State closing in on corrupt individuals and companies

2010-02-17 13:26

FINANCE Minister Pravin Gordhan said today that an

intergovernmental task team investigating ways to combat tender-related

corruption and fraud was closing in on corrupt individuals and companies.

About five people have already been arrested in KwaZulu-Natal while

a number of government officials are facing internal disciplinary action for

related offences.

National Treasury documents show that state contracts to the value

of R500 million have been suspended after corruption and fraud was uncovered.

“Through a combination of corrupt practices, inefficient

procurement, poor planning and, in some instances, collusion by the private

sector, we are not getting the kind of value from our purchases that our people


“Even where there is absolutely no corruption, we sometimes give

contracts to people who cannot implement them and so houses are left without

roofs, roads crumble when it rains, water schemes break down and school books

fail to get delivered,” said Gordhan in his budget speech.

Many cases involving fronting were also exposed.

“A large number of these relate to fronting, where a BEE entity or

an SMME is created and complies with the set procurement requirements but hides

the identities of the real beneficiaries,” Treasury documents show.

Other malpractices that have been found include the


  • Improperly awarded tenders;

  • Goods and services provided at grossly inflated prices;

  • Officials benefiting from government contracts;

  • Unnecessary purchases; and

  • Payments for services not rendered.

“There is one example of R60 million that was spent, but there were

no services that were rendered,” Gordhan said.

Government was also embarking on eliminating wasteful and fruitless

expenditure by state officials. This process has led to the government

identifying savings of about R25.4 billion over the next three years.

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