Johannesburg’s waste management company, Pikitup, is bleeding millions in a contract with a company booted out of a separate R28-million municipal tender less than two years ago.
In September 2009 Pikitup contracted Waste Rite to provide, maintain and operate trucks at landfill sites around Johannesburg.
That was exactly a year after Waste Rite was publicly exposed for overcharging an Eastern Cape municipality in September 2008 — and being appointed without a proper tender award.
Waste Rite’s contract with East London’s Buffalo City Municipality was cancelled following a forensic audit that highlighted serious irregularities in the tender process and the fact that the company had over-charged the municipality by hundreds of thousands of rands.
And now the City of Johannesburg appears to be Waste Rite’s second victim, with allegations that Waste Rite is fleecing Pikitup, allegedly with inside help from a Pikitup manager, Gerard Loggenberg.
The Mail & Guardian understands that Loggenberg was suspended three weeks ago on suspicion that he helped Waste Rite in exchange for a car and rent money for the house in Linbro Park that he shares with his mother and brother.
Loggenberg declined to comment on his suspension, but denied that Waste Rite owner Lillian Naicker bought him a car or pays his rent.
Pikitup said it was not aware of the East London scandal — which had extensive media coverage in 2008 — when awarding the contract to Waste Rite.
Pikitup’s communications manager, Pansy Jali-Oyedele, told the M&G: “The service provider was not blacklisted for any irregularities by the national treasury at the time of tendering.”
Pikitup refused to disclose the value of Waste Rite’s contract, although one former employee, Vulindlela Nxumalo, told the M&G he was informed by Loggenberg that Pikitup was paying Waste Rite R1,5-million a month for the equipment.
Former employees told the M&G that Waste Rite is picking the city’s pockets at the Linbro Park landfill site, where Loggenberg is a site manager.
Some methods allegedly used to defraud Pikitup are overcharging for machinery and labour time, as well as charging the city for broken machinery and claiming for overtime, tax and UIF contributions for workers, but keeping these amounts.
Nxumalo claimed that Naicker would charge double for the machinery and labour on weekends for overtime but not pay this over to her workers.
Everton Chigova, another former employee, said: “Waste Rite has never taken any of my details so as to be able to register me for income tax.”
Chigova, an asylum-seeker from Zimbabwe, told the M&G that he and six other workers were fired from Waste Rite in May after they were overheard planning to blow the whistle on the alleged corrupt relationship between Loggenberg and Naicker.
“We openly discussed the possibility of reporting this fraud to Neville Smith of Pikitup [but] I believe that Lillian [Naicker] became aware that we were talking about reporting the fraud to Pikitup,” he said.
Jali-Oyedele said the company launched an internal investigation last month to determine whether Loggenberg and Waste Rite were “directly or indirectly involved in fraudulent activity”.
Naicker did not respond to the M&G‘s questions.