eThekwini Municipality City Manager Musa Mbhele said he has saved the municipality millions of rand by not signing off on documents while wearing a blindfold.

Mbhele has come under public scrutiny following three court cases that cost the municipality millions, involving Daily Double Trading 479 CC, Solbeth Security and Risk Management Services, and Bless Joe Trading CC. 

The Constitutional Court dismissed the municipality’s attempt to overturn a prior ruling, which held it liable for R30 million that is owed to a service provider, Daily Double Trading 479 CC, stemming from 2013.

Daily Double Trading challenged the municipality’s decision to cancel its contracts, and an out-of-court settlement agreement was reached between the parties. However, the city argued that the lawyer who was involved in the agreement had not been authorised to make such a deal. 

The city challenged the settlement agreement in court, but the courts have ruled against it, and the municipality’s latest bid to appeal was dismissed this week by the Constitutional Court, which found it had no reasonable prospects of success.

In another case, businessman Siyabonga Xulu is demanding payment of over R413 million due to his company, Solbeth Security and Risk Management Services. 

Xulu alleged that the municipality refused to pay for the critical security services his company provided to senior officials, including former city manager Sipho Nzuza, dating back to 2019.

Lastly, the municipality hired tents and ablution facilities from Bless Joe Trading CC in April 2019 to provide temporary emergency accommodation for flood victims in Tehuis, Umlazi.

In court papers, Bless Joe Trading CC provided a marquee, flooring, eight public toilets, and 50 chairs at R190,000 per day for 14 days.

In March 2020, the municipality cancelled the contract, stating that they would provide alternative shelter for the flood victims, but Bless Joe Trading CC argued that the marques were not evacuated.

In court papers, the company owner alleged that when he went to pick up his marquee and toilets, he was told by the occupants that they would not move because they had not found alternative accommodation. He, therefore, billed the city even though the contract expired, claiming R73 million. 

Malusi Mhlongo, the Legal and Compliance Services head, and Mbhele addressed key issues affecting the city administration and recent legal matters.

Mhlongo said there has been criticism about the conduct of the legal strategy of cases, most of the time directed at the city manager.

“Any decision that the city manager takes, he takes it on my concurrence on the basis of my advice. He relies on me for legal matters,” Mhlongo explained. 

He said they respected the court’s decision and that payment of legal costs to legal practices does not constitute wasteful expenditure because they paid for the service they received. 

He said that when the City Integrity and Investigations Unit (CIIU) recommended that two contracts be terminated because they found misconduct at Daily Double Trading 479CC, the company then sued the city for R44 million. 

“We are paying R30 million and interest to a service provider for no services received, and that is what the city manager is trying to resist. We are paying because it was authorised by a person who was not properly authorised to give that instruction. Nobody had the authority to reach a settlement that was over R5 million without going to council. This was handled by former city manager Sipho Nzuza. The judge ruled on the matter,” Mhlongo said. 

He said the matter with Bless Joe Trading CC went through the court process, and they were now abiding by the court ruling to pay based on a market-related amount for a year. 

“If the market-related value is between R5,000 and R20,000 per day, it will be a saving. If we are unable to agree on what constitutes a market-related amount, we can argue the amount in court,” he said. 

Mhlongo said the Solbeth matter had a long history preceding Mbhele’s tenure in office. 

“The service provider indicated that he would not be able to share what he was doing because it was top secret and involved intelligence work. Our hands are tied because we cannot pay for something we do not know about. We are waiting for a court date over the matter,” Mhlongo said. 

Mbhele said the municipality had won many complex legal battles under Mhlongo’s supervision that were not published in the media.

“We protected and defended the ratepayers, right up to the Constitutional Court. The city is in a far better position than it would have been if we just signed an agreement blindfolded,” he said. 

zainul.dawood@inl.co.za

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