'Thieves were waiting at the door': Mboweni ends emergency PPE procurement

Finance minister Tito Mboweni at the press conference before he delivered his 2019 budget speech  (Gallo Images, Brenton Geach)
Finance minister Tito Mboweni at the press conference before he delivered his 2019 budget speech (Gallo Images, Brenton Geach)
  • Finance Minister Tito Mboweni has said it is clear the procurement process must be tightened.
  • National Treasury has ended the emergency procurement of personal protective equipment, meaning that suppliers will have to go back to a more stringent process.
  • Treasury Director-General Dondo Mogajane said anti-corruption measures must be put in place, plus outside-the-box thinking to ensure that procurement is "fraud-proof". 

National Treasury has ended the emergency procurement process for Personal Protective Equipment and protective clothing, saying it's back to business as usual for government suppliers.

Going forward, full details of companies who have been awarded tenders will also be published to increase transparency.

This comes as government grapples with allegations of fraud in what was meant to be a quick process to ensure that South Africa had a steady supply of PPE and protective clothing during the pandemic.

No sooner had Treasury announced the Covid-19 budget, than thieves were already assembled at the door, waiting to steal, said Finance Minister Tito Mboweni.

The minister made the remarks at a briefing along with Treasury Director-General Dondo Mogajane on Wednesday. They informed the standing and select committees on finance regarding the procurement of personal and protective equipment (PPE) for Covid-19.

This followed reports of corruption in Covid-19-related tenders.

Mogajane said the emergency procurement of PPEs and protective clothing had ended because demand and supply are no longer an issue.

"We have boosted local production of face shields, of masks. All of that is now in place after a few months of challenges that we had in terms of how companies in South Africa can begin to take advantage of the opportunity that is here," said Mogajane.

He said anti-corruption measures needed to be put in place, as well as outside-the-box thinking to ensure that procurement is "fraud-proof".

Mogajane added that the responsibility to procure still lies with accounting officers, and if there are any issues in the process then the accounting officer involved must be held accountable.

There have been calls for procurement to be centralised, allowing for prices to be set nationally, and Mogajane said the Treasury is finalising the details of how that could work.

Labour federation Cosatu has said that the procurement system is flawed, creating room for some suppliers to "defraud" the state during the pandemic. Cosatu wants procurement to be centralised, with Treasury having oversight, making it easy to monitor and track mistakes.

Select committee chair, Yunus Carrim, asked Mogajane whether any action has been taken regarding accounting officers implicated in PPE tender fraud.

The Special Investigating Unit has been investigating allegations of corruption relating to PPE procurement contracts. But Mogajane said was not currently aware of any officials having been brought to book.

Mogajane said that Treasury was tracking Covid-19 expenditure by departments at national and provincial levels.

In the year-to-date, R3.6 billion has been spent on the Covid-19 response by national departments. At provincial level, health and education departments as well as other Covid-19 response measures amounted to R6.8 billion.

But at the briefing, Mboweni said that Treasury's instruction notes issued for procurement were "clear from the beginning".

The problem is that not all parties are following these tender or procurement process instructions, he said. "The reality is, people found the opportunity to do something wrong," said Mboweni.

"There is a prima facie case to be made - not in all instances was Treasury's instruction followed," he said. This meant that accounting officers and executive authorities had to follow up on what has gone wrong on an administrative level.

Actions of a criminal nature need to be followed up by law enforcement agencies, he said. "Now it is up to law enforcement agencies to follow up with companies awarded tenders," he said. Law enforcement will have to make sure "culprits are brought to book," he added

Publishing tenders

Mboweni said going forward the details of companies who have been awarded tenders must be published. Information on who the competing bidders were and on what basis they lost must also be made clear, he said.

This should also reveal the age of companies, and whether they were established the night before, so to speak, and if any of the awardees are politically exposed persons.

Mogajane echoed views that Treasury is not opposed to have details of contracts published, "in the spirit of transparency".

So far Treasury has received no reports on consequence management being followed.

Treasury has committed to report back to Parliament in 10 days about what steps have been taken to date to ensure accountability.

Speaking on consequence management, Mboweni said it is clear that the procurement process needs to be tightened.

He added that the procurement system should operate in tandem with the political system. "At each sphere of government we have an executive authority and accounting officers.

If we followed through on the political and administrative system properly, we should be in a position to control this procurement system very well," he said. 

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