Siyangena got extended R2.2bn Prasa contract without board approval, inquiry told

The Zondo commission on Tuesday heard that Prasa's Finance, Capital Investment and Procurement committee played a role in the approval of a R1.9 billion contract with Siyangena Technologies from an initial budget of R517 million in 2011, with the contract later being extended further to R2.2 billion without the approval of the board.

Prasa's head of legal, Martha Ngoye, told the commission that after various discussions among committee members in Prasa, the R1.9-billion contract for gates and security processes was approved with security company Siyangena Technologies, which is linked to businessman Roy Moodley, an associate of former president Jacob Zuma.

According to Ngoye, the FCIP signed off on a budget of R517 million for the entire project, but later approved Siyangena’s amount, which was way over budget.  

'It shouldn't have happened'

"If you know that there is no budget for this, you should not then entertain an amount that is greater than that which you have budgeted for.

"I don’t know if I can explain [the anomaly]. It shouldn’t have happened. Applying your mind, you would have picked up that there is something amiss as far as this is concerned," said Ngoye.

The commission also heard that the contract was marred with irregularities, "as there was no open tender process, and there was not even a request to deviate from the open tender process. There was no RFP [request for proposal] and there were no evaluation criteria, because that would be stated in the tender documentation," Ngoye told Deputy Chief Justice Raymond Zondo.

According to Ngoye’s testimony, at the time of negotiations, there was another company – Protea Coin – competing for the contract. Protea Coin quoted considerably less, but was overlooked as it did not present a funding model, which saw Siyangena winning the contract.

"Protea Coin submitted a response. Their amount was R1.3 billion. The award should have gone to Protea Coin because they were the cheaper ones and it didn’t. It went to Siyangena," said Ngoye.

According to Ngoye, Siyangena presented a funding model which would assist Prasa with a R1.9 billion loan for the project. However, said Ngoye, it was a loan the state-owned entity could not afford.

Siyangena’s contract was later extended by an additional value of R350 million, making the total value of the contract increase to R2.2 billion.

The approval of the contract continued without any board approval under the watch of former group CEO Lucky Montana and the former Chief Procurement Officer Chris Mbatha, the commission heard.

The inquiry continues.

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