Masutha interdicted from acting on controversial R378m IT tender

2016-06-07 13:15
Minister Michael Masutha.

Minister Michael Masutha. (Lisa Hnatowicz, Foto24)

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Johannesburg - Correctional Services Minister Michael Masutha has been interdicted from acting against a controversial R378 million tender given to an ANC benefactor.

National Treasury found that the correctional services department (DCS) irregularly appointed Integritron Integrated Solutions (IIS) to supply and maintain an electronic record of all the country's prisoners, called an inmate management system.

Finance Minister Pravin Gordhan subsequently wrote to Masutha telling him to cancel the tender and restrict it and its associate companies from doing business with government. 

However, Masutha's spokesperson Mthunzi Mhaga told News24 that Masutha could no longer act against the tender. 

Sasstec approached the High Court in Pretoria at the beginning of May for an urgent interdict restricting the DCS from taking any action against the tender pending the outcome of the legal proceedings. The matter was struck off the urgent roll and was put on the normal roll.

Mhaga said IIS was granted an interdict in the High Court in Pretoria on 24 May. 

IIS is part of the SA Security Solutions and Technologies (Sasstec) group of companies that has benefited from other government tenders. 

Review launched

Sasstec’s lawyer Claudio Bollo told News24 the interdict was granted pending the outcome of an application they were about to launch to review and set aside the letter of "instruction" from Gordhan to Masutha. 

"The court has therefore ruled, inter alia, that the letter of instruction may not be implemented by the DCS in any way and that the contract with Integritron may not be cancelled based on the letter of instruction, or based on the [Treasury] reports which gave rise to the letter, pending the outcome of our clients’ intended review application."

Bollo said the Sasstec group intended contracting with government "in an amicable, non-litigious manner and for the benefit of the general public".

Masutha previously said he wrote to Gordhan that it would be premature to act against the tender because it was subject to an ongoing audit by the Auditor General. 

"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," Masutha said. 

The Auditor General however apparently contradicted this. His spokesperson Africa Boso said the office was not doing any "special investigation" into the tender other than a normal audit for the department. This 2015/16 audit would look at the Treasury report on the tender. 

Mhaga later clarified Masutha's comments, saying: "Indeed the AG is correct in stating that there is no special investigation save for a normal statutory audit for the department."

Mhaga said the minister was referring to the normal audit in his letter to Gordhan. 

'Irregular' tender

In April, News24 revealed that the state’s chief procurement officer Kenneth Brown had instructed the DCS to cancel the "irregular" tender. 

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.

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.

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

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

Read more on:    michael masutha  |  johannesburg

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