The Democratic Alliance (DA) has laid charges of financial misconduct against former head of the Gauteng Roads and Transport Department (GRTD) Sibusiso Buthelezi, in relation to a contract awarded to GNS Risk Advisory Services.
The company is linked to former communications minister Siphiwe Nyanda.
DA corruption spokesperson Jack Bloom alleges gross negligence on the part of Buthelezi in awarding the contract to a company that was 45%-owned by Nyanda. Bloom subsequently laid a charge at the Commercial Crimes Unit, in Johannesburg, since, he says, the Gauteng premier has not done so.
Public protector Thuli Madonsela investigated the allegations of irregularities with regards to the tender and her findings confirmed the allegations. This was the second of three complaints of conflict of interest against Nyanda.
Madonsela is currently carrying out the third investigation against Nyanda. In this investigation, she is looking into all state tenders awarded to companies linked to the former communications minister, as requested by the DA earlier this year.
Gross overpayment
Bloom says an official reply by transport MEC Bheki Nkosi to a parliamentary question noted that the irregularity in the award of the tender by the department in 2007 relates to the fact that no procurement procedures, other than the deviation route, were followed in terms of advertisements, evaluation and approval of service provider.
“It is now clear from information that I received that this contract was a huge rip-off as companies that replaced GNS (now renamed Abalozi Security) are doing the same job at a vastly reduced cost - about R24 million less per year. This would not have happened if the contract went out to competitive tender.”
He says the extent to which replacement companies were cheaper was revealed in another official reply in the Gauteng Legislature by Nkosi.
“For instance, instead of paying R848 160 per month to Abalozi to guard g-Fleet [the Gauteng government's business provider of leasing and fleet management services] at Bedfordview, Pothlako Security and Cleaning Services is doing the job for R184 643 a month. A further R747 840 a month to Abalozi for 'g-Fleet risk assessment, fraud prevention and forensic investigation' has now been dispensed with altogether.
“All in all, it is reasonable to estimate that about R2 million a month has been saved by cancelling the Abalozi contract,” said Bloom in his affidavit.
He cites other steep reductions within the department, including R49 773 per month to Freedom Fighters Security Services, versus R410 000 to Abalozi to guard the Urban Transport Fund Command Centre; and R37 394 per month to Pholile Business Solutions versus R260 000 to guard g-Fleet, at Koedoespoort.
“This whole matter stinks, especially in view of the fact that Abalozi/GNS was part-owned by politically connected former communications minister Siphiwe Nyanda when it got the tender, and his family continued to benefit from this company after he transferred his share into a family trust.”
Political risk
“Buthelezi is charged under Section 81 of the Public Finance Management Act (PFMA) that says an accounting officer of a department commits financial misconduct if he wilfully or negligently "makes or permits an irregular expenditure or a fruitless and wasteful expenditure”.
He faces a possible criminal conviction, in terms of Section 86 of the PFMA, if his non-compliance is found to be wilful or grossly negligent, according to Bloom. This offence can lead to a fine or imprisonment, not exceeding five years.
The DA spokesperson adds that, if Buthelezi is convicted, he could then be liable to pay back the wasted money.
“It is an utter disgrace that Gauteng premier Nomvula Mokonyane has ruled out any action against Buthelezi in this matter.”
Bloom says he has laid the charge as there must be accountability for the huge waste of public money by the award of this security contract without tender.
“It is no use having a wonderful piece of legislation like the PFMA if it is not enforced at all times.”
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