A recent Auditor-General's report detailing massive tender corruption across South Africa's nine provinces once again illustrates just how easy it has become to manipulate government contracts. But, worse still, the report only lists tender fraud found in 247 projects worth R6.6-billion in the health and education provincial departments. In some instances, contracts were awarded without even going through the tender process while, in others, contractors delivered incomplete or shoddy work and still managed to receive substantial payments.
As Themba Godi, chairman of the standing committee on public accounts, said after receiving the AG's report last week: "So much has been spent and very little has been delivered." This is, indeed, the crux of the problem. For failure to deliver government infrastructure, particularly in the areas of health and education, goes far beyond the depletion of the public purse. It goes to the heart of service delivery. A clinic not completed in a rural area means that the poorest South Africans are denied access to basic healthcare. And a school that is never completed translates into hundreds of children being taught under trees or in mud structures.
Finance Minister Pravin Gordhan announced earlier this year a range of measures meant to curtail tender fraud. Along with publishing a blacklist of tenderers, Gordhan said Treasury approval would have to be sought for tenders in excess of R10-million. The AG's report shows just how entrenched tender corruption has become and how easy it is for both public servants and unscrupulous contractors to fleece the government. This must then raise the question - even with the purest of intentions and the greatest of will: can the tide be turned on corruption?
Source: Times Live
Showing posts with label Themba Godi. Show all posts
Showing posts with label Themba Godi. Show all posts
Monday, September 19, 2011
Wednesday, February 7, 2007
Fidentia investment 'reckless'
The labour department has been urged to investigate the investment strategies of all sectoral training authorities after the Transport Education Training Authority (Teta) told the Standing Committee on Public Accounts on Wednesday that it had made a R250m investment in Fidentia on the advice of its lawyers.
The hearing by the National Assembly Standing Committee on Public Accounts (Scopa) saw Teta chief executive officer Piet Bothma being grilled by the committee chairperson Themba Godi, a Pan Africanist Congress Member of Parliament, and African National Congress MPs Pierre-Jean Gerber and Vincent Smith. Godi said the department should investigate the matter as "someone should be responsible for this mess" - referring to the report by the Financial Services Board that the Teta was unlikely to get its investment back from Fidentia - a black empowerment firm that has been placed under curatorship. Smith described the affair as "a seriously deficient investment strategy" on the part of Teta, while Gerber described the investment as "reckless". Gerber - who led the charge by MPs in the public finance watchdog committee - asked how it was that an investment of "a quarter of a billion rand" of public money had been made only on the advice of a company of lawyers - identified as SAB&T legal services.
Bothma replied: "We went through reference checks on the company and its directors and got legal advice on the mandate requested by Fidentia. There were checks and balances built in." Smith said that Setas were supposed to be "cost centres" and not investment or profit making institutions and suggested that it would be "crazy" if all 16 Setas had so much money on average available for investment. "Something is terribly wrong," he said. Gerber asked how the investment in Fidentia came about. "The name of the firm Fidentia didn't fall out of the air like a mosquito?" he charged. Bothma said the authority had been approached by Fidentia in "a marketing exercise". "After we looked at the proposal made... we went through reference checks on the company and its directors and got legal advice on the mandate requested by Fidentia," said Bothma.
Godi noted that what had been chosen was a newly established company and it appeared that the Teta had verified its business with Fidentia either without really looking at the detail or being caught out by the advice sought from the legal company. He posed the question why when doing a risk analysis the question of the company's track record had not been an issue.
Bothma said although there now "appeared to be gaps in that situation" the bottom line was that Teta had procured "an excellent company" - SAB&T - "that was given a mandate to do certain verifications and checks and balances". He noted that SAB&T had gone through a "three-quotation" process for this job. "They also at that stage (nearly four years ago) did work for us verifying contracts that we do for discretionary grants," he said. It emerged in the committee discussion that Fidentia offered Teta 10.5% interest on their 50-day investment against 8% from Standard Bank and Absa's 8.05%. Bothma said that Teta had last year requested a withdrawal of its funds in Fidentia - following the FSB investigation.
Godi said it appeared from the Teta's actions that it swung from "one extreme to the other" - first entrusting "such a large amount of money" in Fidentia and then suddenly after the investigation wanting to withdraw "all your monies". "This does suggest that at no point did you apply your mind," said the committee chairman.
The FSB report last week noted that it was its analysis that some R689m of some R1.5bn invested with Fidentia could not be accounted for.
Source: News 24
The hearing by the National Assembly Standing Committee on Public Accounts (Scopa) saw Teta chief executive officer Piet Bothma being grilled by the committee chairperson Themba Godi, a Pan Africanist Congress Member of Parliament, and African National Congress MPs Pierre-Jean Gerber and Vincent Smith. Godi said the department should investigate the matter as "someone should be responsible for this mess" - referring to the report by the Financial Services Board that the Teta was unlikely to get its investment back from Fidentia - a black empowerment firm that has been placed under curatorship. Smith described the affair as "a seriously deficient investment strategy" on the part of Teta, while Gerber described the investment as "reckless". Gerber - who led the charge by MPs in the public finance watchdog committee - asked how it was that an investment of "a quarter of a billion rand" of public money had been made only on the advice of a company of lawyers - identified as SAB&T legal services.
Bothma replied: "We went through reference checks on the company and its directors and got legal advice on the mandate requested by Fidentia. There were checks and balances built in." Smith said that Setas were supposed to be "cost centres" and not investment or profit making institutions and suggested that it would be "crazy" if all 16 Setas had so much money on average available for investment. "Something is terribly wrong," he said. Gerber asked how the investment in Fidentia came about. "The name of the firm Fidentia didn't fall out of the air like a mosquito?" he charged. Bothma said the authority had been approached by Fidentia in "a marketing exercise". "After we looked at the proposal made... we went through reference checks on the company and its directors and got legal advice on the mandate requested by Fidentia," said Bothma.
Godi noted that what had been chosen was a newly established company and it appeared that the Teta had verified its business with Fidentia either without really looking at the detail or being caught out by the advice sought from the legal company. He posed the question why when doing a risk analysis the question of the company's track record had not been an issue.
Bothma said although there now "appeared to be gaps in that situation" the bottom line was that Teta had procured "an excellent company" - SAB&T - "that was given a mandate to do certain verifications and checks and balances". He noted that SAB&T had gone through a "three-quotation" process for this job. "They also at that stage (nearly four years ago) did work for us verifying contracts that we do for discretionary grants," he said. It emerged in the committee discussion that Fidentia offered Teta 10.5% interest on their 50-day investment against 8% from Standard Bank and Absa's 8.05%. Bothma said that Teta had last year requested a withdrawal of its funds in Fidentia - following the FSB investigation.
Godi said it appeared from the Teta's actions that it swung from "one extreme to the other" - first entrusting "such a large amount of money" in Fidentia and then suddenly after the investigation wanting to withdraw "all your monies". "This does suggest that at no point did you apply your mind," said the committee chairman.
The FSB report last week noted that it was its analysis that some R689m of some R1.5bn invested with Fidentia could not be accounted for.
Source: News 24
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