A corruption probe into dodgy tenders worth R360-million at Pikitup ground to a halt after the state-owned waste utility mysteriously pulled the plug on the investigation.
The Sunday Times has established that Pikitup paid audit firm EY (formerly Ernst & Young) R6-million to investigate tender rigging – then halted the probe in October 2012 before it could prepare a final report.
An explosive draft report obtained during a joint investigation with Corruption Watch implicates top officials at Pikitup, including Zami Nkosi, the utility's former MD who now heads the Universal Service and Access Agency of South Africa, and Pikitup's entire bid adjudication committee.
Pikitup claims the report was handed to the Hawks early this year for further investigation. But this is disputed by Hawks spokesman Paul Ramaloko. "No arrest has been made, but investigations are under way whilst awaiting [the audit] report," he said this week.
The EY probe into 11 dodgy contracts awarded in 2010 and 2011 was launched after Pikitup workers went on strike to demand an investigation into corruption allegations.
Nkosi and the board resigned during the strike. Tahir Sema, spokesman for the South African Municipal Workers' Union, said last week the union had still not seen the report, for which it had been asking since October.
"The management is hellbent on concealing these reports," said Sema.
Menzi Luthuh, the union's Gauteng provincial organiser, has previously said it is looking at the possibility of going to court to get the report. Of contracts worth R365.9-million investigated, only one worth R4.3million was found to be above board.
EY found that officials had flouted Treasury rules and contravened municipal finance laws when awarding the rest of the contracts. Nkosi was also accused of not declaring a conflict of interest in a R36.9-million contract awarded to Sula Smart, a company that EY found was linked to his sister.
According to the report, Sula Smart was awarded a contract to supply and service vehicles after presenting an unsolicited bid. The Pikitup board approved the bid by invoking legislation that provides for emergency appointments.
EY found this to be irregular and suggested that Nkosi should face criminal charges. Nkosi claimed the investigation was fatally flawed because he was not given a copy of the draft report or a chance to respond to its findings.
However, the EY investigators said repeated efforts to interview Nkosi to discuss their findings had proved unsuccessful. Nkosi declined to respond to questions from the Sunday Times despite being given a copy of the report by this newspaper almost a month ago. Asked what steps Pikitup had taken to deal with the report's recommendations, Pikitup spokeswoman Desiree Ntshingila said the utility was still "concluding outstanding work on the recommendations and will then issue a statement".