EduSolutions sues state for R150m

2013-06-30 14:01

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Government cancelled contract during textbook scandal, but firm won’t back down

EduSolutions is suing government for nearly R150?million – payment for the contract it allegedly bungled so badly that pupils in Limpopo went without textbooks for a year.

The company’s R500?million supply contract in Limpopo was cancelled amid last year’s debacle, which became a national scandal.

Now the company is claiming R147.5?million, plus interest, in unpaid fees and loss of earnings from Limpopo’s education MEC, the administrator appointed by national government to fix the province and Basic Education Minister Angie Motshekga’s image.

EduSolutions once employed apartheid-era assassin Dirk Coetzee as a security chief and counts a number of senior former civil servants among its directors.

Its contract was cancelled in April last year after national government intervened in the bankrupt province.

A legal opinion obtained by the department of basic education, on the strength of which the contract was cancelled, said the terms of the contracts did not comply with public finance legislation and could be unconstitutional.

Then acting chief financial officer in the department Solly Tshitangano blew the whistle on the deal last year in a complaint to the Public Protector.

He said the tender was awarded without due process and claimed EduSolutions only paid over R9.7?million of the 32.6?million in discounts owed to the province.

In its summons filed with the North Gauteng High Court, the company demands R121.4?million for potential loss of earnings during the 2012 and 2013 school years – R60.7?million per year.

It claims another R26?million for unpaid services dating back to 2011. It claims R12.1?million is still outstanding for textbooks and other learning materials bought and distributed in 2011, along with R10.7?million in management fees.

It also claims a further R3.2?million for materials bought between November and December 2011. In its court papers, EduSolutions claims its contract was terminated unlawfully, even though last year it lost a previous application in the same court to have the contract reinstated.

Tshitangano initially said the contract was worth R320?million, but in June last year, Wits University Professor Mary Metcalfe found that textbook orders in excess of R500?million had been placed through the company.

Government has said it will oppose the action nationally and in Limpopo. In May, EduSolutions was re-awarded the contract to supply textbooks in Gauteng after several unusual postponements in the adjudication process.

The tender award was announced publicly by the Gauteng department before any of the losing bidders were notified.

The company currently also has supply contracts in Mpumalanga, Gauteng and KwaZulu-Natal, all of which contain provisions similar to those found unlawful by senior Advocate Pat Ellis in his legal opinion in favour of the cancellation of the Limpopo contract.

City Press has several times put this legal opinion to the National Treasury, asking if this would lead to a review of other existing contracts, but Treasury has repeatedly avoided responding.

Law enforcement sources have also indicated that a sweeping probe into the company launched last year was continuing – and is nearly done.

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