officials were acting under political instructions, but it is not known what the specific instructions were, or on what authority they were given.
Mfeketo, Dyantyi and Sisulu - referred to in reports as “M3″ - may hold the key to the unanswered questions.
The city’s most senior planner, Stephen Boshoff, said the N2 Gateway project was the “right” kind for Cape Town, offering a development model the city should use on a wider scale.
And, as Mayco member Dan Plato repeatedly stated, the DA-led multi-party forum “is committed to the N2 Gateway project and to building houses for the poorest of the poor”.
However the focus of Mayco’s questions on Friday was the costly departures from standard approvals processes.
The questioning began with Mayco member for finance Ian Neilson wanting to “understand how this project unfolded”, and to know who was responsible for setting standards, approving designs and issuing orders.
It fell to senior officials - director of human settlements Seth Maquetuka, city project co-ordinator for the N2 Gateway Peter Oscroft and manager of finance: housing Wayne Muller - to try to give clarity on these matters.
Among the revelations were that:
Neilson wrapped up the meeting by saying: “From what we have heard - and it seems fuzzy as to who made what decisions to do what - I am not in a position to know to what extent the city is liable to pay the R28m cost overrun.
“It is not clear if it was the city, the province or the national government that made decisions which led to the overrun. Until we know that, we cannot make that decision.
“And clearly, the whole process was not a way to proceed in getting houses built. We cannot replicate this process in the city again. And calling it a pilot project is not an excuse not to do the job properly.
He said a thorough forensic investigation was needed. - Cape Argus
The insights provided to the mayoral committee (Mayco) reveal the fullest picture yet of a politically driven development in which millions of rands were squandered because basic contractual procedures were abandoned in the haste to get housing on the ground.
The city is now set to call for a forensic audit of all contracts in relation to the N2 Gateway project.
The extent of the bungles came to light in a tense grilling of senior city officials by Mayco on Friday.
The public servants of Cape Town were all but powerless.
At issue was a R28-million tab the city was being asked to pick up for overruns and for multi-million rand claims by disgruntled contractors.
Mayco decided that in the absence of a thorough forensic audit, it would not accept liability.
City, provincial and national officials were fingered for their role in the saga.
In an uncharacteristic move, Mayco initially decided to close the meeting to the public because of the sensitivity of the matters under discussion. The press had to leave.
However, mayor Helen Zille, who was resting in her office because of an illness, was alerted and insisted the debate be opened. By then, most of the journalists had gone.
The N2 Gateway project was the ‘right’ kind for Cape Town.
What ensued was akin at times to a grand jury as Mayco pressed officials to provide clear answers.
What is apparent is that the public servants of Cape Town were all but powerless as they were caught up in a politically driven development agenda that took on a mad-cap quality because of the haste with which it was being implemented.
It emerged that contractors were on site, building structures at vast cost, in the absence of duly signed contracts or clear instructions on what was to be built, and before there was even a project budget.
Letters of appointment issued to contractors in the first phase of the rushed exercise, to which were attached a host of specifications, restrictions and objectives, were withdrawn halfway through the process, and new letters issued without any conditions at all.
The spotlight falls on six people - three politicians and three senior officials - who formed two committees that drove the project.
The politicians are former mayor Nomaindia Mfeketo, provincial housing MEC Richard Dyantyi and national Housing Minister Lindiwe Sisulu. The officials are acting director-general of the national Housing Department Ahmedi Vawda, provincial housing department head Shanaaz Majiet and city executive director Rushj Lehutso.
It is apparent the three officials were acting under political instructions, but it is not known what the specific instructions were, or on what authority they were given.
Mfeketo, Dyantyi and Sisulu - referred to in reports as “M3″ - may hold the key to the unanswered questions.
The city’s most senior planner, Stephen Boshoff, said the N2 Gateway project was the “right” kind for Cape Town, offering a development model the city should use on a wider scale.
And, as Mayco member Dan Plato repeatedly stated, the DA-led multi-party forum “is committed to the N2 Gateway project and to building houses for the poorest of the poor”.
However the focus of Mayco’s questions on Friday was the costly departures from standard approvals processes.
The questioning began with Mayco member for finance Ian Neilson wanting to “understand how this project unfolded”, and to know who was responsible for setting standards, approving designs and issuing orders.
It fell to senior officials - director of human settlements Seth Maquetuka, city project co-ordinator for the N2 Gateway Peter Oscroft and manager of finance: housing Wayne Muller - to try to give clarity on these matters.
Among the revelations were that:
- There was “such haste” with the project that the design work and the initial construction work were effectively “parallel processes”, Oscroft said. This led to some of the cost overruns because it was found that the ground was poor and additional foundation construction was needed. Further cost overruns arose because greening and landscaping of the sites were not part of the initial calculations.
- “Pricing was not determined before work was started,” said Oscroft. “We were a long way down the track with Joe Slovo phase one before the final prices were assembled. To a degree, this was as a result of poor project management by consultants and a lack of capacity in oversight on what those managers were doing at that time.”
- Initial letters of appointment to contractors on April 18 last year, which “set strict terms of compliance” with the Municipal Financial Management Act and with subsidy and grant funding requirements, were withdrawn on instruction from Ikhwezi, and were replaced, according to a city report, by “revised letters with the original restrictive conditions removed”.Oscroft told Mayco: “I cannot answer who instructed Ikhwezi, but the project managers, Cyberia, were given the instruction to withdraw the original letters and substitute them with letters of appointment which had less strenuous requirements.”
- Maquetuka told Mayco that the fact that this was a pilot project was the key context.He said: “The steering committee was given a mandate (by the politicians) to drive the process. A project management unit was appointed to deal with the day-to-day management. Most of the decisions flowed in that fashion.”On the question of a political mandate, Maquetuka said: “In terms of mandates, from a policy point of view, the highest decision-making body was M3 (Mfeketo, Dyantyi and Sisulu). That’s where the authority came from.”
Neilson wrapped up the meeting by saying: “From what we have heard - and it seems fuzzy as to who made what decisions to do what - I am not in a position to know to what extent the city is liable to pay the R28m cost overrun.
“It is not clear if it was the city, the province or the national government that made decisions which led to the overrun. Until we know that, we cannot make that decision.
“And clearly, the whole process was not a way to proceed in getting houses built. We cannot replicate this process in the city again. And calling it a pilot project is not an excuse not to do the job properly.
He said a thorough forensic investigation was needed. - Cape Argus
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