Private companies ran Limpopo state tenders

2012-03-10 16:31

Vital government functions in five Limpopo state departments were effectively outsourced to private companies.

They were given carte blanche to dish out tenders.This was revealed in Polokwane on Thursday where Monde Tom, leader of the Treasury’s intervention team, addressed members of the Limpopo Legislature’s finance ­committee.He told them that “some of the procurement in almost all the departments (under administration) was given to private people to run”.

“They participate in procurement, and the evaluation of bids. Others participate in the awarding of tenders.

The overuse of consultants and the project management phenomenon needs to be curtailed.”

Private companies were appointed to operate so-called project management units, some of which benefited from tenders they themselves awarded.In January, national government placed the Limpopo departments of education, health, public works, roads and transport, as well as its Treasury, under administration because of rampant financial mismanagement.

The province was operating with a R2 billion shortfall.

An insider close to the intervention team, who spoke on condition of anonymity, said national Treasury was still evaluating the various project management units’ sweeping powers and wanted to either restructure or do away with them ­entirely.“

We need to look at the contractual agreements in place and whether they are in line with what is expected of them.

Once we have done our assessment we will disband them or reconfigure them,” he said.

This follows a City Press report in August last year in which it was revealed that On-Point Engineers, in which ANC Youth League president Julius Malema owns a stake through his Ratanang Family Trust, was appointed to operate a project management unit for the roads and transport department.

On-Point also benefited from tenders it was supposed to manage.

In 2009 the roads and transport department awarded the company a R51-million tender to design, manage and implement roads projects.

At the time, City Press also revealed that the company had signed agreements with successful contractors, giving it a share of between 50% and 90% of the profits of tenders it dished out.

Forensic investigations were launched into the five departments under administration which all had their own privately operated project management units, but the main investigative focus is now into the departments of roads and transport and public works.

The insider declined to name the companies operating the various project management units, but said that as a precautionary measure, all units were stripped of their procurement powers. He said the project management units were appointed because there was a genuine need for them, but also because some people wanted to circumvent procurement policies.

The Public Finance Management Act strictly forbids the outsourcing of procurement to consultancies and private companies. “How do you hold them accountable? They are private people.

You can’t rule out manipulation,” said Tom. He complained that many of the project management units, which were appointed on the basis that they had the skills required to do the job, were in fact “clueless” and knew little about how to award tenders involving the construction industry.

“Skills to deal with bills of quantities are simply not there. Eighty percent of the people appointed to do the work are not qualified,” he said.

“This province has got a very serious, serious problem.”

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