The City of Cape Town says it is taking disciplinary action against two officials implicated in fraud.

This came after eight people were arrested in connection with corruption in the construction sector within the City of Cape Town.

Western Cape police said they arrested the eight people on Thursday, as part of an investigation into tender fraud within the municipality. They were accused of inflating invoices, irregularly paying service providers for construction work not undertaken, and other illicit activities, said police spokesperson, Brigadier Novela Potelwa.

The City said the arrests were in connection with alleged fraudulent over-billing by a subcontractor for repairs and maintenance.

Disciplinary charges have been laid against two officials who face charges, according to the City. One of the officials has since resigned.

"Besides the forensic investigation, the City's internal audit also independently identified various control gaps in the management of the underlying contract, initially awarded in 2017-'18," the City said.

"The City has since created its own Engineering Services Unit, staffed with professionals who monitor all construction and maintenance work…. To address the historical gaps, multi-level controls have since been built with strong oversight by management."

The City added that maintenance and upgrades to the tune of around R2-billion had been carried out at more than 40 000 affordable rental units. Around 160 000 people live in affordable rental units operated by the City.