The company overcharged the Greater Tubatse Local Municipality (now known as Fetakgomo Tubatse Municipality) by at least R73m during an electrification project in 2013.
The municipality initially entered into a R168.8m contract with the company to connect at least 13,000 houses to the grid, in a project called Operation Mabone.
However, costs skyrocketed as the municipality twice amended the contract - bringing the total number of houses to be electrified to 19,000, at a cost of at least R326m.
According to SIU spokesperson, Kaizer Kganyago, Mphaphuli argued that a proclamation by then President Jacob Zuma empowering the unit to investigate the affairs of the municipality did not extend to investigating the company.
Kganyago said the legal action against the SIU was a bid to compel the unit “to stop all steps taken against the engineering company”.
“In dismissing the application, [the court] said the argument raised by Mphaphuli lacked substance. [This] as the scope of the proclamation allowed for a wide variety of matters to be investigated by the SlU, which took place between 11 March 2004 and 1 August 2014, the date of the publication of the proclamation, or which took place prior to 11 March 2004 or even after the date of the proclamation.
“The High Court judgment brings to finality to allegations of bias and impropriety by Mr Lufuno Mphaphuli levelled against the SIU in the investigation of Operation Mabone project,” he said on Friday.
The dismissal of the company’s application to have the investigation set aside now paves the way for the unit to continue its civil action to recover the R73m.
“The SIU has instituted a civil claim in the Polokwane High Court to recover financial losses suffered by the municipality, as a result of the R73m overcharge.
The institution of the R73m civil claim is a continuation of implementation of the SIU investigation outcomes and consequence management to recover financial losses suffered by State institutions and hold those responsible for losses to account for their actions, in accordance with the SIU Act 74 of 1996,” Kganyago said.
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