Eskom tops list of procurement deviations with R31.3bn

Cape Town – Acting chief procurement officer Willie Mathebula told Parliament on Wednesday that he is concerned about the deviations of state departments and institutions from procurement regulations.

The Office of the Chief Procurement Officer briefed the standing committee on finance on its performance in the past financial year.

In its presentation to the committee, the office said it approved deviations from public procurement processes to the value of R37.6bn in the 2016/17 financial year.

Eskom tops the list of deviations with R31.3bn, followed by the South African Revenue Service with R1.2bn.

In terms of applications to deviate from or expand existing contracts, Eskom again ranks highest with an amount of R33.3bn.

Treasury regulations allow for the deviation from procurement regulations in terms of the Public Finance Management Act in certain circumstances.

Mathebula, however, said he is concerned about the requests for deviation and expansion of the scope of specific contracts.

“During my first month in office, I can’t say what justifies requests for deviations and what is not justifiable,” Mathebula conceded.

His office will therefore speed up the establishment of a framework whereby deviations will be approved or declined.

“These are contracts entered into by various government institutions. When they want to expand the scope of a contract they apply to National Treasury, but we don’t know how the contract was procured in the first place,” Mathebula said.

He said his office intends to “map” applications for deviations and strengthen the compliance monitoring role his office plays.

The Office of the Chief Procurement Officer also plans to establish a cross-functional internal committee from top management consisting of deputy directors general and the budget office, chaired by the office. "We need to make sure we deal with these issues," said Mathebula.

““There are huge issues where institutions are asked to deviate (from procurement regulations). I personally won’t be comfortable with even R1bn variation if it hasn’t been through a committee.”

During question time David Maynier, Democratic Alliance spokesperson on finance, asked Mathebula to elaborate on the deviations stated in the presentation. “What are the particulars and which contracts do these deviations pertain to?”

He also took Mathebula to task for not answering questions he had submitted earlier, such as why the previous acting chief procurement officer Schalk Human had been removed, more details on progress in respect of each review of state contracts exceeding R10m and a briefing on the Moloto Rail Development.

In his response, Mathebula did not elaborate on the contracts pertaining to the deviations applications. He did however say there is a “process” to look into all “these Gupta leaks and contracts”.

“There is an investigation going on as we speak now.”

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