SIU to recover R76m after SCA dismisses engineering firm’s appeal application

The Supreme Court of Appeal (SCA) has dismissed an application by an engineering company to set aside a high court ruling on alleged irregularities in a multimillion-rand contract to electrify villages in Limpopo.

Mphaphuli Consulting, owned by Lufuno Mphaphuli, approached the SCA after the Limpopo high court upheld a report by the Special Investigating Unit (SIU) which uncovered overpricing in a contract to supply power villages in the Greater Tubatse municipality (now Fetakgomo Tubatse) in 2013.

The SIU found the municipality piggybacked on an existing contract between Mphaphuli Consulting and Vhembe district municipality but terms were changed to increase the price, resulting in overpayment of about R76m.

Mphaphuli wanted the court to review the SIU report, but the SCA dismissed the application with costs after an oral hearing on August 29. 

“The SIU welcomes the decision of the Supreme Court of Appeal, as it settles the question of whether the SIU was empowered to investigate the electrification of villages under Greater Tubatse municipality and also paves way for a civil claim against the engineering company to recover about R76m,” said SIU spokesperson Kaizer Kganyago.

The claim would soon start in the Limpopo High Court, he said on Thursday.

The SIU initially instituted a civil claim in 2017 to recover losses suffered by the Greater Tubatse municipality.

“Mphaphuli Consulting brought an application to review and set aside the SIU report and to seek an order compelling the SIU to stop steps taken against the engineering company which emanated from the SIU investigation,” Kganyago said.

Mphaphuli said the SCA case had “nothing to do with the R76m” which the SIU is seeking, and is an attempt to label him as corrupt.

“Why is there no preservation order sought against my assets [to recover that R76m]? They are hallucinating on recovering the R76m,” said Mphaphuli. 

He said he was briefing his legal counsel to “combine my claim of R500m against the SIU and their R76m claim against me”.

Mphaphuli Consulting has been embroiled in a legal dispute with the Greater Tubatse municipality after being appointed in 2013 to electrify several villages. The initial value of the contract was R168m but after an addendum in the contract and an addition to the villages to be electrified, the amount increased to R326m.

The municipality attempted to terminate the contract after accusing the company of not doing some of the contracted work.

Mphaphuli challenged the municipality’s decision and the Polokwane high court ordered the municipality to pay the company R41m.

In March 2017, the municipality’s bid to cancel Mphaphuli’s contracts failed in the SCA.

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