AG denies 'special investigation' into R378m tender for prisons' dept

2016-06-01 21:05
Dept of Corrections Minister Michael Masutha. (File, Netwerk24)

Dept of Corrections Minister Michael Masutha. (File, Netwerk24)

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Johannesburg - The Auditor General has contradicted claims by Correctional Services Minister Michael Masutha that the office is investigating a controversial R378m prisons tender awarded to an ANC benefactor.

“The Auditor-General of South Africa (AGSA) is not doing any special investigation other than a normal statutory audit [for the department]," spokesperson Africa Boso told News24.

This echoed what he told News24 in April: "As the National Treasury has already investigated and made recommendations to the department [on the tender]... the Auditor General of South Africa will not be investigating the matter any further."

However, Masutha said in a statement on May 21, quoting from a letter he wrote in April, that the AG was busy auditing the process.

Masutha said he told Finance Minister Pravin Gordhan that "the Auditor General is in the process of auditing the procurement process of the above-mentioned contract at the request of the accounting officer on 8 February 2016". It would thus be premature to take any action.

Boso said the AG would, as part of the "2015-16 normal annual audit process, consider the National Treasury’s findings and their impact".

Treasury review
Masutha's spokesperson Mthunzi Mhaga could not be reached on Tuesday to clarify the minister's comments on the AG.

Gordhan previously wrote to Masutha, advising him to cancel the tender with Integritron Integrated Solutions (IIS) and restrict it and its associate companies from doing business with government.

Gordhan’s letter, dated April 11, states that the National Treasury concluded its review of the bid process to see if the department of correctional services (DCS) complied with supply chain management laws during the bidding process.

"The review revealed that Integritron Integrated Solutions was irregularly appointed," Gordhan said.

Gordhan’s grounds included a "false declaration" by the bidder, a lack of capacity and ability to execute the contract, and a "fronting relationship" between the main contractor and sub-contractor.

"In view of the above, the accounting officer and members of the bid committee failed to comply with certain provisions of the Public Finance Management Act, Treasury Regulations, instruction notes and preferential procurement regulations, 2011," he wrote.

IIS part of Sasstec group

Gordhan told Masutha to bring a disciplinary case against bid committee members and the accounting officer.

Last month, News24 revealed that the state’s chief procurement officer, Kenneth Brown, had instructed the DCS to cancel the "irregular" R378m tender awarded to IIS. IIS is part of the SA Security Solutions and Technologies (Sasstec) group of companies that has benefited from government tenders.

Sasstec approached the High Court in Pretoria at the beginning of May in a bid to interdict Gordhan, Masutha, Brown and his colleague Solly Tshitangano from implementing recommendations in National Treasury's report on the tender. Tshitangano is chief director for governance monitoring and compliance in Brown’s office.

It also wanted to interdict them from implementing Gordhan’s instructions and defaming it by mentioning its name and the alleged irregularities publicly or in the media.

ANC donor, political connections

Sasstec´s lawyer Claudio Bollo, said the matter was struck off the urgent roll, but was still pending on the normal roll.

Documents obtained by News24 show how DCS national commissioner Zach Modise defied requests by Brown’s office to review the awarding of a contract for an inmate management system to IIS.

Another Sasstec company, SA Fence and Gate, has been awarded government tenders worth billions by Eskom, DCS, and the Passenger Rail Agency of SA.

SA Fence and Gate is an ANC donor and member of the party's Progressive Business Forum (PBF).

Sasstec is partly owned by politically-connected businessman Moya Nape and ex-home affairs chief IT director, Patrick Monyeki. The group’s biggest shareholders are CEO Geoff Greyling and his family.

Despite numerous deficiencies with its tender to the DCS, IIS's bid was the only one considered when the department awarded the lucrative contract. The successful bidder would have to supply and maintain an electronic record of all the country's prisoners, called an inmate management system.

Greyling told News24 previously that IIS would not be able to comment due to "confidentiality limitations" in the contract with the DCS.

He denied using the ANC’s PBF to help it win tenders.

Read more on:    michael masutha  |  prisons  |  tenders

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