Bribes, front companies, inside info: Agrizzi reveals how Bosasa got billions in tenders from correctional services

Angelo Agrizzi testifies at the commission of inquiry into state capture. Picture: Felix Dlangamandla/Netwerk24
Angelo Agrizzi testifies at the commission of inquiry into state capture. Picture: Felix Dlangamandla/Netwerk24

Officials in the department of correctional services flouted numerous tender processes and ensured that facilities management company Bosasa was awarded tenders to the tune of billion of rands in exchange for kickbacks.

This was the testimony given by former Bosasa chief operations officer, Angelo Agrizzi, when he continued his testimony before the state capture inquiry on Tuesday.

He revealed how correctional services officials – including former prisons boss Linda Mti, high-ranking correctional services official Nonkululeko Jolingana and former correctional services chief financial officer Patrick Gillingham – ensured that Bosasa received tenders and/or had already existing tenders extended.

According to Agrizzi the most lucrative contract that Bosasa pocketed was the correctional services’ fencing contract.

“This deal was the biggest fencing project in the country, or even in the southern hemisphere. It involved installing fencing to 66 prisons across South Africa. The entire project was valued at almost R500 million,” Agrizzi said.

However, he revealed that Bosasa had netted more than this amount as some of the invoices were inflated.

“On March 3 2006, Sondolo IT Solutions [another company that fell under Bosasa] received a lucrative R225 million television systems tender from correctional services,” said Agrizzi.

The windfall did not end there – Bosasa also had its catering tender renewed for 6 months in July 2007 as it was set to run its course in September.

“A lady by the name of Nontsikelelo Jolingana [a former acting correctional services commissioner] was the one who ensured that the extension happened,” explained Agrizzi.

Bosasa’s unfair advantage

Agrizzi, who has been dropping bombshells at the inquiry, also revealed that the only reason why Bosasa continued to win these contracts was because the company had “consultants” (individuals within correctional services) who gave them inside information on the looming tenders months before they would be advertised.

This, according to Agrizzi, gave Bosasa a head start over other companies bidding for the same tender.

He gave an example of the fencing tender, saying Bosasa knew about it months before it was advertised on October 14 2005.

Six weeks after it was advertised, on November 29 2005, the tender was awarded to Bosasa front company Phezulu Fencing.

“There was no way the other competitors would have gotten that deal given only six weeks to prepare their bid,” said Agrizzi.

Bosasa used front companies

According to Agrizzi, since there were lots of complaints about Bosasa being awarded the majority of tenders on offer from the department of correctional services, the company devised a plan to approach companies with the expertise needed and reached an agreement to purchase them only after they had received the tenders.

He gave the example of Phezulu Fencing: “Gavin Watson [Bosasa CEO] agreed a deal on principle with the majority shareholders of Phezulu Fencing that Bosasa would buy the company, assist it with bidding for the fencing tender and only assume ownership once the tender was secured,” said Agrizzi.

Compensation for their consultants

As compensation for the inside information and favourable dealings with the officials at correctional services, Agrizzi said they would be given monthly bribes that ranged from R40 000 to R100 000 a month.

Those found to be “consistent” in their services to the company, such as Mti, were remunerated even more favourably.

According to the former Bosasa COO, the company built a house meant for Mti in Savannah Hills Estate in the heart of Midrand and furnished another house he owned near the same estate.

Agrizzi said: “I met Mr Mti, I went to his house with Watson. I was later informed that Bosasa had supplied the furniture.”

Gillingham, on the other hand, also received a Mercedes E Class while his daughter received a Polo VW under Watson’s directive, Agrizzi testified.

Zondo’s axe to grind with the media

Before the resumption of proceedings on Tuesday, deputy Judge President Raymond Zondo made a heartfelt plea to the media not to divulge witness testimony prior to the testimony being given before the commission.

The plea came as a result of some media houses having published shocking revelations contained in Agrizzi’s affidavit which included the names of high-profile politicians and officials who allegedly received bribes from the company before he had shared this testimony with the commission.

Zondo appoints acting secretary

Having addressed “the concerning behaviour by the media”, Zondo went on to announce via a media statement the appointment of corporate governance expert, Peter Pedlar, as the acting secretary of the inquiry.

The appointment was necessitated after Agrizzi implicated secretary Dr Khotso de Wee in his testimony following which De Wee took special leave last week to allow the commission to investigate the allegations.

Pedlar will take up the position immediately until February 28 should the investigation into De Wee not be finalised before then.

According to his CV, Pedlar served in recent years as the chief financial officer of Artscape and the head of strategy for the Gautrain Management Agency.

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