Masutha: Gordhan did not order me to do anything

2016-05-21 22:20
Justice Minister Mike Masutha. Picture: Netwerk24

Justice Minister Mike Masutha. Picture: Netwerk24

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Johannesburg - Justice and Correctional Services Minister Michael Masutha has denied that Finance Minister Pravin Gordhan “ordered” him to cancel a controversial multi-million rand prisons tender awarded to an ANC benefactor.

This followed a report by News24 titled “Gordhan orders Masutha to cancel R378m IT tender.” 

Gordhan wrote to Masutha, telling him to cancel a tender with Integritron Integrated Solutions (IIS) and restrict it and its associate companies from doing business with government.
Masutha’s spokesperson Mthunzi Mhaga said in a statement on Saturday: "It is quite disheartening and somehow condescending that such an insinuation could be made, where one Cabinet minister could be instructed or ordered by his colleague to cancel a contract under his administration."
While Masutha said concerns were raised in the letter, he was not ordered to cancel the contract. It merely contained advice, Mhaga said.

Gordhan’s letter, dated April 11, states that the National Treasury concluded its review of the bid process to see if the department of correctional services (DCS) complied with supply chain management laws during the bidding process. 

"The review revealed that Integritron Integrated Solutions was irregularly appointed," Gordhan said. 

Gordhan’s grounds included a "false declaration" by the bidder, a lack of capacity and ability to execute the contract, and a "fronting relationship" between the main contractor and sub-contractor.

"In view of the above, the accounting officer and members of the bid committee failed to comply with certain provisions of the Public Finance Management Act, Treasury Regulations, instruction notes and preferential procurement regulations, 2011," he wrote.

Gordhan further told Masutha to bring a disciplinary case against bid committee members and the accounting officer. 

Last month, News24 revealed that the state’s chief procurement officer, Kenneth Brown, had instructed the DCS to cancel the "irregular" R378 million tender awarded to IIS. IIS is part of the SA Security Solutions and Technologies (Sasstec) group of companies that has benefited from government tenders. 
The Sasstec group approached the High Court in Pretoria at the beginning of May in a bid to interdict Gordhan, Masutha, and Solly Tshitangano from implementing recommendations in National Treasury's report on the tender. Tshitangano is chief director for governance monitoring and compliance in Brown’s office.

It also wanted to interdict them from implementing Gordhan’s instructions and defaming it by mentioning its name and the alleged irregularities publicly or in the media. 
Claudio Bollo, the lawyer for Sasstec, told News24 the matter was struck off the urgent roll, but was still pending on the normal roll. 

Mhaga said on Saturday that Masutha responded to Gordhan’s letter in April. He told Gordhan that the Auditor General was auditing the procurement process and that it would be premature to take any action. 

“What is also important to highlight is that the successful bidder has since approached the court, and therefore the matter is now subject to a judicial determination by the court of law,” he said. 

Documents obtained by News24 show how DCS national commissioner Zach Modise defied requests by Brown’s office to review the awarding of a contract for an inmate management system to IIS.

Another Sasstec company, SA Fence and Gate, has been awarded government tenders worth billions by Eskom, DCS, and the Passenger Rail Agency of SA.

SA Fence and Gate is an ANC donor and member of the party's Progressive Business Forum.

Sasstec is partly owned by politically-connected businessman Moya Nape and ex-home affairs chief IT director, Patrick Monyeki. The group’s biggest shareholders are CEO Geoff Greyling and his family.

Despite numerous deficiencies with its tender to the DCS, IIS's bid was the only one considered by the department when it awarded the lucrative contract. The successful bidder would have to supply and maintain an electronic record of all the country's prisoners, called an inmate management system.

Read more on:    michael masutha  |  pravin ­gordhan  |  government  |  treasury

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