DA Ndlambe to lay charges if reverse osmosis millions are not repaid

DA pushes municipality for action after Talk of the Town provides correspondence from Quality Filtration Systems

The Democratic Alliance (DA) says it will not hesitate to lay criminal charges after it came to light that Quality Filtration Systems (QFS) is unwilling to repay the R20-million it received in advance after being awarded the tender to provide a R100-million reverse osmosis (RO) plant for Ndlambe Municipality.

This follows after Talk of the Town sent a query to QFS, asking if the company had paid back the R20m deposit for the RO plant paid by Ndlambe Municipality, in light of the high court judgment on July 7, and if not, what the reason for the delay was.

Thus far the only response from the municipality has been that “Our lawyers are busy with the matter, the municipality will issue a statement at the appropriate time.”

TotT sent a query to QFS managing director Herman Smit in Cape Town, but the answer came from QFS Eastern Cape director Musawenkosi Ndlovu, who said: “QFS has determined the equipment manufactured for the Kowie project is valued higher than the payment paid to QFS. Various administrative shortcomings have resulted in substantial damages to QFS.”

Ndlovu further added that “there is no inclusion in the high court judgement that QFS repay the funds paid.”

TotT provided Ndlovu and Smit with the relevant pages from the judgment in which Judge Phillip Zilwa said: “…once the contract is set aside, QFS must effect restitution and repay that amount to the municipality”; “a tenderer like QFS is not entitled to benefit from an unlawful contract”; and “…by not participating in this application QFS has acquiesced to the possible outcome of the cancellation of the contract and the resultant need for it to refund the R20,000,000 paid to it by the municipality.”

Judge Zilwa then issued an order declaring the tender award unlawful and setting it aside. He also set aside any agreement concluded between Ndlambe Municipality and QFS.

However, Ndlovu insisted that “QFS has complied fully with the honourable judge’s order.”

TotT provided this correspondence to DA and EFF councillors on the Ndlambe council for their comment.

In response DA caucus leader Ray Schenk issued a statement saying Ndlovu’s remarks were “blatantly absurd and a false interpretation of the judgement”.

“The judgement notes that ‘once the contract is set aside, QFS must effect restitution and repay that amount to the municipality.’ And while that statement does not form part of the actual order, it is nevertheless trite and part of the common law,” Schenk said.

The court noted that the R20m was paid to QFS by Ndlambe Municipality on May 25, before the tender had been signed by the parties.

“It should also be stressed that all parties were aware at this time that the matter was before the court,” Schenk said.

“The Ndlambe Municipality has received no value for the money it paid to QFS. This alone would be grounds to seek its recovery. QFS’s claim that that they have incurred costs which exceed the value of the money paid is irrelevant as public money must be fully accounted for.

“The court also ordered that the contract was unlawful and was set aside. This renders the process invalid from the outset and any payments made or services rendered must be restored,” Schenk continued.

He said the DA would submit a motion to council calling for the municipality to immediately initiate legal action against QFS for the recovery of the payment made, plus interest accrued.

“Should there be no movement in this regard within the next 14 days, the DA will have no hesitation in laying criminal charges against the directors of QFS in their personal capacities for the theft of municipal funds.

“We cannot allow our municipality to be looted with impunity, especially in a time of crisis. The DA will not permit this matter to be brushed under the carpet,” Schenk said.

DA calls on SIU to investigate Ndlambe Municipality’s unlawful tender for RO plant

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