Phoenix housing programme: Three companies unlawfully benefited by R29.14 million
A Special Tribunal has declared the procurement arrangements unlawful and unconstitutional after three service providers allegedly benefited by about R29.14 million from an eThekwini low-cost housing programme.
Three companies - Woodglaze Trading (Pty) Ltd, Madupha Business Enterprise CC, and Ready Homes CC - benefited unlawfully from a low-cost housing programme in Phoenix, KwaZulu-Natal, by over R29 million. This was determined by the Special Tribunal after a special investigation conducted by the Special Investigating Unit (SIU). The SIU found that the companies unlawfully received around R29.14 million from the eThekwini Municipality’s Human Settlements Infill Housing Programme.
The programme aimed to provide affordable housing for first-time homebuyers in lower- and middle-income groups. The SIU's investigation revealed that the three companies were granted sites without proper competitive procurement procedures, as required by Section 217 of the Constitution and the Municipal Finance Management Act. The SIU also discovered that Madupha Business Enterprise and Ready Homes were brought into the programme without the necessary public advertisement, committee review, or bid adjudication.
The SIU traced 18 properties sold by the municipality to the three companies, which were then resold to third parties. Some properties were developed for reasons unrelated to the housing programme or were sold to individuals who did not qualify as beneficiaries. The SIU calculated that Woodglaze benefited by R25,321,099, Madupha by R2,256,894, and Ready Homes by R1,563,428, totaling R29,141,421.
The Tribunal ruled that the companies may complete buildings already under construction and sell completed homes, but they cannot start new developments under the invalid arrangements.
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