The city of Johannesburg has launched a forensic investigation into the circumstances around the Altivex 75 (pty) ltd Cell Mast contract with the Johannesburg Property Company (JPC) and is in the process of taking criminal and disciplinary action against one current and one former city employee.
In 2013, JPC entered into a contract with Altivex 75. The contract required Altivex 75 to conduct an analysis of the cell mast industry and produce a master plan for regulating cell mast applications involving City-owned street poles. Further to this, Altivex 75 was required to process applications from cell mast companies on behalf of the City.
This agreement did not in any way allow Altivex 75 to install aerial fibre or cede rights contained in the original contract and the proposed master plan has not seen the light of day.
As a result, JPC notified Altivex 75 of their breach of contract in April 2017.
Altivex 75 subsequently ceded their contract to Fibrehoods (pty) ltd who in turn ceded their contract to Vumatel (pty) ltd.
Altivex 75, Fibrehoods and Vumatel were all subsidiaries of the Waterfall Group. Vumatel has claimed that Waterfall’s holding in all three companies has been bought out, however, the City is yet to see proof of this.
Two City employees, one from JPC and one from City Power, issued fraudulent letters stating that Fibrehoods / Vumatel have a valid agreement with the City that allows them to roll out aerial fibre city wide.
These letters were used to convince Johannesburg Roads Agency (JRA) to issue way leaves on demand.
In August of 2017, City Power notified Fibrehoods / Vumatel in writing that their contract was not valid and was in violation of the Municipal Finance Management Act (MFMA) and the City’s supply chain management policy. City Power also requested a full mapping of all aerial fibre laid to date, as well as a plan from Fibrehoods to rectify the situation.
After extensive engagement with City Power and JPC, Fibrehoods / Vumatel have not produced a mapping of their aerial fibre.
As it stands, Fibrehoods is engaged in litigation with the JRA. Despite the obvious connection between Altivex 75, Fibrehoods and Vumatel; both Fibrehoods and Vumatel plead ignorance of the illegality of their Altivex 75 contract.
The City of Joburg is receiving no payment for aerial fibre from either of the companies in question which constitutes unjustified enrichment on the part of Altivex 75.
This tangled web of intrigue has resulted in the City launching a full forensic investigation into the matter. The City official who is currently employed by the City will face immediate disciplinary action. In addition, criminal charges will be laid against both the current and former official.
This is a very serious matter, as it carries substantial consequences that if left unchecked could result in a monopoly on aerial fibre being created using City infrastructure.
The Executive Mayor, Councillor Herman Mashaba is adamant that corruption in the City must be met head on and those found wanting must face the full might of the law. This includes the private sector.
In light of this, the City intends taking further action based on the outcome and recommendations of the forensic investigation.
Cllr Leah Knott
MMC of Economic Development
082 633 9070
Strategic Advisory: MMC for Economic Development
083 419 7794