S. Africa Capital Mayor May Probe $716 Million in Contracts

  • ‘Things coming out of the woodwork,’ Tshwane mayor says
  • City would like to tap debt markets after fixing finances

The mayor of a municipal area that includes South Africa’s capital, Pretoria, said he may have to investigate more than 10 billion rand ($716 million) of contracts as the opposition Democratic Alliance leads an administration that took over the city following the ruling African National Congress’s loss of control in Aug. 3 local elections.

The Tshwane mayor, Solly Msimanga, said his administration on Wednesday uncovered a contract worth 100 million rand that had been paid without any work carried out. Msimanga will file charges next week, he said in an interview in Johannesburg, declining to give further details.

“We want to investigate a sizable chunk,” he said. “I initially thought it would be about 5 billion rand, but I might get under 10 billion, I might go over 10 billion, because these things are now coming out of the woodwork.”

The Democratic Alliance formed agreements with the Economic Freedom Fighters to oust the ANC in Tshwane, Johannesburg and Nelson Mandela Bay as the ruling party’s worst-ever election performance cost it control in three of South Africa’s eight major metropolitan areas. Both opposition parties have campaigned on a program of targeting graft.

‘Shady Dealings’

Msimanga said he would continue to bring charges against municipality employees implicated in “shady dealings that have been taking place” in the city and would even pursue those who left their jobs in anticipation of possible steps.

The city would like to raise money in the debt markets, but first needs to fix its finances, he said.

“We are in serious financial trouble as the City of Tshwane,” he said. “What we’ve inherited is a budget that is premised on money we will not be able to collect. Our budget has been drawn on a debt book that once we got in, we saw that realistically we will not be able to collect all that the budget is premised on.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE