Special Tribunal sets aside eThekwini's Phoenix affordable housing contracts

The Special Tribunal has set aside what it termed irregular arrangements between the eThekwini Municipality and three companies involved in the Phoenix infill municipal housing project in Durban.

In a judgment delivered on 5 August, Judge Margaret Victor directed that Woodglaze, which trades as Lady Brick Block Property Development, as well as Madupha Business Enterprise and Ready Homes, may not start building any new houses but may finish those under construction.

The infill project, which began in 2000, was intended to build affordable housing on vacant municipal land in Phoenix. Under the tender, service providers were to develop 130 sites within two years and sell them to beneficiaries approved by the municipality's housing department. More than two decades later, it remains unclear how many affordable housing units have been delivered.

Victor declined to order the companies to repay their profits, as requested by the Special Investigating Unit, saying a debatement and disgorgement order would be inappropriate given the lack of evidence on the project's financial details, while leaving the door open for further evidence on the issue.

The judge said the municipality created and perpetuated the irregular arrangements, failed to maintain adequate records, failed to revoke or regularise unlawful arrangements when concerns were identified, and then elected not to participate substantively in proceedings concerning its own procurement failures.

Residents have long complained about the quality of housing built under the project, which has also drawn concerns over ownership structuring, the loss of open and recreational spaces, and infrastructure strain.