The Special Tribunal has reviewed and set aside two Independent Development Trust (IDT) contracts, worth some R1.6 billion, and has ordered the five companies, who received the contracts, to pay back all profits gained from the contracts.

According to the Special Investigating Unit (SIU), the five companies were awarded the contracts by the IDT to implement projects at the Department of Correctional Services.

‘The decision of the Special Tribunal… follows an investigation by the Special Investigating Unit (SIU) into the affairs of the Department of Correctional Services.

‘This investigation revealed that the IDT failed to follow the applicable statutory and regulatory procurement provisions governing public procurement as set out in the Constitution of the Republic of South Africa, in concluding the contracts with the companies,’ the SIU said.

According to the SIU, the department had appointed the IDT as an implementing agent to ‘manage the implementation of security fencing, parameter fencing, intercoms
and conditions audits, and other infrastructure projects at various correctional centres in South Africa’.

‘Following its appointment as an implementing agent, the IDT contracted Secelec Consulting Engineers (Pty) Ltd, Bakone Consulting Engineers (Pty) Ltd, and Bakone Secelec Consulting JV 2011 as transactional advisors to implement the building of fences around various prisons at a cost of R492 960 564.66. The contract was later cancelled.

‘In 2012, the IDT appointed Manyeleti Consulting SA (Pty) Ltd and SA Fence and Gate JV as transactional advisors for a similar job. The budget for the initial tender increased with R72 454 350.62 or 15.2%.

‘However, the total budget increased to R861 255 544.40. This escalation represents 81% of the approved budget and way above the permitted 20% deviation as per the National Treasury regulations. The Tribunal found that the tender/contract award was predetermined,’ the SIU explained.

The corruption busting unit welcomed the Special Tribunal’s ruling on the matter and
added that any criminality will be reported to the National Prosecuting Authority (NPA).

‘The Special Tribunal had ordered the five companies to render the full accounts of all the payments they received under the contracts awarded by IDT and reasonable expenses incurred, supported by necessary vouchers.

‘Following the calculations of expenditure to service the now illegal contracts, the companies shall pay whatever profits that were earned. Furthermore, the companies were ordered to cover the legal costs of the review application brought by the SIU.

‘The SIU welcomes the decision of the Special Tribunal, as it forms part of the implementation of investigation outcomes and consequence management to recover financial losses suffered by the State…[and] will refer any evidence pointing to criminal conduct it uncovers to the [NPA] for further action,’ the SIU said.

Source: South African Government News Agency