Umgeni Water broke National Treasury’s rules and awarded a R220m security tender to an ANC-linked company whose taxes were not in order at the time, says a City Press report. In December, Umgeni Water awarded the three-year tender to guard the water utility’s assets to Reshebile Aviation and Protection Services, which at the time owed SARS both payroll tax and VAT. Treasury forbids the awarding of tenders to companies which are not tax compliant.

Reshebile’s SARS statements for 2017/18, reportedly reveal that the company owes R2.6m in payroll taxes and R900 000 in VAT. Reshebile’s Central Supplier Database report, printed last week, shows that the last time the company was tax compliant was in April 2016.

City Press notes that Treasury regulations require that if a company that is not tax compliant wins a tender, it should be given seven days to comply or the contract will be handed to the second most favoured bidder. Umgeni Water spokesperson Shami Harichunder declined to comment on specific questions, saying many of them would likely ‘be part of court deliberations in the impending matter between Excellerate Services and Umgeni Water’ (the former had a month-to-month contract with Umgeni Water before Reshebile was awarded the tender), and that the matter was ‘sub judice’.

The report notes the ‘court deliberations’ Harichunder refers to concern an application brought by competitor Excellerate Services, which has requested that Reshebile’s appointment be reviewed and set aside. The case will come before the KZN High Court (Pietermaritzburg) this month.

Full City Press report