Johannesburg, City Power’s Controversial Eldorado Park Substation Project Takes A New Twist

Janice Greaver, 24/03/2021

The City of Johannesburg recently issued a press statement announcing a resumption of construction works on the Eldorado Park Substation crediting it to the facilitation by Councillor Mpho Moerane, an Environment and Infrastructure Services Department Mayoral Committee member.

The upgrading of Eldorado Park Substation has been mired in controversy since 2016 when the former Johannesburg Mayor, Mr. Herman Mashaba, instigated a witch-hunt which resulted in the arbitrary and unilateral cancellation of the project.

According to the Public Protector, Mayor Mashaba was said to be meddling in this R126 million contract which was concluded between City Power and Setheo Engineering in 2015.

Of serious concern in the matter is the issue of rights on the project equipment in this project since the former contractor believes that the use thereof without their consent is a contractual violation.

Setheo’s Chief Executive Officer said “The assets above were purchased by Setheo and are the property of our company.

They are the very same assets whose existence and relationship to City Power formed the Mashaba campaign which said that Setheo had diverted City Power funds in cahoots with City Power employees who are also co-accused with me and others.

The 2017 charges were withdrawn for lack of evidence only to be reinstated in November 2020. What is bizarre is that we are been harassed in court to allow for Setheo’s assets to completely disappear into another seemingly new project.

It is intentionally and deliberately stated in the statement that City Power is starting from ground zero to erroneously create the impression that the Setheo acquired assets have been lawfully acquired from third parties by City Power.”

While also commenting on this controversial project, Mr. Mulaudzi of AG Mulaudzi Attorneys, a member of the C2C Initiative whose members have been closely following this self-created saga expressed concern on the way the matter has been handled.

“It is true and fact that criminal charges were preferred against Setheo by City of Johannesburg on allegations that an amount of R66 million had been paid to Setheo for no exchange of value in goods and services.

It is baffling to understand how the purportedly non-existent equipment now forms part of the assets in play in the resumed project.

I am not sure on what legal authority would Councilor Moerane proceed to deal with equipment whose existence forms the subject matter of a criminal dispute between the state and the individuals who have been targeted.

It is extremely disingenuous that City Power in relation to the criminal charges alleges that Setheo diverted R66 million paid by City Power pursuant to a contract between the two parties yet expose the hypocrisy by appropriating the assets in dispute without the benefit of an order of court.

This begs the question whether Councillor Moerane just like the former Mayor Mashaba also believes that this is above the law and can effectively assume the right, title and interest to equipment acquired by Setheo?” Mulaudzi queried.

However, in issuing the statement, Mr. Stanley Itshegetseng, Deputy Director, Communication and Stakeholder Relations in the Office of the MMC referred most of the questions to the CFO and CEO of City Power

This came after some questions on the implications of Councillor Moerane engaging in what appears to be a self-help scheme of facilitating a deal which seems to offend the rule of law.

When being asked about the contention on the equipment, Mr Itshegetseng said “I do not know what Setheo has bought. I took these pictures today on sight. It is part of the new installations that they are doing. It is Setheo that can confirm in the positive or negative if that is part of the equipment they bought.”

Another member of C2C, an NPO which promotes corporate and civic literacy, Mr. JJ Singh, expressed concern on the way how such significant projects are handled at the expense of real and lawful beneficiaries.

“I cannot fathom what is going on here. I was part of a delegation that met with Councillor Moerane to bring to his attention that the criminalization and weaponization of contracts perpetrated by the former Mayor who seems to be obsessed by this specific case does not augur well for the country.

The use of the outfit called GFIS in underworld-like schemes that has resulted in Setheo losing its relationship with its property is tantamount to defeating the ends of justice.

I would have expected Councillor Moerane to know better that self-help schemes pose so grave a risk to the rule of law leaving no one safe as a contracting party of City Power.”