The Department of Public Works and Infrastructure is pushing ahead with the blacklisting of the two companies that were implicated in the controversial Beitbridge border post fence. The department has given the companies 14 days to respond to the question why they should not be restricted from doing business with the state.
This was revealed by Minister Patricia de Lille when she was responding to parliamentary questions from DA MP Benedicta van Minnen. Van Minnen asked about progress made on the recommendations made by standing committee on public accounts (Scopa) to blacklist the principal contractor and the main contractor from doing business with the state.
She also asked why there were still a number of contracts in place with the two companies. In March, De Lille issued a directive to the department to appoint a service provider to use an emergency procurement process to erect the border fence at the Beitbridge border post.
However, an investigation found that the fence cost R40.4 million, which consisted of a R37.1m payment to the contractor and R3.25m to a professional agent. It was overpriced by R14m and may have been exceeded by R17m.
The investigation also revealed a series of procurement and other irregularities, including R21.8m upfront payment to the contractor and R1.8m to the principal agent when construction had not started. The department was found to have failed to test the market to determine the reasonable contractor and pricing.
The report had recommended that the department lay criminal charges against the contractor and principal agent and identified officials for misrepresentation to justify payments. In her written response, De Lille said the blacklisting of the two companies was brought to the department’s restriction committee and authority (RCAA) last August. Detailed evidence contained in the investigation report was also sought by the committee, she said.
“The department was compelled to delay the release of this information and to reconstitute the composition of the RCAA, recognising that the chairperson of the RCAA was one of the officials cited in the investigation report and subject to disciplinary action,” said De Lille.
“Another reason for delaying the release of the report to the RCAA was to allow the department to initiate and advance disciplinary processes before releasing the investigation report to third parties to protect the confidentiality of the information contained in the report,” she said.
De Lille also said the department approved the final charges against the officials and reconstituted the RCAA to exclude from membership of the committee any person who may have a conflict of interest on February 11. The minister added that all the relevant reports and supporting evidence were also provided to the committee to enable the committee to conclude its work early this month.
“The committee has considered and studied the relevant investigation reports and issued letters to the contractor and consultant on 26 February 2021, requesting reasons why the department should not recommend to National Treasury their restriction from doing business with the state. The RCAA has indicated that it will afford the respective service providers a period of 14 days to provide their written representations,” she said.
De Lille said the RCAA expected the process to be finalised by mid-March. She also said the department had not identified any justifiable grounds to terminate existing contracts with the two companies as they were duly awarded.
“However, the department is in the process of reviewing these contracts though its internal audit unit. The department is further seeking legal advice as to whether the conduct of the respective companies in relation to the Beitbridge contract constitutes sufficient grounds to seek termination of their remaining contracts with the department. The matter is currently under legal review,” she said.