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City of Cape Town puts companies implicated in state capture report on terms, evaluates contracts

  • The City of Cape Town is evaluating its contracts with companies named in the State Capture Inquiry report.
  • The City has written to the companies, stating the contracts could be revoked.
  • Mayor Geordin Hill-Lewis says it has been done to guard the City’s reputation and send a message against corruption.

The City of Cape Town has laid down the law for companies implicated in the State Capture Inquiry report, saying it is evaluating its contracts with them.

The City’s legal department wrote letters to Bidvest Prestige, Ernst & Young, PWC, EOH, Nedbank and Pegasus Advisory on the instruction of Mayor Geordin Hill-Lewis, asking them to come clean or risk cutting ties with the city. 

The first of three parts of the commission, chaired by Acting Chief Justice Raymond Zondo, was released in January, and the second last week. 

News24 has seen a draft of the letter sent to the companies. 

“As an organ of state, the City is obliged to ensure that its business is attended to in accordance with the democratic values and principles enshrined in the Constitution, including that its reputation and the public’s trust is protected, and that a high standard of professional ethics is promoted and maintained,” it read.

“The City is in the process of evaluating its existing contractual relationships with its various suppliers in light of the findings in the Zondo Commission report issued recently [‘the report’].

“As part of this process, your contract with the City is being evaluated. The City requires clarification regarding the implication of your company in malfeasance and/or corruption as per the findings in the report.

The letters reminded the companies that Clause 101 the City’s Supply Chain Management Policy allowed it to revoke or cancel a contract where it might result in reputational risk or harm to the City.”The City is considering whether or not it may invoke Clause 101 of the SCM [Supply Chain Management] Policy in order to cancel the contract, and it is requested that you indicate why the City should not invoke Clause 101 of the SCM Policy.”

The City also requested the contractors to provide written assurance their bid for a contract with it “was made in a transparent, fair and compliant manner and that it have at all times maintained a high standard of ethics in terms of your contractual relationship with the City and performance under the contract”.

They were also asked to confirm that no persons involved or implicated in relation to the allegations and or findings of the Zondo Commission have been part of or involved in their contract with Cape Town.

Asked what the initial response to the letters had been, Hill-Lewis said: “Nervousness!

“We have a responsibility to guard our reputation, and because we want to send a message that companies who involve themselves in corruption will face backlash beyond just painfully slow criminal action,” he added about the City’s motivation.

Once the responses have been received, the City will decide whether it will revoke the contracts.

Responses have been received from Nedbank and EOH, News24 understands. 

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