Possible over-pricing by Nkandla consultants - Nxesi

2013-12-19 15:46
Zuma's Nkandla homestead. (Picture: City Press)

Zuma's Nkandla homestead. (Picture: City Press)

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Pretoria - There were many irregularities in the appointment of contractors and procurement of goods for the upgrading of President Jacob Zuma's Nkandla homestead, a government report has found.

"For instance, large variation orders and the high percentages spent on consultancy fees point to the possibility of over-pricing and collusion," Public Works Minister Thulas Nxesi told journalists in Pretoria on Thursday.

Speaking at the release of the report he said the supply chain irregularities related to the appointment of service providers and procurement of goods and services.

The report was compiled by the inter-ministerial team tasked with probing the over R206m upgrade at Zuma's private homestead in Nkandla, KwaZulu-Natal.

Nxesi said Zuma had known nothing about the costs involved.

"The president cannot know about the costs... there was no way that he could [have been] told about the cost of this project," he said.

The report confirms that a total of R206 420 644.28 was spent on the upgrade, up to December last year.

A breakdown of the so-called "actual security costs" reveals that over R3m was spent on bullet-proof glass in the residence, and well over R9m on the fence that encloses the complex.

The Otis lift, fitted in the house, cost almost R2m. Electronic detection systems cost just over R10m, while R21.7m was spent on high security facilities including earthworks, roads, and garages.

The total spent on physical security features was R50.5m, plus a further R20.7m for professionals' fees.

Breakdown of the amount

The report lists the balance of the total R206m spent at Nkandla, an amount of R135.2m, as departmental operational needs costs.

This figure includes a further R27.9m in professionals' fees.

On supply chain management of the project, the report finds that a fair, equitable, transparent and cost-effective competitive bidding process was not achieved.

"It was also found that the then minister of public works [Geoff] Doidge and deputy minister [Hendrietta] Bogopane-Zulu attended and presided over site meetings and in some instances interacted with contractors involved in the project.

"This was reflected in the minutes, memos generated by officials of [the department], and from evidence of three officials and one contractor who raised uneasiness with the involvement of the executive in the project."

On variation orders, the report notes that these may not exceed 20% of the contract amount, as per National Treasury instructions.

"However, in this project, there were four variation orders, three of which exceeded the 20 percent limit."

The variation orders totalled R26.7m. Among the task team's recommendations is that the report be referred to law enforcement agencies for possible further action. Nxesi said such action was already underway.

"I [have] engaged with the Special Investigating Unit [SIU] and the auditor general for further forensic and criminal investigation."

He said Zuma had signed a proclamation empowering the SIU to institute further investigations.

"I have already written to the Police Minister [Nathi Mthethwa] requesting the SA Police Service... investigate any possible criminal acts."

Jeopardising the case

Nxesi said he could not give more details on who was being investigated, because it might jeopardise the cases.

In the report a call is made for immediate disciplinary measures against any government officials who might be implicated in any wrongdoing, including flouting policies and procurement procedures.

It also calls for the role of Doidge and Bogopane-Zulu to be further investigated and clarified.

A senior public works official said at the briefing on Thursday the department's director general, deputy director general, chief financial officer, and regional manager at the time the project was started had all subsequently left the department.

They were either dismissed or resigned.

Nxesi said allegations that Zuma had used state resources to build or upgrade his personal dwellings were unfounded.

Government had an obligation and responsibility to provide security for heads of state and their families.

"Such security is provided at state expense," he said.

It was also revealed at the briefing that there had been three "attacks" on Zuma's homestead - two involving arson and one a burglary.

According to a senior police official, one of these had taken place when Zuma was deputy president, a position he occupied from 1999 to 2005, before being removed by then president Thabo Mbeki.

Read more on:    thulas nxesi  |  jacob zuma  |  johannesburg  |  nkandla upgrade

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