Pravin eyes Ace’s tenders

2013-03-10 10:00

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The company that charged the Free State provincial government R47 million for its website design could lose its lucrative contracts as National Treasury sets its sights on the beleaguered province.

City Press has learnt that Finance Minister Pravin Gordhan’s department initiated probes into several contracts awarded by Premier Ace Magashule’s office.

Gordhan’s spokesperson, Jabulani Sikhakhane, said this week he could not comment on “ongoing investigations”.

City Press is in possession of a forensic report into two previous contracts awarded by Magashule’s office to Letlaka Media, the company in charge of the expensive website redesign.

The report recommends that the contracts are cancelled and further investigations are undertaken that could lead to criminal charges being initiated.

Letlaka Media, owned by Bloemfontein businessman Tumi Ntsele, made headlines this week because of the website contract.

The report slams the process that was followed to appoint Magashule’s office as the “implementing agent” in charge of media and marketing.

The 51-page forensic report, compiled by JGL Forensic Services for National Treasury, states that the appointment of Magashule’s office to procure goods and services on behalf of the provincial government could constitute “financial misconduct”.

JGL investigated contracts for printing and distribution, and one for event management that were awarded to Letlaka. The final report was submitted to National Treasury in December last year.

The report outlines how provincial departments were bullied into signing a letter drafted by Free State director-general, Elzabe Rockman.

The provincial executive committee was warned by an official in Magashule’s office and the Free State treasury that centralising media buying in Magashule’s office contravened the Public Finance Management Act.

The warnings were ignored and tenders invited. “Implicit in its conduct was the (Free State) executive council’s determination to avoid a competitive bidding process,” the report states.

In April 2010, four tenders – for public information, media bulk buying services, printing and distribution services, and events management – were advertised by Magashule’s office.

The last two were awarded to Letlaka Media, but the company also benefited from the bulk buying contract through advertising in its newspaper, The Weekly.

The Weekly, a pro-government newspaper owned by Ntsele, received extensive advertising from Magashule’s office. According to the report, it was funded almost exclusively by the provincial government.

The JGL report states: “The Weekly can therefore be classified as a fully government subsidised newspaper, printed by a private sector entity on their behalf. Without government advertising, The Weekly would not be published or in any way viable and compete in the open market.”

Behind the scheme was Wisani Ngobeni, the former journalist-turned-chief-director for communication in Magashule’s office.

According to the report, Ngobeni presented a proposal to Rockman in March 2010 for the invitation of “transversal bids” for the “bulk buying of media space for print, electronic and outdoor media”.

This effectively meant the centralisation of all media buying and printing through Magashule’s office.

But this had to be approved by the provincial treasury, which wasn’t done, the investigation found.

JGL identified the need for National Treasury to conduct further investigations into the tender processes followed.

Mondli Mvambi, a spokesperson in Magashule’s office, said they were aware of an investigation by National Treasury into “certain contracts awarded three years ago to various service providers with expertise in the areas of event management, printing and media bulk buying”.

He said a final report has not yet been received.

Ntsele told City Press through his lawyer he would not comment.

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